Reviewer in Labor Law

(Patterned in the Course Outline of Atty. Charisma I. Nolasco)

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LABOR STANDARDS
Section 10. The State shall promote social justice in all phases of national
I. GENERAL CONCEPTS development.

A. Definition Section 13. The State recognizes the vital role of the youth in nation-building and
shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It
a. Labor, in ordinary signification, is understood as physical toil although it shall inculcate in the youth patriotism and nationalism, and encourage their involvement in
does not necessarily exclude the application of skill, thus, there is skilled and unskilled labor. public and civic affairs.

b. Labor Law consists of statutes, regulations and jurisprudence governing Section 14. The State recognizes the role of women in nation-building, and shall
the relations between capital and labor, by providing for certain employment standards and a ensure the fundamental equality before the law of women and men.
legal framework for negotiating, adjusting and administering those standards and other
incidents of employment. Section 18. The State affirms labor as a primary social economic force. It shall
protect the rights of workers and promote their welfare.
c. Labor Standards vs. Labor Relations
Section 20. The State recognizes the indispensable role of the private sector,
As to Definition. Labor Standards law is defined as that which sets out encourages private enterprise, and provides incentives to needed investments.
the least or basic terms, conditions and benefits of employment that employers must provide or
comply with and to which employees are entitled as a matter of right. On the other hand, Article 3
Labor Relations law is defined as that which defines the status, rights and duties, and the
institutional mechanisms that govern the individual and collective interactions of employers, Section 1. No person shall be deprived of life, liberty, or property without due
employees, or their representatives. process of law, nor shall any person be denied the equal protection of the laws.

As to Subject Matter. Labor standards is the material or the substance to Section 4. No law shall be passed abridging the freedom of speech, of expression,
be processed while labor relations is the mechanism that processes the substance. or of the press, or the right of the people peaceably to assemble and petition the government
for redress of grievances.
d. Social Legislation is defined as those laws that provide particular kinds
of protection or benefits to society or segments thereof in furtherance of social justice. In that Section 8. The right of the people, including those employed in the public and private
sense, labor laws are necessarily social legislation. sectors, to form unions, associations, or societies for purposes not contrary to law shall not be
abridged.
B. Sources
Article 13
a. 1987 Constitution
Section 1. The Congress shall give highest priority to the enactment of measures that
Article 2 protect and enhance the right of all the people to human dignity, reduce social, economic, and
political inequalities, and remove cultural inequities by equitably diffusing wealth and political
Section 5. The maintenance of peace and order, the protection of life, liberty, and power for the common good.
property, and promotion of the general welfare are essential for the enjoyment by all the people
of the blessings of democracy. To this end, the State shall regulate the acquisition, ownership, use, and disposition of
property and its increments.
Section 9. The State shall promote a just and dynamic social order that will ensure
the prosperity and independence of the nation and free the people from poverty through Section 2. The promotion of social justice shall include the commitment to create
policies that provide adequate social services, promote full employment, a rising standard of economic opportunities based on freedom of initiative and self-reliance.
living, and an improved quality of life for all.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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Section 3 (memorize). The State shall afford full protection to labor, local and coincidence for the company that the work stoppage held by the employees lasted for thirty-
overseas, organized and unorganized, and promote full employment and equality of one (31) days or exactly one month. This enabled them to devise a formula using 11/12 of the
employment opportunities for all. total annual salary as base amount for computation instead of the entire amount for a 12-
month period.
It shall guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in accordance That a full month payment of the 13th month pay is the established practice at Honda
with law. They shall be entitled to security of tenure, humane conditions of work, and a living is further bolstered by the affidavits executed by Feliteo Bautista and Edgardo Cruzada. Both
wage. They shall also participate in policy and decision-making processes affecting their rights attested that when they were absent from work due to motorcycle accidents, and after they
and benefits as may be provided by law. have exhausted all their leave credits and were no longer receiving their monthly salary from
Honda, they still received the full amount of their 13 th month, 14th month and financial
The State shall promote the principle of shared responsibility between workers and assistance pay.
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The case of Davao Fruits Corporation v. Associated Labor Unions, et al. presented an
example of a voluntary act of the employer that has ripened into a company practice. In that
The State shall regulate the relations between workers and employers, recognizing case, the employer, from 1975 to 1981, freely and continuously included in the computation of
the right of labor to its just share in the fruits of production and the right of enterprises to the 13th month pay those items that were expressly excluded by the law. We have held that this
reasonable returns to investments, and to expansion and growth. act, which was favorable to the employees though not conforming to law, has ripened into a
practice and therefore can no longer be withdrawn, reduced, diminished, discontinued or
Section 14. The State shall protect working women by providing safe and healthful eliminated. Furthermore, in Sevilla Trading Company v. Semana, we stated:
working conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full potential in the With regard to the length of time the company practice should have been exercised to
service of the nation. constitute voluntary employer practice which cannot be unilaterally withdrawn by the employer,
we hold that jurisprudence has not laid down any rule requiring a specific minimum number of
b. Statutes and jurisprudence years. In the above quoted case of Davao Fruits Corporation vs. Associated Labor Unions, the
company practice lasted for six (6) years. In another case, Davao Integrated Port Stevedoring
c. Company practice Services vs. Abarquez, the employer, for three (3) years and nine (9) months, approved the
commutation to cash of the unenjoyed portion of the sick leave with pay benefits of its
Honda Philippines, Inc. vs. Samahan ng Malalaya sa Honda, G.R. No. 145561, June 15, intermittent workers. While in Tiangco vs. Leogardo, Jr. the employer carried on the practice of
2005, Ynarez-Santiago, J. giving a fixed monthly emergency allowance from November 1976 to February 1980, or three
(3) years and four (4) months. In all these cases, this Court held that the grant of these
Doctrine. More importantly, it has not been refuted that Honda has not implemented benefits has ripened into company practice or policy which cannot be peremptorily
any pro-rating of the 13th month pay before the instant case. Honda did not adduce evidence to withdrawn. In the case at bar, petitioner Sevilla Trading kept the practice of including non-
show that the 13th month, 14th month and financial assistance benefits were previously subject basic benefits such as paid leaves for unused sick leave and vacation leave in the computation
to deductions or pro-rating or that these were dependent upon the company’s financial of their 13th-month pay for at least two (2) years. This, we rule likewise constitutes
standing. As held by the Voluntary Arbitrator: voluntary employer practice which cannot be unilaterally withdrawn by the employer
without violating Art. 100 of the Labor Code.
The Company (Honda) explicitly accepted that it was the strike held that prompted
them to adopt a pro-rata computation, aside from being in a state of rehabilitation due to 227M Vergara, Jr. vs. Coca-Cola Bottlers, Phils., Inc., G.R. No. 176985, April 1, 2013, Peralta, J.
substantial losses in 1997, 114M in 1998 and 215M lost of sales in 1999 due to strike. This is
an implicit acceptance that prior to the strike, a full month basic pay computation was the Doctrine. There is diminution of benefits when the following requisites are present:
"present practice" intended to be maintained in the CBA. (1) the grant or benefit is founded on a policy or has ripened into a practice over a long period
of time; (2) the practice is consistent and deliberate; (3) the practice is not due to error in the
The memorandum dated November 22, 1999 which Honda issued shows that it was construction or application of a doubtful or difficult question of law; and (4) the diminution or
the first time a pro-rating scheme was to be implemented in the company. It was a convenient discontinuance is done unilaterally by the employer.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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representations stands and holds true to Us, considering that petitioner did not present any
To be considered as a regular company practice, the employee must prove by iota of proof to debunk the same.
substantial evidence that the giving of the benefit is done over a long period of time, and that it
has been made consistently and deliberately. Jurisprudence has not laid down any hard-and- Therefore, respondent's isolated act of including the SMI in the retirement package of
fast rule as to the length of time that company practice should have been exercised in order to Velazquez could hardly be classified as a company practice that may be considered an
constitute voluntary employer practice. The common denominator in previously decided cases enforceable obligation. To repeat, the principle against diminution of benefits is applicable only
appears to be the regularity and deliberateness of the grant of benefits over a significant period if the grant or benefit is founded on an express policy or has ripened into a practice over a long
of time. It requires an indubitable showing that the employer agreed to continue giving the period of time which is consistent and deliberate; it presupposes that a company practice,
benefit knowing fully well that the employees are not covered by any provision of the law or policy and tradition favorable to the employees has been clearly established; and that the
agreement requiring payment thereof. In sum, the benefit must be characterized by regularity, payments made by the company pursuant to it have ripened into benefits enjoyed by
voluntary and deliberate intent of the employer to grant the benefit over a considerable period them.26 Certainly, a practice or custom is, as a general rule, not a source of a legally
of time. demandable or enforceable right. Company practice, just like any other fact, habits, customs,
usage or patterns of conduct, must be proven by the offering party who must allege and
Upon review of the entire case records, We find no substantial evidence to prove that establish specific, repetitive conduct that might constitute evidence of habit or company
the grant of SMI to all retired DSSs regardless of whether or not they qualify to the same had practice
ripened into company practice. Despite more than sufficient opportunity given him while his
case was pending before the NLRC, the CA, and even to this Court, petitioner utterly failed to
adduce proof to establish his allegation that SMI has been consistently, deliberately and d. Contracts
voluntarily granted to all retired DSSs without any qualification or conditions whatsoever. The
only two pieces of evidence that he stubbornly presented throughout the entirety of this case C. Social Justice
are the sworn statements of Renato C. Hidalgo (Hidalgo) and Ramon V. Velazquez
(Velasquez), former DSSs of respondent who retired in 2000 and 1998, respectively. They a. Definition
claimed that the SMI was included in their retirement package even if they did not meet the
sales and collection qualifiers. However, juxtaposing these with the evidence presented by Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but
respondent would reveal the frailty of their statements. the humanization of laws and the equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception may at least be approximated.
The declarations of Hidalgo and Velazquez were sufficiently countered by respondent Social justice means the promotion of the welfare of all the people, the adoption by the
through the affidavits executed by Norman R. Biola (Biola), Moises D. Escasura (Escasura), Government of measures calculated to insure economic stability of all the competent elements
and Ma. Vanessa R. Balles (Balles). Biola pointed out the various stop-gap measures of society, through the maintenance of a proper economic and social equilibrium in the
undertaken by respondent beginning 1999 in order to arrest the deterioration of its accounts interrelations of the members of the community, constitutionally, through the adoption of
receivables balance, two of which relate to the policies on the grant of SMI and to the change measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying
in the management structure of respondent upon its re-acquisition by San Miguel Corporation. the existence of all governments on the time-honored principle of salus populi est suprema lex.
Escasura represented that he has personal knowledge of the circumstances behind the (Calalang vs. Williams, G.R. No. 47800, December 2, 1940, Laurel, J.)
retirement of Hidalgo and Velazquez. He attested that contrary to petitioner’s claim, Hidalgo
was in fact qualified for the SMI. As for Velazquez, Escasura asserted that even if he b. Application
(Velazquez) did not qualify for the SMI, respondent’s General Manager in its Calamba plant
still granted his (Velazquez) request, along with other numerous concessions, to achieve Philippine Long Distance Telephone Company vs. NLRC, G.R. No. L-80609, August 23,
industrial peace in the plant which was then experiencing labor relations problems. Lastly, 1998, Cruz, J.
Balles confirmed that petitioner failed to meet the trade receivable qualifiers of the SMI. She
also cited the cases of Ed Valencia (Valencia) and Emmanuel Gutierrez (Gutierrez), both DSSs FACTS: Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone
of respondent who retired on January 31, 2002 and December 30, 2002, respectively. She Company, was accused by two complainants of having demanded and received from them the
noted that, unlike Valencia, Gutierrez also did not receive the SMI as part of his retirement pay, total amount of P3,800.00 in consideration of her promise to facilitate approval of their
since he failed to qualify under the policy guidelines. The verity of all these statements and applications for telephone installation. She was dismissed but given separation pay on the
ground of social justice.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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ISSUE: Whether or not the grant of separation pay is justified. ISSUE: Are illegally striking employees entitled to separation pay on the ground of social
justice?
HELD: No. We hold that henceforth separation pay shall be allowed as a measure of social
justice only in those instances where the employee is validly dismissed for causes other than
HELD: No. Considering that the dismissal of the employees was due to their participation in
serious misconduct or those reflecting on his moral character. Where the reason for the valid
the illegal strikes as well as violation of the Code of Conduct of the company, the same
dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft
constitutes serious misconduct. A serious misconduct is a transgression of some established
or illicit sexual relations with a fellow worker, the employer may not be required to give the
and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies
dismissed employee separation pay, or financial assistance, or whatever other name it is
wrongful intent and not mere error in judgment. In fact, in Panay Electric Company, Inc. v.
called, on the ground of social justice.
NLRC, the Supreme Court nullified the grant of separation benefits to employees who
unlawfully participated in an illegal strike in light of Article 264, Title VIII, Book V of the Labor
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding
Code, that, "any union officer who knowingly participates in an illegal strike and any worker or
rather than punishing the erring employee for his offense. And we do not agree that the
union officer who knowingly participates in the commission of illegal acts during a strike may
punishment is his dismissal only and that the separation pay has nothing to do with the wrong
be declared to have lost his employment status."
he has committed. Of course it has. Indeed, if the employee who steals from the company is
granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a
similar offense in his next employment because he thinks he can expect a like leniency if he is
The constitutional guarantee on social justice is not intended only for the poor but for
again found out. This kind of misplaced compassion is not going to do labor in general any
the rich as well. It is a policy of fairness to both labor and management.
good as it will encourage the infiltration of its ranks by those who do not deserve the protection
and concern of the Constitution.
The CA’s grant of separation pay is an erroneous departure from our ruling in Phil.
The policy of social justice is not intended to countenance wrongdoing simply Long Distance Telephone Co. v. NLRC that serious misconduct forecloses the award of
because it is committed by the underprivileged. At best it may mitigate the penalty but it separation pay. Secondly, the advertence to the alleged honest belief on the part of the 227
certainly will not condone the offense. Compassion for the poor is an imperative of every employees that Toyota committed a breach of the duty to bargain collectively and an abuse of
humane society but only when the recipient is not a rascal claiming an undeserved privilege. valid exercise of management prerogative has not been substantiated by the evidence extant
Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an on record. There can be no good faith in intentionally incurring absences in a collective fashion
impediment to the punishment of the guilty. Those who invoke social justice may do so only if from work on February 22 and 23, 2001 just to attend the DOLE hearings. The Union’s
their hands are clean and their motives blameless and not simply because they happen to be strategy was plainly to cripple the operations and bring Toyota to its knees by inflicting
poor. This great policy of our Constitution is not meant for the protection of those who have substantial financial damage to the latter to compel union recognition. The Union officials and
proved they are not worthy of it, like the workers who have tainted the cause of labor with the members are supposed to know through common sense that huge losses would befall the
blemishes of their own character. company by the abandonment of their regular work. It was not disputed that Toyota lost more
than PhP 50 million because of the willful desertion of company operations in February 2001
Applying the above considerations, we hold that the grant of separation pay in the by the dismissed union members. In addition, further damage was experienced by Toyota
case at bar is unjustified. The private respondent has been dismissed for dishonesty, as found when the Union again resorted to illegal strikes from March 28 to April 12, 2001, when the
by the labor arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The gates of Toyota were blocked and barricaded, and the company officials, employees, and
fact that she has worked with the PLDT for more than a decade, if it is to be considered at all, customers were intimidated and harassed. Moreover, they were fully aware of the company
should be taken against her as it reflects a regrettable lack of loyalty that she should have rule on prohibition against concerted action inimical to the interests of the company and hence,
strengthened instead of betraying during all of her 10 years of service with the company. If their resort to mass actions on several occasions in clear violation of the company regulation
regarded as a justification for moderating the penalty of dismissal, it will actually become a cannot be excused nor justified. Lastly, they blatantly violated the assumption/certification
prize for disloyalty, perverting the meaning of social justice and undermining the efforts of labor Order of the DOLE Secretary, exhibiting their lack of obeisance to the rule of law. These acts
to cleanse its ranks of all undesirables. indeed constituted serious misconduct.
Toyota Motors Philippines Corp. Workers Association vs. NLRC, G.R. No. 158798-99,
October 19, 2007, Velasco, Jr., J.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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A painstaking review of case law renders obtuse the Union’s claim for separation pay. living, and the chance to better one’s lot in life. It is clear then that they both have the same
In a slew of cases, this Court refrained from awarding separation pay or financial assistance to goal, even if the benefit that results may be greater for one party than the other. If this
union officers and members who were separated from service due to their participation in or becomes a source of conflict, there are various, more amicable means of settling disputes and
commission of illegal acts during strikes. In the recent case of Pilipino Telephone Corporation of balancing interests that do not add fuel to the fire, and instead open avenues for
v. Pilipino Telephone Employees Association (PILTEA), this Court upheld the dismissal of understanding and cooperation between the employer and the employee. Even though strikes
union officers who participated and openly defied the return-to-work order issued by the DOLE and lockouts have been recognized as effective bargaining tools, it is an antiquated notion that
Secretary. No separation pay or financial assistance was granted. In Sukhothai Cuisine and they are truly beneficial, as they only provide short-term solutions by forcing concessions from
Restaurant v. Court of Appeals, this Court declared that the union officers who participated in one party; but staging such strikes would damage the working relationship between employers
and the union members who committed illegal acts during the illegal strike have lost their and employees, thus endangering the business that they both want to succeed. The more
employment status. In this case, the strike was held illegal because it violated agreements progressive and truly effective means of dispute resolution lies in mediation, conciliation, and
providing for arbitration. Again, there was no award of separation pay nor financial assistance. arbitration, which do not increase tension but instead provide relief from them. In the end, an
In Philippine Diamond Hotel and Resort, Inc. v. Manila Diamond Hotel Employees Union, the atmosphere of trust and understanding has much more to offer a business relationship than
strike was declared illegal because the means employed was illegal. We upheld the validity of the traditional enmity that has long divided the employer and the employee
dismissing union members who committed illegal acts during the strike, but again, without
awarding separation pay or financial assistance to the erring employees. In Samahang Solidbank vs. NLRC, G.R. No. 165951, March 30, 2010, Peralta, J.
Manggagawa sa Sulpicio Lines, Inc. v. Sulpicio Lines, this Court upheld the dismissal of union
officers who participated in an illegal strike sans any award of separation pay. Earlier, in Grand ISSUE: Is the grant of separation pay on the ground of social justice due to dismissal under
Boulevard Hotel v. Genuine Labor Organization of Workers in Hotel, Restaurant and Allied authorized cause justified?
Industries, we affirmed the dismissal of the Union’s officers who participated in an illegal strike
without awarding separation pay, despite the NLRC’s declaration urging the company to give HELD: No. Moreover, a review of jurisprudence relating to the application of "compassionate
financial assistance to the dismissed employees. In Interphil Laboratories Union-FFW, et al. v. and social justice" in granting financial assistance in labor cases shows that the same has
Interphil Laboratories, Inc., this Court affirmed the dismissal of the union officers who led the been generally used in instances when an employee has been dismissed for a just cause
concerted action in refusing to render overtime work and causing "work slowdowns." However, under Article 282 of the Labor Code and not when an employee has been dismissed for an
no separation pay or financial assistance was allowed. In CCBPI Postmix Workers Union v. authorized cause under Article 283.
NLRC, this Court affirmed the dismissal of union officers who participated in the strike and the
union members who committed illegal acts while on strike, without awarding them separation After a thorough consideration of the circumstances at bar, this Court finds that the
pay or financial assistance. In 1996, in Allied Banking Corporation v. NLRC, this Court affirmed award of financial assistance is bereft of legal basis and serves to penalize petitioner who has
the dismissal of Union officers and members, who staged a strike despite the DOLE complied with the requirements of the law.
Secretary’s issuance of a return to work order but did not award separation pay. In the earlier
but more relevant case of Chua v. NLRC, this Court deleted the NLRC’s award of separation It behooves this Court as to why the CA affirmed the grant of financial assistance
benefits to an employee who participated in an unlawful and violent strike, which strike resulted notwithstanding its pronouncement that it would be inequitable to allow respondents to receive
in multiple deaths and extensive property damage. In Chua, we viewed the infractions benefits than those prescribed by law and jurisprudence, to wit:
committed by the union officers and members as a serious misconduct which resulted in the
deletion of the award of separation pay in conformance to the ruling in PLDT. Based on In the instant case, both the Labor Arbiter and the NLRC upheld the validity of the
existing jurisprudence, the award of separation pay to the Union officials and members in the dismissal of the employees and of the quitclaim agreements between the affected employees
instant petitions cannot be sustained. and employer Solidbank. However, it was a strange occurrence when the NLRC granted an
additional award of separation pay in an amount equivalent to two months salary to each
employee. This means that Solidbank now has the obligation to pay the employees not only
One last point to consider—it is high time that employer and employee cease to view
their wages, benefits and other privileges under the law, and separation pay in an amount
each other as adversaries and instead recognize that theirs is a symbiotic relationship, wherein
equivalent to 150% of their one month’s pay, but also financial assistance equivalent to two
they must rely on each other to ensure the success of the business. When they consider only
months pay to each employee. Such a situation cannot be upheld by this Court. As discussed
their own self-interests, and when they act only with their own benefit in mind, both parties
above, all that the law requires in cases of dismissal due to an authorized cause is that the
suffer from short-sightedness, failing to realize that they both have a stake in the business. The
employer must pay financial assistance or separation pay in an amount equivalent to "one
employer wants the business to succeed, considering the investment that has been made. The
month’s pay or one-half month’s for every year of service, whichever is higher." Solidbank has
employee in turn, also wants the business to succeed, as continued employment means a
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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complied with the mandate of the law. Hence, it would be unjust and inequitable to allow the unfavorable decision. It is mirage of a stop-gap leading the employee to a risky cliff of
employees to receive higher benefits than those prescribed by the Labor Code and insolvency.
jurisprudence.
Advisably, the sum is better left unspent. It becomes more logical and practical for the
Villaruel vs. Yeo Han Guan, G.R. No. 169191, June 1, 2011, Peralta, J. employee to refuse payroll reinstatement and simply find work elsewhere in the interim, if any
is available. Notably, the option of payroll reinstatement belongs to the employer, even if the
ISSUE: Is an employee who has resigned from service entitled to separation pay on the employee is able and raring to return to work. Prior to Genuino, it is unthinkable for one to
ground of social justice? refuse payroll reinstatement. In the face of the grim possibilities, the rise of concerned
employees declining payroll reinstatement is on the horizon.
HELD: Yes. Since petitioner was not terminated from his employment and, instead, is
deemed to have resigned therefrom, he is not entitled to separation pay under the provisions Further, the Genuino ruling not only disregards the social justice principles behind the
of the Labor Code. rule, but also institutes a scheme unduly favorable to management. Under such scheme, the
salaries dispensed pendente lite merely serve as a bond posted in installment by the employer.
The foregoing notwithstanding, this Court, in a number of cases, has granted financial For in the event of a reversal of the Labor Arbiter’s decision ordering reinstatement, the
assistance to separated employees as a measure of social and compassionate justice and as employer gets back the same amount without having to spend ordinarily for bond premiums.
an equitable concession. Taking into consideration the factual circumstances obtaining in the This circumvents, if not directly contradicts, the proscription that the "posting of a bond [even a
present case, the Court finds that petitioner is entitled to this kind of assistance. cash bond] by the employer shall not stay the execution for reinstatement."

While the abovecited cases authorized the grant of financial assistance in lieu of In playing down the stray posture in Genuino requiring the dismissed employee on
retirement benefits, the Court finds no cogent reason not to employ the same guiding principle payroll reinstatement to refund the salaries in case a final decision upholds the validity of the
of compassionate justice applied by the Court, taking into consideration the factual dismissal, the Court realigns the proper course of the prevailing doctrine on reinstatement
circumstances obtaining in the present case. In this regard, the Court finds credence in pending appeal vis-à-vis the effect of a reversal on appeal.
petitioner's contention that he is in the employ of respondent for more than 35 years. In the
absence of a substantial refutation on the part of respondent, the Court agrees with the Respondent insists that with the reversal of the Labor Arbiter’s Decision, there is no
findings of the Labor Arbiter and the NLRC that respondent company is not distinct from its more basis to enforce the reinstatement aspect of the said decision. In his Separate Opinion,
predecessors but, in fact, merely continued the operation of the latter under the same owners Justice Presbitero Velasco, Jr. supports this argument and finds the prevailing doctrine in Air
and the same business venture. The Court further notes that there is no evidence on record to Philippines and allied cases inapplicable because, unlike the present case, the writ of
show that petitioner has any derogatory record during his long years of service with execution therein was secured prior to the reversal of the Labor Arbiter’s decision.
respondent and that his employment was severed not by reason of any infraction on his part
but because of his failing physical condition. Add to this the willingness of respondent to give The proposition is tenuous. First, the matter is treated as a mere race against time.
him financial assistance. Hence, based on the foregoing, the Court finds that the award The discussion stopped there without considering the cause of the delay. Second, it requires
of P50,000.00 to petitioner as financial assistance is deemed equitable under the the issuance of a writ of execution despite the immediately executory nature of the
circumstances. reinstatement aspect of the decision. In Pioneer Texturing Corp. v. NLRC, which was cited
in Panuncillo v. CAP Philippines, Inc., the Court observed:
Garcia vs. PAL, G.R. No. 164856, January 20, 2009, Carpio-Morales, J.
x x x The provision of Article 223 is clear that an award [by the Labor Arbiter] for
ISSUE: Whether or not the refund doctrine is in accordance with social justice. reinstatement shall be immediately executory even pending appeal and the posting of a bond
by the employer shall not stay the execution for reinstatement. The legislative intent is quite
HELD: No. Even outside the theoretical trappings of the discussion and into the mundane obvious, i.e., to make an award of reinstatement immediately enforceable, even pending
realities of human experience, the "refund doctrine" easily demonstrates how a favorable appeal. To require the application for and issuance of a writ of execution as prerequisites for
decision by the Labor Arbiter could harm, more than help, a dismissed employee. The the execution of a reinstatement award would certainly betray and run counter to the very
employee, to make both ends meet, would necessarily have to use up the salaries received object and intent of Article 223, i.e., the immediate execution of a reinstatement order. The
during the pendency of the appeal, only to end up having to refund the sum in case of a final reason is simple. An application for a writ of execution and its issuance could be delayed for
numerous reasons. A mere continuance or postponement of a scheduled hearing, for instance,
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
Page 7
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or an inaction on the part of the Labor Arbiter or the NLRC could easily delay the issuance of Control. The VP-Comptroller for the period 1981 to 1983 and the VP-Internal Audit for
the writ thereby setting at naught the strict mandate and noble purpose envisioned by Article the period 1984 to 1987 was Romeo Ines.
223. In other words, if the requirements of Article 224 [including the issuance of a writ of
execution] were to govern, as we so declared in Maranaw, then the executory nature of a c) The accounting procedures and controls inherited by private respondent when she
reinstatement order or award contemplated by Article 223 will be unduly circumscribed and took over ASAD were subjected to the scrutiny of prestigious accounting firms like
rendered ineffectual. In enacting the law, the legislature is presumed to have ordained a valid Cressop, McCormick & Paget in 1985, the Sycip, Gorres, Velayo & Co., Inc. in 1986,
and sensible law, one which operates no further than may be necessary to achieve its specific including a special team from the Commission on Audit in 1987 – all of which made
purpose. Statutes, as a rule, are to be construed in the light of the purpose to be achieved and no adverse findings concerning ASAD.
the evil sought to be remedied. x x x In introducing a new rule on the reinstatement aspect of a
labor decision under Republic Act No. 6715, Congress should not be considered to be d) No less than the VP-Internal Audit made a regular audit in Australia in November
indulging in mere semantic exercise. x x x 1986 and in the early part of 1987, by borrowing all production reports covering April
to September 1986, but found no irregularities nor made any adverse feedback
The Court reaffirms the prevailing principle that even if the order of reinstatement of against ASAD.
the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate
and pay the wages of the dismissed employee during the period of appeal until reversal by the e) Private respondent was the first to discover the overpayment of commission claims
higher court. It settles the view that the Labor Arbiter's order of reinstatement to Goldair in 1984 in rate differences in net/net settlement which, after her
is immediately executory and the employer has to either re-admit them to work under the same intervention, did not recur. She was also the one who first discovered the fraud in
terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and double and fictitious commission claims and promptly took action when she withheld
that failing to exercise the options in the alternative, employer must pay the employee’s all provisional payments due Goldair.
salaries.
f) Even after the Goldair anomaly was discovered, private respondent could have
Philippine Airlines, Inc. vs. NLRC, G.R. No. 123294, October 20, 2010, Leonardo-De availed of PAL’s Special Retirement and Separation Program, but she stayed put and
Castro, J. had gone twice to Australia, while under preventive suspension, to attend court
proceedings as a witness for petitioner enabling the said company to recover and
Doctrine. In the case at bar, the transgressions imputed to private respondent have minimize its economic loss.
never been firmly established as deliberate and willful acts clearly directed at making petitioner
lose millions of pesos. At the very most, they can only be characterized as unintentional, albeit g) Private respondent has no derogatory record during the entire period of her
major, lapses in professional judgment. Likewise, the same cannot be described as morally employment with petitioner for more than two decades. She steadily rose from the
reprehensible actions. Thus, private respondent may be granted separation pay on the ground ranks until she became the ASAD Manager.
of equity which this Court had defined as "justice outside law, being ethical rather than jural
and belonging to the sphere of morals than of law. It is grounded on the precepts of h) In the dissenting opinion of Ricardo Paloma, Vice Chairman of the Espino
conscience and not on any sanction of positive law, for equity finds no room for application Committee and PAL Senior VP Strategic Planning and Corporate Service, to the Final
where there is law." Draft Majority Report, he observed that "a mitigating factor in [private respondent’s]
favor is that UNSEEN HANDS designed or allowed this new procedures to be put in
A perusal of the assailed September 29, 1995 NLRC Decision would show that the place. Ines, who became the VP Internal Audit should have known the prescribed
following equitable considerations were relied upon by the NLRC to arrive at its assailed ruling, procedures (or at the very least the actual practice during the period 1981 to 1983
to wit: when he was the VP Comptroller) and yet, did not alert her. Unknowingly, [private
respondent] allowed the by-pass and the automatic payment of 80% upon
a) The Goldair fraud was found to have started in 1981. Private respondent became presentation of production reports because Sioson assured her that was the
the Manager-ASAD only on September 1, 1984. The former Manager-ASAD from procedure previously followed. Trusting, she became a participant in this mess."
1981 to August 1984 was Josefina Sioson.
Considering the foregoing uncontroverted special circumstances, we rule that the
b) ASAD is under the direct supervision and control of the Vice President-Comptroller NLRC did not commit grave abuse of discretion amounting to lack of jurisdiction in ordering
and within the scope of the audit program of the Vice President-Internal Audit and petitioner to pay private respondent separation pay for equitable considerations.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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respect to the means and methods by which the work is to be accomplished. (Royale Homes
However, we do not agree with the NLRC that private respondent’s separation pay Marketing Corp. vs. Alcantara, G.R. No. 195190, July 28, 2014, Del Castillo, J.)
should be awarded in accordance with PAL’s "Special Retirement & Separation Program"
dated February 15, 1988 plus ten percent (10%) of the total amount by way of attorney’s fees. South East International Rattan vs. Coming, G.R. No. 186621, March 12, 2014, Villarama,
Jr., J.
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 FACTS: South East International Rattan, Inc. (SEIRI) is a domestic corporation engaged in
employment for a just cause. Thus, any retirement pay provided by PAL’s "Special Retirement the business of manufacturing and exporting furniture to various countries. Jesus J. Coming
& Separation Program" dated February 15, 1988 or, in the absence or legal inadequacy was hired as Sizing Machine Operator of SEIRI.
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 ISSUE: Whether or not Coming is an employee of SEIRI.
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 HELD: Yes. In Tan vs. Lagrama, the Court held that the fact that a worker was not reported
any entitlement to mandatory or optional retirement pay that she might have previously as an employee to the SSS is not conclusive proof of the absence of employer-employee
possessed. relationship. Otherwise, an employer would be rewarded for his failure or even neglect to
perform his obligation.
Likewise, attorney’s fees are not proper in this case because the same can only be
awarded when the employee is illegally dismissed in bad faith and is compelled to litigate or Nor does the fact that respondent’s name does not appear in the payrolls and pay
incur expenses to protect his rights by reason of the unjustified act of his employer. The envelope records submitted by petitioners negate the existence of employer-employee
aforementioned conditions do not obtain in this case. relationship. For a payroll to be utilized to disprove the employment of a person, it must contain
a true and complete list of the employee. In this case, the exhibits offered by petitioners before
As to the matter of the proper amount of separation pay to be awarded to private the NLRC consisting of copies of payrolls and pay earnings records are only for the years 1999
respondent on the basis of equitable considerations, our pronouncement in Yrasuegui v. and 2000; they do not cover the entire 18-year period during which respondent supposedly
Philippine Airlines, Inc. is instructive, to wit: worked for SEIRI.

Here, We grant petitioner separation pay equivalent to one-half (1/2) month’s pay for In their comment to the petition filed by respondent in the CA, petitioners emphasized
every year of service. It should include regular allowances which he might have been that in the certifications issued by Mayol and Apondar, it was shown that respondent was
receiving. We are not blind to the fact that he was not dismissed for any serious misconduct or employed and working for them in those years he claimed to be working for SEIRI. However, a
to any act which would reflect on his moral character. We also recognize that his employment reading of the certification by Mayol would show that while the latter claims to have respondent
with PAL lasted for more or less a decade. under his employ in 1997, 1998 and 1999, respondent’s services were not regular and that he
works only if he wants to. Apondar’s certification likewise stated that respondent worked for
Private respondent’s circumstances are more or less identical to the above-cited case him since 1999 through his brother Vicente as "sideline" but only after regular working hours
in the sense that, as previously discussed, her dismissal was neither for serious misconduct and "off and on" basis. Even assuming the truth of the foregoing statements, these do not
nor for an offense involving moral turpitude. Furthermore, her employment with petitioner foreclose respondent’s regular or full-time employment with SEIRI. In effect, petitioners
spanned more than two decades unblemished with any derogatory record prior to the suggest that respondent was employed by SEIRI’s suppliers, Mayol and Apondar but no
infractions at issue in the case at bar. competent proof was presented as to the latter’s status as independent contractors.

D. Employer-employee relationship In the same comment, petitioners further admitted that the five affiants who attested
to respondent’s employment with SEIRI are its former workers whom they describe as
a. Four-fold test applied "disgruntled workers of SEIRI" with an axe to grind against petitioners, and that their execution
of affidavit in support of respondent’s claim is "their very way of hitting back the management
> Four fold-test: (1) the selection and engagement of the employee; (2) the payment of of SEIRI after disciplinary measures were meted against them." This allegation though was not
wages; (3) the power of dismissal; and (4) the employer’s power to control the employee with substantiated by petitioners. Instead, after the CA rendered its decision reversing the NLRC’s
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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ruling, petitioners subsequently changed their theory by denying the employment relationship
with the five affiants in their motion for reconsideration, thus: In this case, the contract, duly signed and not disputed by the parties, conspicuously
provides that "no employer-employee relationship exists between" Royale Homes and
x x x Since the five workers were occupying and working on a leased premises of the Alcantara, as well as his sales agents. It is clear that they did not want to be bound by
private respondent, they were called workers of SEIRI (private respondent). Such admission employer-employee relationship atthe time ofthe signing of the contract.
however, does not connote employment. For the truth of the matter, all of the five employees of
the supplier assigned at the leased premises of the private respondent. Because of the Since "the terms of the contract are clear and leave no doubt upon the intention of the
recommendation of the private respondent with regards to the disciplinary measures meted on contracting parties, the literal meaning of itsstipulations should control." No construction is
the five workers, they wanted to hit back against the private respondent. Their motive to even needed asthey already expressly state their intention. Also, this Court adopts the
implicate private respondent was to vindicate. Definitely, they have an axe to grind against the observation of the NLRC that it is rather strange on the part of Alcantara, an educated man
private respondent. Mention has to be made that despite the dismissal of these five (5) and a veteran sales broker who claimed to be receiving P1.2 million as his annual salary, not
witnesses from their service, none of them ever went to the National Labor [Relations] to have contested the portion of the contract expressly indicating that he is not an employee of
Commission and invoked their rights, if any, against their employer or at the very least against Royale Homes if their true intention were otherwise.
the respondent. The reason is obvious, since they knew pretty well that they were not
employees of SEIRI but rather under the employ of Allan Mayol and Faustino Apondar, working In determining the existence of an employer-employee relationship, this Court has
on a leased premise of respondent. x x x generally relied on the four-fold test, to wit: (1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control
Petitioners’ admission that the five affiants were their former employees is binding the employee with respect to the means and methods by which the work is to be
upon them. While they claim that respondent was the employee of their suppliers Mayol and accomplished. Among the four, the most determinative factor in ascertaining the existence of
Apondar, they did not submit proof that the latter were indeed independent contractors; clearly, employeremployee relationship is the "right of control test". "It is deemed to be such an
petitioners failed to discharge their burden of proving their own affirmative allegation. There is important factor that the other requisites may even be disregarded." This holds true where the
thus no showing that the five former employees of SEIRI were motivated by malice, bad faith issues to be resolved iswhether a person who performs work for another is the latter’s
or any ill-motive in executing their affidavit supporting the claims of respondent. employee or is an independent contractor, as in this case. For where the person for whom the
services are performed reserves the right to control not only the end to beachieved, but also
In any controversy between a laborer and his master, doubts reasonably arising from the means by which such end is reached, employer-employee relationship is deemed to exist.
the evidence are resolved in favor of the laborer.
The assertion that control is present since in the performance of his tasks, Alcantara
Royale Homes Marketing Corp. vs. Alcantara, G.R. No. 195190, July 28, 2014, Del is subject to company rules, regulations, code of ethics, and periodic evaluation is not tenable.
Castillo, J. Not every form of control is indicative of employer-employee relationship. A person who
performs work for another and is subjected to its rules, regulations, and code of ethics does
FACTS: Royale Homes, a corporation engaged in marketing real estates, appointed Alcantara not necessarily become an employee. As long as the level of control does not interfere with the
asits Marketing Director for a fixed period of one year. His work consisted mainly of marketing means and methods of accomplishing the assigned tasks, the rules imposed by the hiring
Royale Homes’ realestate inventories on an exclusive basis. Royale Homes reappointed him party on the hired party do not amount to the labor law concept of control that is indicative of
for several consecutive years, the last of which covered the period January 1 to December 31, employer-employee relationship.
2003 where he held the position of Division 5 Vice-President-Sales.
In Insular Life Assurance Co., Ltd. v. National Labor Relations Commission it was
ISSUE: Whether or not Alcantara is an employee of Royale. pronounced that: Logically, the line should be drawn between rules that merely serve as
guidelines towards the achievement of the mutually desired result without dictating the means
HELD: No. The primary evidence of the nature of the parties’ relationship in this case is the or methods to be employed in attaining it, and those that control or fix the methodology and
written contract that they signed and executed in pursuanceof their mutual agreement. While bind or restrict the party hired to the use of such means. The first, which aim only to promote
the existence of employer-employee relationship is a matter of law, the characterization made the result, create no employer-employee relationship unlike the second, which address both
by the parties in their contract as to the nature of their juridical relationship cannot be simply the result and the means used to achieve it. x x x
ignored, particularly in this case where the parties’ written contractunequivocally states their
intention at the time they entered into it.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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In this case, the Court agrees with Royale Homes that the rules, regulations, code of account free from the control and direction of Royale Homes in all matters connected
ethics, and periodic evaluation alluded to byAlcantara do not involve control over the means therewith, except as to the results thereof.
and methods by which he was to perform his job. Understandably, Royale Homes has to fix the
price, impose requirements on prospective buyers, and lay down the terms and conditions of Neither does the repeated hiring of Alcantara prove the existence of employer-
the sale, including the mode of payment, which the independent contractors must follow. It is employee relationship. As discussed above, the absence of control over the means and
also necessary for Royale Homes to allocate its inventories among its independent methods disproves employer-employee relationship. The continuous rehiring of Alcantara
contractors, determine who has priority in selling the same, grant commission or allowance simply signifies the renewal of his contract with Royale Homes, and highlights his satisfactory
based on predetermined criteria, and regularly monitor the result of their marketing and sales services warranting the renewal of such contract. Nor does the exclusivity clause of contract
efforts. But to the mind of this Court, these do not pertain to the means and methods of how establish the existence of the labor law concept of control. In Consulta v. Court of Appeals, it
Alcantara was to perform and accomplish his task of soliciting sales. They do not dictate upon was held that exclusivity of contract does not necessarily result in employer-employee
him the details of how he would solicit sales or the manner as to how he would transact relationship, viz: x x x However, the fact that the appointment required Consulta to solicit
business with prospective clients. In Tongko, this Court held that guidelines or rules and business exclusively for Pamana did not mean that Pamana exercised control over the means
regulations that do not pertain to the means or methods to be employed in attaining the result and methods of Consulta’s work as the term control is understood in labor jurisprudence.
are not indicative of control as understood inlabor law. Neither did it make Consulta an employee of Pamana. Pamana did not prohibit Consulta from
engaging in any other business, or from being connected with any other company, for as long
Thus: From jurisprudence, an important lesson that the first Insular Lifecase teaches as the business [of the] company did not compete with Pamana’s business.
us is that a commitment to abide by the rules and regulations of an insurance company does
not ipso facto make the insurance agent an employee. Neither do guidelines somehow The same scenario obtains in this case. Alcantara was not prohibited from engaging
restrictive of the insurance agent’s conduct necessarily indicate "control" as this term is defined in any other business as long as he does not sell projects of Royale Homes’ competitors. He
in jurisprudence. Guidelines indicative of labor law "control," as the first Insular Lifecase tells can engage in selling various other products or engage in unrelated businesses.
us, should not merely relate to the mutually desirable result intended by the contractual
relationship; they must have the nature of dictating the means or methods to be employed in The element of payment of wages is also absent in thiscase. As provided in the
attaining the result, or of fixing the methodology and of binding or restricting the party hired to contract, Alcantara’s remunerations consist only of commission override of 0.5%, budget
the use of these means.In fact, results-wise, the principal can impose production quotas and allocation, sales incentive and other forms of company support. There is no proof that he
can determine how many agents, with specific territories, ought to be employed to achieve the received fixed monthly salary. No payslip or payroll was ever presented and there is no proof
company’s objectives. These are management policy decisions that the labor law element of that Royale Homes deducted from his supposed salary withholding tax or that it registered him
control cannot reach. Our ruling in these respects in the first Insular Lifecase was practically with the Social Security System, Philippine Health Insurance Corporation, or Pag-Ibig Fund. In
reiterated in Carungcong. Thus, as will be shown more fully below, Manulife’s codes of fact, his Complaint merely states a ballpark figure of his alleged salary of P100,000.00, more
conduct, all of which do not intrude into the insurance agents’ means and manner of or less. All of these indicate an independent contractual relationship. Besides, if Alcantara
conducting their sales and only control them as to the desired results and Insurance Code indeed considered himself an employee of Royale Homes, then he, an experienced and
norms, cannot be used as basis for a finding that the labor law concept of control existed professional broker, would have complained that he was being denied statutorily mandated
between Manulife and Tongko. benefits. But for nine consecutive years, he kept mum about it, signifying that he has agreed,
consented, and accepted the fact that he is not entitled to those employee benefits because he
As the party claiming the existence of employer-employee relationship, it behoved is an independent contractor.
upon Alcantara to prove the elements thereof, particularly Royale Homes’ power of control over
the means and methods of accomplishing the work. He, however, failed to cite specific rules, David vs. Macasio, G.R. No. 195466, July 2, 2014, Brion, J.
regulations or codes of ethics that supposedly imposed control on his means and methods of
soliciting sales and dealing with prospective clients. On the other hand, this case is replete with FACTS: Macasio alleged before the LA that he had been working as a butcher for David since
instances that negate the element of control and the existence of employer-employee January 6, 1995. Macasio claimed that David exercised effective control and supervision over
relationship. Notably, Alcantara was not required to observe definite working hours. Except for his work, pointing out that David: (1) set the work day, reporting time and hogs to be chopped,
soliciting sales, Royale Homes did not assign other tasks to him. He had full control over the as well as the manner by which he was to perform his work; (2) daily paid his salary
means and methods of accomplishing his tasks as he can "solicit sales at any time and by any of P700.00, which was increased from P600.00 in 2007, P500.00 in 2006 and P400.00 in
manner which [he may] deem appropriate and necessary." He performed his tasks on his own 2005; and (3) approved and disapproved his leaves. Macasio added that David owned the
hogs delivered for chopping, as well as the work tools and implements; the latter also rented
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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the workplace. Macasio further claimed that David employs about twenty-five (25) butchers Macasio had been performing his tasks. Moreover, Macasio would leave the workplace only
and delivery drivers. after he had finished chopping all of the hog meats given to him for the day’s task. Also, David
would still engage Macasio’s services and have him report for work even during the days when
ISSUE: Whether or not Macasio is an employee of David. only few hogs were delivered for butchering.

HELD: Yes. Engagement on "pakyaw" or task basis does not characterize the relationship Under this overall setup, all those working for David, including Macasio, could
that may exist between the parties, i.e., whether one of employment or independent naturally be expected to observe certain rules and requirements and David would necessarily
contractorship. Article 97(6) of the Labor Code defines wages as "xxx the remuneration or exercise some degree of control as the chopping of the hog meats would be subject to his
earnings, however designated, capable of being expressed in terms of money, whether fixed or specifications. Also, since Macasio performed his tasks at David’s workplace, David could
ascertained on a time, task, piece, or commission basis, or other method of calculating the easily exercise control and supervision over the former. Accordingly, whether or not David
same, which is payable by an employer to an employee under a written or unwritten contract of actually exercised this right or power to control is beside the point as the law simply requires
employment for work done or to be done, or for services rendered or to be rendered." In the existence of this power to control or, as in this case, the existence of the right and
relation to Article 97(6), Article 101 of the Labor Code speaks of workers paid by results or opportunity to control and supervise Macasio.
those whose pay is calculated in terms of the quantity or quality of their work output which
includes "pakyaw" work and other non-time work. At this point, we note that all three tribunals – the LA, the NLRC and the CA – found
that Macasio was engaged or paid on "pakyaw" or task basis. This factual finding binds the
To determine the existence of an employer-employee relationship, four elements Court under the rule that factual findings of labor tribunals when supported by the established
generally need to be considered, namely: (1) the selection and engagement of the employee; facts and in accord with the laws, especially when affirmed by the CA, is binding on this Court.
(2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct. These elements or indicators comprise the so-called "four-fold" test of A distinguishing characteristic of "pakyaw" or task basis engagement, as opposed to
employment relationship. Macasio’s relationship with David satisfies this test. straight-hour wage payment, is the non-consideration of the time spent in working. In a task-
basis work, the emphasis is on the task itself, in the sense that payment is reckoned in terms
First, David engaged the services of Macasio, thus satisfying the element of of completion of the work, not in terms of the number of time spent in the completion of
"selection and engagement of the employee." David categorically confirmed this fact when, in work. Once the work or task is completed, the worker receives a fixed amount as wage,
his "Sinumpaang Salaysay," he stated that "nag apply po siya sa akin at kinuha ko siya na without regard to the standard measurements of time generally used in pay computation.
chopper[.]" Also, Solano and Antonio stated in their "Pinagsamang Sinumpaang Salaysay" that
"[k]ami po ay nagtratrabaho sa Yiels xxx na pag-aari ni Ariel David bilang butcher" and "kilala In Macasio’s case, the established facts show that he would usually start his work at
namin si xxx Macasio na isa ring butcher xxx ni xxx David at kasama namin siya sa aming 10:00 p.m. Thereafter, regardless of the total hours that he spent at the workplace or of the
trabaho." total number of the hogs assigned to him for chopping, Macasio would receive the fixed
amount of P700.00 once he had completed his task. Clearly, these circumstances show a
Second, David paid Macasio’s wages. Both David and Macasio categorically stated "pakyaw" or task basis engagement that all three tribunals uniformly found.
in their respective pleadings before the lower tribunals and even before this Court that the
former had been paying the latter P700.00 each day after the latter had finished the day’s task. In sum, the existence of employment relationship between the parties is determined
Solano and Antonio also confirmed this fact of wage payment in their "Pinagsamang by applying the "four-fold" test; engagement on "pakyaw" or task basis does not determine the
Sinumpaang Salaysay." This satisfies the element of "payment of wages." parties’ relationship as it is simply a method of pay computation. Accordingly, Macasio is
David’s employee, albeit engaged on "pakyaw" or task basis.
Third, David had been setting the day and time when Macasio should report for work.
This power to determine the work schedule obviously implies power of control. By having the b. Economic reality/dependence test
power to control Macasio’s work schedule, David could regulate Macasio’s work and could
even refuse to give him any assignment, thereby effectively dismissing him. Francisco vs. NLRC, G.R. No. 170087, August 31, 2006, Ynarez-Santiago, J.

And fourth, David had the right and power to control and supervise Macasio’s work as FACTS: Angelina Francisco was hired by Kasei Corporation during its incorporation stage.
to the means and methods of performing it. In addition to setting the day and time when She was designated as Accountant and Corporate Secretary and was assigned to handle all
Macasio should report for work, the established facts show that David rents the place where the accounting needs of the company. She was also designated as Liaison Officer to the City
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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of Makati to secure business permits, construction permits and other licenses for the initial
operation of the company. However, in certain cases the control test is not sufficient to give a complete picture of
the relationship between the parties, owing to the complexity of such a relationship where
Although she was designated as Corporate Secretary, she was not entrusted with the several positions have been held by the worker. There are instances when, aside from the
corporate documents; neither did she attend any board meeting nor required to do so. She employer’s power to control the employee with respect to the means and methods by which
never prepared any legal document and never represented the company as its Corporate the work is to be accomplished, economic realities of the employment relations help
Secretary. However, on some occasions, she was prevailed upon to sign documentation for provide a comprehensive analysis of the true classification of the individual, whether as
the company. employee, independent contractor, corporate officer or some other capacity.

In 1996, Francisco was designated Acting Manager. The corporation also hired Gerry The better approach would therefore be to adopt a two-tiered test involving: (1) the
Nino as accountant in lieu of petitioner. As Acting Manager, Francisco was assigned to handle putative employer’s power to control the employee with respect to the means and methods by
recruitment of all employees and perform management administration functions; represent the which the work is to be accomplished; and (2) the underlying economic realities of the activity
company in all dealings with government agencies, especially with the Bureau of Internal or relationship.
Revenue (BIR), Social Security System (SSS) and in the city government of Makati; and to
administer all other matters pertaining to the operation of Kasei Restaurant which is owned This two-tiered test would provide us with a framework of analysis, which would take
and operated by Kasei Corporation. into consideration the totality of circumstances surrounding the true nature of the relationship
between the parties. This is especially appropriate in this case where there is no written
For five years, petitioner performed the duties of Acting Manager. As of December 31, agreement or terms of reference to base the relationship on; and due to the complexity of the
2000 her salary was P27,500.00 plus P3,000.00 housing allowance and a 10% share in the relationship based on the various positions and responsibilities given to the worker over the
profit of Kasei Corporation. In January 2001, Francisco was replaced by Liza R. Fuentes as period of the latter’s employment.
Manager. Francisco alleged that she was required to sign a prepared resolution for her
replacement but she was assured that she would still be connected with Kasei Corporation. The control test initially found application in the case of Viaña v. Al-Lagadan and
Timoteo Acedo, the designated Treasurer, convened a meeting of all employees of Kasei Piga, and lately in Leonardo v. Court of Appeals, where we held that there is an employer-
Corporation and announced that nothing had changed and that Francisco was still connected employee relationship when the person for whom the services are performed reserves the right
with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters. to control not only the end achieved but also the manner and means used to achieve that end.

Thereafter, Kasei Corporation reduced her salary by P2,500.00 a month beginning In Sevilla v. Court of Appeals, we observed the need to consider the existing
January up to September 2001 for a total reduction of P22,500.00 as of September 2001. economic conditions prevailing between the parties, in addition to the standard of right-of-
Francisco was not paid her mid-year bonus allegedly because the company was not earning control like the inclusion of the employee in the payrolls, to give a clearer picture in determining
well. On October 2001, Francisco did not receive her salary from the company. She made the existence of an employer-employee relationship based on an analysis of the totality of
repeated follow-ups with the company cashier but she was advised that the company was not economic circumstances of the worker.
earning well.
On October 15, 2001, Francisco asked for her salary from Acedo and the rest of the officers Thus, the determination of the relationship between employer and employee depends
but she was informed that she is no longer connected with the company. upon the circumstances of the whole economic activity, such as: (1) the extent to which
the services performed are an integral part of the employer’s business; (2) the extent of the
ISSUE: Whether or not Francisco is an employee of Kasei Corporation. worker’s investment in equipment and facilities; (3) the nature and degree of control exercised
by the employer; (4) the worker’s opportunity for profit and loss; (5) the amount of initiative,
HELD: Yes. We held in Sevilla v. Court of Appeals that in this jurisdiction, there has been no skill, judgment or foresight required for the success of the claimed independent enterprise; (6)
uniform test to determine the existence of an employer-employee relation. Generally, courts the permanency and duration of the relationship between the worker and the employer; and (7)
have relied on the so-called right of control test where the person for whom the services are the degree of dependency of the worker upon the employer for his continued employment in
performed reserves a right to control not only the end to be achieved but also the means to be that line of business.
used in reaching such end. In addition to the standard of right-of-control, the existing
economic conditions prevailing between the parties, like the inclusion of the employee in the The proper standard of economic dependence is whether the worker is dependent on
payrolls, can help in determining the existence of an employer-employee relationship. the alleged employer for his continued employment in that line of business. In the United
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
Page 13
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States, the touchstone of economic reality in analyzing possible employment relationships for agencies. Petitioner was never entrusted with corporate documents of the company, nor
purposes of the Federal Labor Standards Act is dependency. By analogy, the benchmark of required to attend the meeting of the corporation. She was never privy to the preparation of
economic reality in analyzing possible employment relationships for purposes of the Labor any document for the corporation, although once in a while she was required to sign prepared
Code ought to be the economic dependence of the worker on his employer. documentation for the company.

By applying the control test, there is no doubt that petitioner is an employee of Kasei The second affidavit of Kamura dated March 7, 2002 which repudiated the December
Corporation because she was under the direct control and supervision of Seiji Kamura, the 5, 2001 affidavit has been allegedly withdrawn by Kamura himself from the records of the
corporation’s Technical Consultant. She reported for work regularly and served in various case. Regardless of this fact, we are convinced that the allegations in the first affidavit are
capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager and Corporate sufficient to establish that petitioner is an employee of Kasei Corporation.
Secretary, with substantially the same job functions, that is, rendering accounting and tax
services to the company and performing functions necessary and desirable for the proper Granting arguendo, that the second affidavit validly repudiated the first one, courts do
operation of the corporation such as securing business permits and other licenses over an not generally look with favor on any retraction or recanted testimony, for it could have been
indefinite period of engagement. secured by considerations other than to tell the truth and would make solemn trials a mockery
and place the investigation of the truth at the mercy of unscrupulous witnesses. A recantation
Under the broader economic reality test, the petitioner can likewise be said to be an does not necessarily cancel an earlier declaration, but like any other testimony the same is
employee of respondent corporation because she had served the company for six years before subject to the test of credibility and should be received with caution.
her dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month
pay, bonuses and allowances, as well as deductions and Social Security contributions from Based on the foregoing, there can be no other conclusion that petitioner is an
August 1, 1999 to December 18, 2000. When petitioner was designated General Manager, employee of respondent Kasei Corporation. She was selected and engaged by the company
respondent corporation made a report to the SSS signed by Irene Ballesteros. Petitioner’s for compensation, and is economically dependent upon respondent for her continued
membership in the SSS as manifested by a copy of the SSS specimen signature card which employment in that line of business. Her main job function involved accounting and tax
was signed by the President of Kasei Corporation and the inclusion of her name in the on-line services rendered to respondent corporation on a regular basis over an indefinite period of
inquiry system of the SSS evinces the existence of an employer-employee relationship engagement. Respondent corporation hired and engaged petitioner for compensation, with the
between petitioner and respondent corporation. power to dismiss her for cause. More importantly, respondent corporation had the power to
control petitioner with the means and methods by which the work is to be accomplished.
It is therefore apparent that petitioner is economically dependent on respondent
corporation for her continued employment in the latter’s line of business.
Orozco vs. CA, G.R. No. 155207, August 13, 2008, Nachura, J. (Possible Bar Problem)
In Domasig v. National Labor Relations Commission, we held that in a business
establishment, an identification card is provided not only as a security measure but mainly to FACTS: Philippine Daily Inquirer (PDI) engaged the services of Wilhelmina S. Orozco to write
identify the holder thereof as a bona fide employee of the firm that issues it. Together with the a weekly column for its Lifestyle section. She religiously submitted her articles every week,
cash vouchers covering petitioner’s salaries for the months stated therein, these matters except for a six-month stint in New York City when she, nonetheless, sent several articles
constitute substantial evidence adequate to support a conclusion that petitioner was an through mail. She received compensation of P250.00 – later increased to P300.00 – for every
employee of private respondent. column published.

We likewise ruled in Flores v. Nuestro that a corporation who registers its workers ISSUE: Whether or not Orozco is an employee of PDI.
with the SSS is proof that the latter were the former’s employees. The coverage of Social
Security Law is predicated on the existence of an employer-employee relationship. HELD: No. This Court has constantly adhered to the "four-fold test" to determine whether
there exists an employer-employee relationship between parties. The four elements of an
Furthermore, the affidavit of Seiji Kamura dated December 5, 2001 has clearly employment relationship are: (a) the selection and engagement of the employee; (b) the
established that petitioner never acted as Corporate Secretary and that her designation as payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the
such was only for convenience. The actual nature of petitioner’s job was as Kamura’s direct employee’s conduct.
assistant with the duty of acting as Liaison Officer in representing the company to secure
construction permits, license to operate and other requirements imposed by government
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
Page 14
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Of these four elements, it is the power of control which is the most crucial and most and significant issues aside from not being late or amiss in the responsibility of timely
determinative factor, so important, in fact, that the other elements may even be submission of their articles.
disregarded. As this Court has previously held: the significant factor in determining the
relationship of the parties is the presence or absence of supervisory authority to control the The PETITIONER was disciplined to submit her articles on highly relevant and
method and the details of performance of the service being rendered, and the degree to which significant issues on time by the PRIVATE RESPONDENTS who have a say on
the principal may intervene to exercise such control. whether the topics belong to those considered as highly relevant and significant,
through the Lifestyle Section Editor. The PETITIONER had to discuss the topics first
In other words, the test is whether the employer controls or has reserved the right to and submit the articles two days before publication date to keep her column in the
control the employee, not only as to the work done, but also as to the means and methods by newspaper space regularly as expected or without miss by its readers.
which the same is accomplished.
Given this discussion by petitioner, we then ask the question: Is this the form of
Petitioner argues that several factors exist to prove that respondents exercised control that our labor laws contemplate such as to establish an employer-employee
control over her and her work, namely: relationship between petitioner and respondent PDI? It is not.

a. As to the Contents of her Column – The PETITIONER had to insure that the Petitioner has misconstrued the "control test," as did the Labor Arbiter and the NLRC.
contents of her column hewed closely to the objectives of its Lifestyle Section and the Not all rules imposed by the hiring party on the hired party indicate that the latter is an
over-all principles that the newspaper projects itself to stand for. As admitted, she employee of the former. Rules which serve as general guidelines towards the achievement of
wanted to write about death in relation to All Souls Day but was advised not to. the mutually desired result are not indicative of the power of control. Thus, this Court has
explained:
b. As to Time Control – The PETITIONER, as a columnist, had to observe the
deadlines of the newspaper for her articles to be published. These deadlines were It should, however, be obvious that not every form of control that the hiring party
usually that time period when the Section Editor has to "close the pages" of the reserves to himself over the conduct of the party hired in relation to the services
Lifestyle Section where the column in located. "To close the pages" means to prepare rendered may be accorded the effect of establishing an employer-employee
them for printing and publication. relationship between them in the legal or technical sense of the term. A line must be
drawn somewhere, if the recognized distinction between an employee and an
As a columnist, the PETITIONER’s writings had a definite day on which it was going individual contractor is not to vanish altogether. Realistically, it would be a rare
to appear. So she submitted her articles two days before the designated day on which contract of service that gives untrammelled freedom to the party hired and eschews
the column would come out. any intervention whatsoever in his performance of the engagement.

This is the usual routine of newspaper work. Deadlines are set to fulfill the Logically, the line should be drawn between rules that merely serve as guidelines
newspapers’ obligations to the readers with regard to timeliness and freshness of towards the achievement of the mutually desired result without dictating the means or
ideas. methods to be employed in attaining it, and those that control or fix the methodology
and bind or restrict the party hired to the use of such means. The first, which aim only
c. As to Control of Space – The PETITIONER was told to submit only two or three to promote the result, create no employer-employee relationship unlike the second,
pages of article for the column, (sic) "Feminist Reflections" per week. To go beyond which address both the result and the means used to achieve it. x x x.
that, the Lifestyle editor would already chop off the article and publish the rest for the
next week. This shows that PRIVATE RESPONDENTS had control over the space The main determinant therefore is whether the rules set by the employer are meant to
that the PETITIONER was assigned to fill. control not just the results of the work but also the means and method to be used by the hired
party in order to achieve such results. Thus, in this case, we are to examine the factors
d. As to Discipline – Over time, the newspaper readers’ eyes are trained or habituated enumerated by petitioner to see if these are merely guidelines or if they indeed fulfill the
to look for and read the works of their favorite regular writers and columnists. They requirements of the control test.
are conditioned, based on their daily purchase of the newspaper, to look for specific
spaces in the newspapers for their favorite write-ups/or opinions on matters relevant Petitioner believes that respondents’ acts are meant to control how she executes her
work. We do not agree. A careful examination reveals that the factors enumerated by the
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
Page 15
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petitioner are inherent conditions in running a newspaper. In other words, the so-called control In contrast, a regular reporter is not as independent in doing his or her work for the
as to time, space, and discipline are dictated by the very nature of the newspaper business newspaper. We note the common practice in the newspaper business of assigning its regular
itself. reporters to cover specific subjects, geographical locations, government agencies, or areas of
concern, more commonly referred to as "beats." A reporter must produce stories within his or
We agree with the observations of the Office of the Solicitor General that: The her particular beat and cannot switch to another beat without permission from the editor. In
Inquirer is the publisher of a newspaper of general circulation which is widely read throughout most newspapers also, a reporter must inform the editor about the story that he or she is
the country. As such, public interest dictates that every article appearing in the newspaper working on for the day. The story or article must also be submitted to the editor at a specified
should subscribe to the standards set by the Inquirer, with its thousands of readers in mind. It time. Moreover, the editor can easily pull out a reporter from one beat and ask him or her to
is not, therefore, unusual for the Inquirer to control what would be published in the newspaper. cover another beat, if the need arises.
What is important is the fact that such control pertains only to the end result, i.e., the submitted
articles. The Inquirer has no control over [petitioner] as to the means or method used by her in This is not the case for petitioner. Although petitioner had a weekly deadline to meet,
the preparation of her articles. The articles are done by [petitioner] herself without any she was not precluded from submitting her column ahead of time or from submitting columns
intervention from the Inquirer. to be published at a later time. More importantly, respondents did not dictate upon petitioner
the subject matter of her columns, but only imposed the general guideline that the article
Petitioner has not shown that PDI, acting through its editors, dictated how she was to should conform to the standards of the newspaper and the general tone of the particular
write or produce her articles each week. Aside from the constraints presented by the space section.
allocation of her column, there were no restraints on her creativity; petitioner was free to write
her column in the manner and style she was accustomed to and to use whatever research Where a person who works for another performs his job more or less at his own
method she deemed suitable for her purpose. The apparent limitation that she had to write pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is
only on subjects that befitted the Lifestyle section did not translate to control, but was simply a compensated according to the result of his efforts and not the amount thereof, no employer-
logical consequence of the fact that her column appeared in that section and therefore had to employee relationship exists.
cater to the preference of the readers of that section.
Aside from the control test, this Court has also used the economic reality test. The
The perceived constraint on petitioner’s column was dictated by her own choice of her economic realities prevailing within the activity or between the parties are examined, taking
column’s perspective. The column title "Feminist Reflections" was of her own choosing, as she into consideration the totality of circumstances surrounding the true nature of the relationship
herself admitted, since she had been known as a feminist writer. Thus, respondent PDI, as well between the parties. This is especially appropriate when, as in this case, there is no written
as her readers, could reasonably expect her columns to speak from such perspective. agreement or contract on which to base the relationship. In our jurisdiction, the benchmark of
economic reality in analyzing possible employment relationships for purposes of applying the
Contrary to petitioner’s protestations, it does not appear that there was any actual Labor Code ought to be the economic dependence of the worker on his employer.
restraint or limitation on the subject matter – within the Lifestyle section – that she could write
about. Respondent PDI did not dictate how she wrote or what she wrote in her column. Neither Petitioner’s main occupation is not as a columnist for respondent but as a women’s
did PDI’s guidelines dictate the kind of research, time, and effort she put into each column. In rights advocate working in various women’s organizations. Likewise, she herself admits that
fact, petitioner herself said that she received "no comments on her articles…except for her to she also contributes articles to other publications. Thus, it cannot be said that petitioner was
shorten them to fit into the box allotted to her column." Therefore, the control that PDI dependent on respondent PDI for her continued employment in respondent’s line of business.
exercised over petitioner was only as to the finished product of her efforts, i.e., the column
itself, by way of either shortening or outright rejection of the column. The inevitable conclusion is that petitioner was not respondent PDI’s employee but an
independent contractor, engaged to do independent work.
The newspaper’s power to approve or reject publication of any specific article she
wrote for her column cannot be the control contemplated in the "control test," as it is but logical There is no inflexible rule to determine if a person is an employee or an independent
that one who commissions another to do a piece of work should have the right to accept or contractor; thus, the characterization of the relationship must be made based on the particular
reject the product. The important factor to consider in the "control test" is still the element of circumstances of each case. There are several factors that may be considered by the courts,
control over how the work itself is done, not just the end result thereof. but as we already said, the right to control is the dominant factor in determining whether one is
an employee or an independent contractor.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
Page 16
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In our jurisdiction, the Court has held that an independent contractor is one who his work - how he delivered his lines and appeared on television - did not meet ABS-
carries on a distinct and independent business and undertakes to perform the job, work, or CBN’s approval. This proves that ABS-CBN’s control was limited only to the result of
service on one’s own account and under one’s own responsibility according to one’s own SONZA’s work, whether to broadcast the final product or not. In either case, ABS-
manner and method, free from the control and direction of the principal in all matters CBN must still pay SONZA’s talent fees in full until the expiry of the Agreement.
connected with the performance of the work except as to the results thereof.
In Vaughan, et al. v. Warner, et al., the United States Circuit Court of Appeals ruled
On this point, Sonza v. ABS-CBN Broadcasting Corporation is enlightening. In that that vaudeville performers were independent contractors although the management
case, the Court found, using the four-fold test, that petitioner, Jose Y. Sonza, was not an reserved the right to delete objectionable features in their shows. Since the
employee of ABS-CBN, but an independent contractor. Sonza was hired by ABS-CBN due to management did not have control over the manner of performance of the skills of the
his "unique skills, talent and celebrity status not possessed by ordinary employees," a artists, it could only control the result of the work by deleting objectionable features.
circumstance that, the Court said, was indicative, though not conclusive, of an independent
contractual relationship. Independent contractors often present themselves to possess unique SONZA further contends that ABS-CBN exercised control over his work by supplying
skills, expertise or talent to distinguish them from ordinary employees. The Court also found all equipment and crew. No doubt, ABS-CBN supplied the equipment, crew and
that, as to payment of wages, Sonza’s talent fees were the result of negotiations between him airtime needed to broadcast the "Mel & Jay" programs. However, the equipment, crew
and ABS-CBN. As to the power of dismissal, the Court found that the terms of Sonza’s and airtime are not the "tools and instrumentalities" SONZA needed to perform his
engagement were dictated by the contract he entered into with ABS-CBN, and the same job. What SONZA principally needed were his talent or skills and the costumes
contract provided that either party may terminate the contract in case of breach by the other of necessary for his appearance. Even though ABS-CBN provided SONZA with the
the terms thereof. However, the Court held that the foregoing are not determinative of an place of work and the necessary equipment, SONZA was still an independent
employer-employee relationship. Instead, it is still the power of control that is most important. contractor since ABS-CBN did not supervise and control his work. ABS-CBN’s sole
concern was for SONZA to display his talent during the airing of the programs.
On the power of control, the Court found that in performing his work, Sonza only
needed his skills and talent – how he delivered his lines, appeared on television, and sounded A radio broadcast specialist who works under minimal supervision is an independent
on radio were outside ABS-CBN’s control. Thus: contractor. SONZA’s work as television and radio program host required special skills
and talent, which SONZA admittedly possesses. The records do not show that ABS-
We find that ABS-CBN was not involved in the actual performance that produced the CBN exercised any supervision and control over how SONZA utilized his skills and
finished product of SONZA’s work. ABS-CBN did not instruct SONZA how to perform talent in his shows.
his job. ABS-CBN merely reserved the right to modify the program format and airtime
schedule "for more effective programming." ABS-CBN’s sole concern was the quality The instant case presents a parallel to Sonza. Petitioner was engaged as a columnist
of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise for her talent, skill, experience, and her unique viewpoint as a feminist advocate. How she
control over the means and methods of performance of SONZA’s work. utilized all these in writing her column was not subject to dictation by respondent. As in Sonza,
respondent PDI was not involved in the actual performance that produced the finished product.
SONZA claims that ABS-CBN’s power not to broadcast his shows proves ABS-CBN’s It only reserved the right to shorten petitioner’s articles based on the newspaper’s capacity to
power over the means and methods of the performance of his work. Although ABS- accommodate the same. This fact, we note, was not unique to petitioner’s column. It is a reality
CBN did have the option not to broadcast SONZA’s show, ABS-CBN was still in the newspaper business that space constraints often dictate the length of articles and
obligated to pay SONZA’s talent fees... Thus, even if ABS-CBN was completely columns, even those that regularly appear therein.
dissatisfied with the means and methods of SONZA’s performance of his work, or
even with the quality or product of his work, ABS-CBN could not dismiss or even Furthermore, respondent PDI did not supply petitioner with the tools and
discipline SONZA. All that ABS-CBN could do is not to broadcast SONZA’s show but instrumentalities she needed to perform her work. Petitioner only needed her talent and skill to
ABS-CBN must still pay his talent fees in full. come up with a column every week. As such, she had all the tools she needed to perform her
work.
Clearly, ABS-CBN’s right not to broadcast SONZA’s show, burdened as it was by the
obligation to continue paying in full SONZA’s talent fees, did not amount to control c. Who determines employer-employee relationship
over the means and methods of the performance of SONZA’s work. ABS-CBN could
not terminate or discipline SONZA even if the means and methods of performance of People’s Broadcasting vs. SOLE, G.R. No. 179652, March 6, 2012, Velasco, J. (2016 Bar)
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
Page 17
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It must also be remembered that the power of the DOLE to determine the existence of
Doctrine. No limitation in the law was placed upon the power of the DOLE to an employer-employee relationship need not necessarily result in an affirmative finding. The
determine the existence of an employer-employee relationship. No procedure was laid down DOLE may well make the determination that no employer-employee relationship exists, thus
where the DOLE would only make a preliminary finding, that the power was primarily held by divesting itself of jurisdiction over the case. It must not be precluded from being able to reach
the NLRC. The law did not say that the DOLE would first seek the NLRC’s determination of the its own conclusions, not by the parties, and certainly not by this Court.
existence of an employer-employee relationship, or that should the existence of the employer-
employee relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
must have the power to determine whether or not an employer-employee relationship exists, empowered to make a determination as to the existence of an employer-employee relationship
and from there to decide whether or not to issue compliance orders in accordance with Art. in the exercise of its visitorial and enforcement power, subject to judicial review, not review by
128(b) of the Labor Code, as amended by RA 7730. the NLRC.

The DOLE, in determining the existence of an employer-employee relationship, has a There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730,
ready set of guidelines to follow, the same guide the courts themselves use. The elements to there is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money
determine the existence of an employment relationship are: (1) the selection and engagement claims are involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the regional
of the employee; (2) the payment of wages; (3) the power of dismissal; (4) the employer’s director of the DOLE, under Art. 129, and if the amount involved exceeds PhP 5,000, the
power to control the employee’s conduct. The use of this test is not solely limited to the NLRC. jurisdiction is with the labor arbiter, under Art. 217. The view states that despite the wording of
The DOLE Secretary, or his or her representatives, can utilize the same test, even in the Art. 128(b), this would only apply in the course of regular inspections undertaken by the DOLE,
course of inspection, making use of the same evidence that would have been presented before as differentiated from cases under Arts. 129 and 217, which originate from complaints. There
the NLRC. are several cases, however, where the Court has ruled that Art. 128(b) has been amended to
expand the powers of the DOLE Secretary and his duly authorized representatives by RA
The determination of the existence of an employer-employee relationship by the 7730. In these cases, the Court resolved that the DOLE had the jurisdiction, despite the
DOLE must be respected. The expanded visitorial and enforcement power of the DOLE amount of the money claims involved. Furthermore, in these cases, the inspection held by the
granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple DOLE regional director was prompted specifically by a complaint. Therefore, the initiation of a
expedient of disputing the employer-employee relationship, force the referral of the matter to case through a complaint does not divest the DOLE Secretary or his duly authorized
the NLRC. The Court issued the declaration that at least a prima facie showing of the absence representative of jurisdiction under Art. 128(b).
of an employer-employee relationship be made to oust the DOLE of jurisdiction. But it is
precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to To recapitulate, if a complaint is brought before the DOLE to give effect to the labor
see if the same does successfully refute the existence of an employer-employee relationship. standards provisions of the Labor Code or other labor legislation, and there is a finding by the
DOLE that there is an existing employer-employee relationship, the DOLE exercises
If the DOLE makes a finding that there is an existing employer-employee relationship, jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employer-employee
it takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no relationship, the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE,
jurisdiction only if the employer-employee relationship has already been terminated, or it and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor
appears, upon review, that no employer-employee relationship existed in the first place. Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original
and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and
The Court, in limiting the power of the DOLE, gave the rationale that such limitation other terms and conditions of employment, if accompanied by a claim for reinstatement. If a
would eliminate the prospect of competing conclusions between the DOLE and the NLRC. The complaint is filed with the NLRC, and there is still an existing employer-employee relationship,
prospect of competing conclusions could just as well have been eliminated by according the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be
respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is the more questioned through a petition for certiorari under Rule 65 of the Rules of Court.
prudent course of action to take.
In the present case, the finding of the DOLE Regional Director that there was an
This is not to say that the determination by the DOLE is beyond question or employer-employee relationship has been subjected to review by this Court, with the finding
review. Suffice it to say, there are judicial remedies such as a petition for certiorari under Rule being that there was no employer-employee relationship between petitioner and private
65 that may be availed of, should a party wish to dispute the findings of the DOLE. respondent, based on the evidence presented. Private respondent presented self-serving
allegations as well as self-defeating evidence. The findings of the Regional Director were not
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
Page 18
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based on substantial evidence, and private respondent failed to prove the existence of an
employer-employee relationship. The DOLE had no jurisdiction over the case, as there was no The Court of Appeals, NLRC, and the labor arbiter found that respondent incurred
employer-employee relationship present. Thus, the dismissal of the complaint against unauthorized absences, but concluded that the penalty of discharge or determination was
petitioner is proper. disproportionate to respondents absences in view of SMCs inconsistent and lax
implementation of its policy on employees attendance. The Court disagrees. Respondents
E. Management Prerogative dismissal was well within the purview of SMCs management prerogative.

a. Definition/Basis What the lower tribunals perceived as laxity, we consider as leniency. SMCs tendency
to excuse justified absences actually redounded to the benefit of respondent since the
San Miguel Corporation vs. NLRC, G.R. No. 146121-22, April 16, 2008, Tinga, J. imposition of the corresponding penalty would have been deleterious to him. In a world where
no work-no pay is the rule of thumb, several days of suspension would be difficult for an
Doctrine. Respondents time cards showed that he was on AWOP on the dates ordinary working man like respondent. He should be thankful that SMC did not exact from him
enumerated by SMC: 2, 4 and 11 January; 26, 28 and 29 April; and 5, 7, 8, 13, 21, 22, 28 and almost 70 days suspension before he was finally dismissed from work.
29 May 1997. The Labor Arbiter even found that respondent was on AWOP on all said
dates. Respondent also admitted being absent on 28 and 29 April and 7 and 8 May 1997. For In any case, when SMC imposed the penalty of dismissal for the 12 th and
th
each of the periods of 1 to 15 January 1997 and 16 to 30 April 1997, respondent reported for 13 AWOPs, it was acting well within its rights as an employer. An employer has the
work only for two days. For the month of May 1997, he reported only for one day. prerogative to prescribe reasonable rules and regulations necessary for the proper conduct of
its business, to provide certain disciplinary measures in order to implement said rules and to
The Court observes that respondent admitted during the company-level investigation assure that the same would be complied with. An employer enjoys a wide latitude of discretion
that that his absences incurred on 28 and 29 April, and 7 and 8 May 1997 were without in the promulgation of policies, rules and regulations on work-related activities of the
permission. He explained that during those times, he had a family problem which needed his employees.
attention; he was confused and was unable to inform or seek permission from his superior.
It is axiomatic that appropriate disciplinary sanction is within the purview of
However, while respondent has admitted these absences, before the Court, he also management imposition. Thus, in the implementation of its rules and policies, the employer
seeks to belittle the plain by countering that SMC has not been too rigid in its application of has the choice to do so strictly or not, since this is inherent in its right to control and manage its
company rules pertaining to leave availments. In the proceedings below he claimed that during business effectively. Consequently, management has the prerogative to impose sanctions
the days that he was absent, he had attended to some family matters. Thus, he presented lighter than those specifically prescribed by its rules, or to condone completely the violations of
copies of two (2) medical certificates and a barangay certification that he attended hearings on its erring employees. Of course, this prerogative must be exercised free of grave abuse of
some of the days when he was absent. These certifications, however, cannot work to erase his discretion, bearing in mind the requirements of justice and fair play. Indeed, we have
AWOPs; respondent had never submitted these documents to SMC and it is only when the previously stated:
case was pending before the Labor Arbiter that he produced the same.
Management also has its own rights, which, as such, are entitled
Respondent cannot feign surprise nor ignorance of the earlier AWOPs he had to respect and enforcement in the interest of simple fair play. Out of its
incurred. He was given a warning for his 2, 4, and 11 January and 26, 28, and 29 April concern for those with [fewer] privileges in life, the Supreme Court has
1997AWOPs. In the same warning, he was informed that he already had six AWOPs for 1997. inclined more often than not toward the worker and upheld his cause in his
He admitted that he was absent on 7 and 8 May 1997. He was also givennotices to explain his conflicts with the employer. Such favoritism, however, has not blinded the
AWOPs for the period 26 May to 2 June 1997, which he received but refused to Court to rule that justice is in every case for the deserving, to be dispensed
acknowledge. It does not take a genius to figure out that as early as June 1997, he had more in the light of the established facts and applicable law and doctrine.
than nine AWOPs.
All told, we find that SMC acted well within its rights when it dismissed respondent for
Thus, even if he was not punished for his subsequent AWOPs, the same remained on his numerous absences. Respondent was afforded due process and was validly dismissed for
record. He was aware of the number of AWOPs he incurred and should have knownthat these cause.
were punishable under company rules. The fact that he was spared from suspension cannot
be used as a reason to incur further AWOPs and be absolved from the penalty therefor. b. Not subject to judicial interference; Exceptions
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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As can be seen, retrenchment was utilized by respondent only as an available option in case
Morales vs. Harbour Centre Port Terminal, G.R. No. 174208, January 25, 2012, Perez, J. the affected employee would not want to be transferred. Respondent did not proceed directly
to retrench. This, to our mind, is an indication of good faith on respondent’s part as it
Doctrine. In cases of a transfer of an employee, the rule is settled that the employer exhausted other possible measures other than retrenchment. Besides, the employer’s
is charged with the burden of proving that its conduct and action are for valid and legitimate prerogative to bring down labor costs by retrenching must be exercised essentially as a
grounds such as genuine business necessity and that the transfer is not unreasonable, measure of last resort, after less drastic means have been tried and found wanting. Giving the
inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of workers an option to be transferred without any diminution in rank and pay specifically belie
proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal. petitioner’s allegation that the alleged streamlining scheme was implemented as a ploy to ease
out employees, thus, the absence of bad faith. Apparently, respondent implemented its
Admittedly, the right of employees to security of tenure does not give them vested streamlining or reorganization plan with good faith, not in an arbitrary manner and without
rights to their positions to the extent of depriving management of its prerogative to change their prejudicing the tenurial rights of its employees.
assignments or to transfer them. By management prerogative is meant the right of an
employer to regulate all aspects of employment, such as the freedom to prescribe work Petitioner harps on the fact that there was no actual shutdown of Paper Mill No. 4 but
assignments, working methods, processes to be followed, regulation regarding transfer of that it continued to be operational. No evidence, however, was presented to prove that there
employees, supervision of their work, lay-off and discipline, and dismissal and recall of was continuous operation after the shutdown in the year 1999. What the records reveal is that
workers. Although jurisprudence recognizes said management prerogative, it has been ruled Paper Mill No. 4 resumed its operation in 2000 due to a more favorable business climate. The
that the exercise thereof, while ordinarily not interfered with, is not absolute and is subject to resumption of its industrial paper manufacturing operations does not, however, make
limitations imposed by law, collective bargaining agreement, and general principles of fair play respondent’s streamlining/reorganization plan illegal because, again, the abolishment of Paper
and justice. Thus, an employer may transfer or assign employees from one office or area of Mill No. 4 in 1999 was a business judgment arrived at to prevent a possible financial drain at
operation to another, provided there is no demotion in rank or diminution of salary, benefits, that time. As long as no arbitrary or malicious action on the part of an employer is shown, the
and other privileges, and the action is not motivated by discrimination, made in bad faith, or wisdom of a business judgment to implement a cost saving device is beyond this court’s
effected as a form of punishment or demotion without sufficient cause. Indeed, having the right determination. After all, the free will of management to conduct its own business affairs to
should not be confused with the manner in which that right is exercised. achieve its purpose cannot be denied.

c. Exercise in good faith Ymbong vs. ABS-CBN, G.R. No. 184885, March 7, 2012, Villarama, J.

Pantoja vs. SCA Hygiene Products, G.R. No. 163554, April 23, 2010, Del Castillo, J. Doctrine. We have consistently held that so long as a company’s management
prerogatives are exercised in good faith for the advancement of the employer’s interest and
Doctrine. Respondent presented evidence of the low volume of sales and orders for not for the purpose of defeating or circumventing the rights of the employees under special
the production of industrial paper in 1999 which inevitably resulted to the company’s decision laws or under valid agreements, this Court will uphold them. In the instant case, ABS-CBN
to streamline its operations. This fact was corroborated by respondent’s VP-Tissue validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to ensure
Manufacturing Director and was not disputed by petitioner. Exercising its management that it maintains its objectivity and credibility and freeing itself from any appearance of
prerogative and sound business judgment, respondent decided to cut down on operational impartiality so that the confidence of the viewing and listening public in it will not be in any way
costs by shutting down one of its paper mill. As held in International Harvester Macleod, Inc. v. eroded. Even as the law is solicitous of the welfare of the employees, it must also protect the
Intermediate Appellate Court, the determination of the need to phase out a particular right of an employer to exercise what are clearly management prerogatives. The free will of
department and consequent reduction of personnel and reorganization as a labor and cost management to conduct its own business affairs to achieve its purpose cannot be denied.
saving device is a recognized management prerogative which the courts will not generally
interfere with. It is worth noting that such exercise of management prerogative has earned a stamp
of approval from no less than our Congress itself when on February 12, 2001, it enacted
In this case, the abolishment of Paper Mill No. 4 was undoubtedly a business Republic Act No. 9006, otherwise known as the "Fair Election Act." Section 6.6 thereof reads:
judgment arrived at in the face of the low demand for the production of industrial paper at the
time. Despite an apparent reason to implement a retrenchment program as a cost-cutting 6.6. Any mass media columnist, commentator, announcer, reporter, on-air
measure, respondent, however, did not outrightly dismiss the workers affected by the closure correspondent or personality who is a candidate for any elective public office or is a
of Paper Mill No. 4 but gave them an option to be transferred to posts of equal rank and pay. campaign volunteer for or employed or retained in any capacity by any candidate or
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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political party shall be deemed resigned, if so required by their employer, or shall take a We also cannot sustain the petitioner’s claim that she was not accorded due process
leave of absence from his/her work as such during the campaign period: Provided, That any and that the respondents acted toward her with discrimination, insensibility, or disdain as to
media practitioner who is an official of a political party or a member of the campaign staff of a force her to forego her continued employment. In addition to verbal reminders from Sarte, the
candidate or political party shall not use his/her time or space to favor any candidate or political petitioner was asked in writing twice to explain within 48 hours her refusal to accept her
party. transfer. In the first, she completely remained silent, and in the second, she took four (4) days
to file a mere one-paragraph reply, wherein she simply said that she saw the Provincial
d. Transfer; Promotion (demotion) Coordinator position as a demotion, hence she could not accept it. Worse, she may even be
said to have committed insubordination when she refused to turn over her responsibilities to
Peckson vs. Robinsons Supermarket, G.R. No. 198534, July 3, 2013, Reyes, J. the new Category Buyer, Padilla, and to assume her new responsibilities as Provincial
Coordinator and report to the Metroeast Depot as directed. This was precisely the reason why
Doctrine. As we all know, there are various laws imposing all kinds of burdens and the petitioner was kept on floating status. To her discredit, her defiance constituted a neglect of
obligations upon the employer in relation to his employees, and yet as a rule this Court has duty, or an act of insubordination, per the LA.
always upheld the employer’s prerogative to regulate all aspects of employment relating to the
employees’ work assignment, the working methods and the place and manner of work. Indeed, Neither can we consider tenable the petitioner’s contention that the respondents
labor laws discourage interference with an employer’s judgment in the conduct of his business. deliberately held her up to mockery and ridicule when they cut off her email access, sent
memoranda to her clients that she was no longer a Category Buyer, and to the various
Under the doctrine of management prerogative, every employer has the inherent right Robinsons branches that she was now a Provincial Coordinator on floating status and that
to regulate, according to his own discretion and judgment, all aspects of employment, including Padilla was taking over her position as the new Category Buyer. It suffices to state that these
hiring, work assignments, working methods, the time, place and manner of work, work measures are the logical steps to take for the petitioner’s unjustified resistance to her transfer,
supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of and were not intended to subject her to public embarrassment.
employees. The only limitations to the exercise of this prerogative are those imposed by labor
laws and the principles of equity and substantial justice. Best Wear Garments vs. De Lemos, G.R. No. 191281, December 5, 2012, Villarama, J.

Concerning the transfer of employees, these are the following jurisprudential Doctrine. Being piece-rate workers assigned to individual sewing machines,
guidelines: (a) a transfer is a movement from one position to another of equivalent rank, level respondents’ earnings depended on the quality and quantity of finished products. That their
or salary without break in the service or a lateral movement from one position to another of work output might have been affected by the change in their specific work assignments does
equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an not necessarily imply that any resulting reduction in pay is tantamount to constructive
employee for legitimate business purposes; (c) a transfer becomes unlawful where it is dismissal. Workers under piece-rate employment have no fixed salaries and their
motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion compensation is computed on the basis of accomplished tasks. As admitted by respondent De
without sufficient cause; (d) the employer must be able to show that the transfer is not Lemos, some garments or by-products took a longer time to finish so they could not earn as
unreasonable, inconvenient, or prejudicial to the employee. much as before. Also,the type of sewing jobs available would depend on the specifications
made by the clients of petitioner company. Under these circumstances, it cannot be said that
In the case at bar, we agree with the appellate court that there is substantial showing the transfer was unreasonable, inconvenient or prejudicial to the respondents. Such
that the transfer of the petitioner from Category Buyer to Provincial Coordinator was not deployment of sewers to work on different types of garments as dictated by present business
unreasonable, inconvenient, or prejudicial to her. The petitioner failed to dispute that the job necessity is within the ambit of management prerogative which, in the absence of bad faith, ill
classifications of Category Buyer and Provincial Coordinator are similar, or that they command motive or discrimination, should not be interfered with by the courts.
a similar salary structure and responsibilities. We agree with the NLRC that the Provincial
Coordinator’s position does not involve mere clerical functions but requires the exercise of The records are bereft of any showing of clear discrimination, insensibility or disdain
discretion from time to time, as well as independent judgment, since the Provincial Coordinator on the part of petitioners in transferring respondents to perform a different type of sewing job. It
gives appropriate recommendations to management and ensures the faithful implementation of is unfair to charge petitioners with constructive dismissal simply because the respondents
policies and programs of the company. It even has influence over a Category Buyer because insist that their transfer to a new work assignment was against their will. We have long stated
of its recommendatory function that enables the Category Buyer to make right decisions on that "the objection to the transfer being grounded on solely upon the personal inconvenience
assortment, price and quantity of the items to be sold by the store. 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." That respondents eventually discontinued reporting for work
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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after their plea to be returned to their former work assignment was their personal decision, for when he could have dismissed him for cause if the allegations were indeed found true. In view
which the petitioners should not be held liable particularly as the latter did not, in fact, dismiss of these, this Court finds no compelling reason to justify the transfer of respondents from chief
them. bakers to utility/security personnel. What appears to this Court is that respondents’ transfer
was an act of retaliation on the part of petitioners due to the former’s filing of complaints
Indeed, there was no evidence that respondents were dismissed from employment. In against them, and thus, was clearly made in bad faith. In fact, petitioner Reyes even admitted
fact, petitioners expressed willingness to accept them back to work. There being no that he caused the reassignments due to the pending complaints filed against him. As the CA
termination of employment by the employer, the award of backwages cannot be sustained. It is aptly held:
well settled that backwages may be granted only when there is a finding of illegal dismissal. In
cases where there is no evidence of dismissal, the remedy is reinstatement but without In the case at bench, respondent Reyes failed to justify petitioners’ transfer from the
backwages. position of chief bakers to utility/security personnel. We find that the threat being alluded to by
respondent Reyes – that the petitioners might introduce harmful foreign substances in baking
The constitutional policy of providing full protection to labor is not intended to oppress bread – is imaginary and not real. We recall that what triggered the petitioners’ reassignment
or destroy management. While the Constitution is committed to the policy of social justice and was the filing of their complaints against private respondents in the NLRC. The petitioners
the protection of the working class, it should not be supposed that every labor dispute will be were not even given an opportunity to refute the reason for the transfer. The drastic change in
automatically decided in favor of labor. Management also has its rights which are entitled to petitioners’ nature of work unquestionably resulted in, as rightly perceived by them, a
respect and enforcement in the interest of simple fair play. Thus, where management demeaning and humiliating work condition. The transfer was a demotion in rank, beyond
prerogative to transfer employees is validly exercised, as in this case, courts will decline to doubt. There is demotion when an employee is transferred from a position of dignity to a
interfere. servile or menial job. One does not need to stretch the imagination to distinguish the work of a
chief baker to that of a security cum utility man.
Julie’s Bakeshop vs. Arnaiz, G.R. No. 173882, February 15, 2012, Del Castillo, J.
"[D]emotion involves a situation in which an employee is relegated to a subordinate or
Doctrine. We have held that management is free to regulate, according to its own less important position constituting a reduction to a lower grade or rank, with a corresponding
discretion and judgment, all aspects of employment, including hiring, work assignments, decrease in duties and responsibilities, and usually accompanied by a decrease in
working methods, time, place and manner of work, processes to be followed, supervision of salary." When there is a demotion in rank and/or a diminution in pay; when a clear
workers, working regulations, transfer of employees, work supervision, lay off of workers and discrimination, insensibility or disdain by an employer becomes unbearable to the employee; or
discipline, dismissal and recall of workers. The exercise of management prerogative, however, when continued employment is rendered impossible, unreasonable or unlikely, the transfer of
is not absolute as it must be exercised in good faith and with due regard to the rights of labor. an employee may constitute constructive dismissal.

In this case, petitioners insist that the transfer of respondents was a measure of self- We agree with the CA in ruling that the transfer of respondents amounted to a
preservation and was prompted by a desire to protect the health of the buying public, claiming demotion. Although there was no diminution in pay, there was undoubtedly a demotion in titular
that respondents should be transferred to a position where they could not sabotage the rank. One cannot deny the disparity between the duties and functions of a chief baker to that of
business pending resolution of their cases. According to petitioners, the possibility that a utility/security personnel tasked to clean and manage the orderliness of the outside premises
respondents might introduce harmful substances to the bread while in the performance of their of the bakeshop. Respondents were even prohibited from entering the bakeshop. The change
duties as chief bakers is not imaginary but real as borne out by what Tolores did in one of the in the nature of their work undeniably resulted to a demeaning and humiliating work condition.
bakeshops in Culasi, Antique where he was assigned as baker.
F. Employment Restriction
This postulation is not well-taken. On the contrary, petitioners failed to satisfy the
burden of proving that the transfer was based on just or valid ground. Petitioners’ bare a. Prohibition against competitive employment
assertions of imminent threat from the respondents are mere accusations which are not
substantiated by any proof. This Court is proscribed from making conclusions based on mere Rivera vs. Solidbank Corporation, G.R. No. 163269, April 19, 2006, Callejo, Sr., J.
presumptions or suppositions. An employee’s fate cannot be justly hinged upon conjectures
and surmises. The act attributed against Tolores does not even convince us as he was merely Doctrine. In cases where an employee assails a contract containing a provision
a suspected culprit in the alleged sabotage for which no investigation took place to establish prohibiting him or her from accepting competitive employment as against public policy, the
his guilt or culpability. Besides, Reyes still retained Tolores as an employee and chief baker employer has to adduce evidence to prove that the restriction is reasonable and not greater
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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than necessary to protect the employer’s legitimate business interests. The restraint may not
be unduly harsh or oppressive in curtailing the employee’s legitimate efforts to earn a We are not impervious of the distinction between restrictive covenants barring an
livelihood and must be reasonable in light of sound public policy. employee to accept a post-employment competitive employment or restraint on trade in
employment contracts and restraints on post-retirement competitive employment in pension
Courts should carefully scrutinize all contracts limiting a man’s natural right to follow and retirement plans either incorporated in employment contracts or in collective bargaining
any trade or profession anywhere he pleases and in any lawful manner. But it is just as agreements between the employer and the union of employees, or separate from said
important to protect the enjoyment of an establishment in trade or profession, which its contracts or collective bargaining agreements which provide that an employee who accepts
employer has built up by his own honest application to every day duty and the faithful post retirement competitive employment will forfeit retirement and other benefits or will be
performance of the tasks which every day imposes upon the ordinary man. What one creates obliged to restitute the same to the employer. The strong weight of authority is that forfeitures
by his own labor is his. Public policy does not intend that another than the producer shall reap for engaging in subsequent competitive employment included in pension and retirement plans
the fruits of labor; rather, it gives to him who labors the right by every legitimate means to are valid even though unrestricted in time or geography. The raison d’etre is explained by the
protect the fruits of his labor and secure the enjoyment of them to himself. Freedom to contract United States Circuit Court of Appeals in Rochester Corporation v. W.L. Rochester, Jr.:
must not be unreasonably abridged. Neither must the right to protect by reasonable restrictions
that which a man by industry, skill and good judgment has built up, be denied. x x x The authorities, though, generally draw a clear and obvious distinction between
restraints on competitive employment in employment contracts and in pension plans. The
The Court reiterates that the determination of reasonableness is made on the strong weight of authority holds that forfeitures for engaging in subsequent competitive
particular facts and circumstances of each case. In Esmerson Electric Co. v. Rogers, it was employment, included in pension retirement plans, are valid, even though unrestricted in time
held that the question of reasonableness of a restraint requires a thorough consideration of or geography. The reasoning behind this conclusion is that the forfeiture, unlike the restraint
surrounding circumstances, including the subject matter of the contract, the purpose to be included in the employment contract, is not a prohibition on the employee’s engaging in
served, the determination of the parties, the extent of the restraint and the specialization of the competitive work but is merely a denial of the right to participate in the retirement plan if he
business of the employer. The court has to consider whether its enforcement will be injurious does so engage. A leading case on this point is Van Pelt v. Berefco, Inc., where, in passing on
to the public or cause undue hardships to the employee, and whether the restraint imposed is a forfeiture provision similar to that here, the Court said:
greater than necessary to protect the employer. Thus, the court must have before it evidence
relating to the legitimate interests of the employer which might be protected in terms of time, "A restriction in the contract which does not preclude the employee from engaging in
space and the types of activity proscribed. competitive activity, but simply provides for the loss of rights or privileges if he does so is not in
restraint of trade."
Consideration must be given to the employee’s right to earn a living and to his ability
to determine with certainty the area within which his employment ban is restituted. A provision A post-retirement competitive employment restriction is designed to protect the
on territorial limitation is necessary to guide an employee of what constitutes as violation of a employer against competition by former employees who may retire and obtain retirement or
restrictive covenant and whether the geographic scope is co-extensive with that in which the pension benefits and, at the same time, engage in competitive employment.
employer is doing business. In considering a territorial restriction, the facts and circumstances
surrounding the case must be considered. We have reviewed the Undertaking which respondent impelled petitioner to sign, and
find that in case of failure to comply with the promise not to accept competitive employment
Thus, in determining whether the contract is reasonable or not, the trial court should within one year from February 28, 1995, respondent will have a cause of action against
consider the following factors: (a) whether the covenant protects a legitimate business interest petitioner for "protection in the courts of law." The words "cause of action for protection in the
of the employer; (b) whether the covenant creates an undue burden on the employee; (c) courts of law" are so broad and comprehensive, that they may also include a cause of action
whether the covenant is injurious to the public welfare; (d) whether the time and territorial for prohibitory and mandatory injunction against petitioner, specific performance plus damages,
limitations contained in the covenant are reasonable; and (e) whether the restraint is or a damage suit (for actual, moral and/or exemplary damages), all inclusive of the restitution
reasonable from the standpoint of public policy. of the P963,619.28 which petitioner received from respondent. The Undertaking and the
Release, Waiver and Quitclaim do not provide for the automatic forfeiture of the benefits
Not to be ignored is the fact that the banking business is so impressed with public petitioner received under the SRP upon his breach of said deeds. Thus, the post-retirement
interest where the trust and interest of the public in general is of paramount importance such competitive employment ban incorporated in the Undertaking of respondent does not, on its
that the appropriate standard of diligence must be very high, if not the highest degree of face, appear to be of the same class or genre as that contemplated in Rochester.
diligence.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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b. Prohibition on employment of relatives 1. The phrase "immediate member of the family of an employee" shall refer to the
employee’s legitimate children and in default thereof to the employee’s collateral relatives
i. Based on contract within the third civil degree.

United Kimberly-Clark Employees Union vs. Kimberly-Clark Philippines, G.R. No. 2. A resigned/retired employee may be allowed to recommend a collateral relative
162957, March 6, 2006, Callejo, Sr., J. within the third civil degree (e.g., brother, sister, nephew or niece) as his/her replacement only
in the following cases:
Doctrine. A CBA is more than a contract; it is a generalized code to govern a myriad
of cases which the draftsmen cannot wholly anticipate. It covers the whole employment a. Where the retired/resigned employee is single or if married has no
relationship and prescribes the rights and duties of the parties. It is a system of industrial self- legitimate children.
government with the grievance machinery at the very heart of the system. The parties solve
their problems by molding a system of private law for all the problems which may arise and to b. Where the retired/resigned employee’s children are still minors (below 18
provide for their solution in a way which will generally accord with the variant needs and years old) at the time of his/her separation from the company. (Emphasis added)
desires of the parties.
E. General Provisions
If the terms of a CBA are clear and have no doubt upon the intention of the
contracting parties, the literal meaning of its stipulation shall prevail. However, if, in a CBA, the 1. The privilege to recommend a replacement can be exercised by the employee
parties stipulate that the hirees must be presumed of employment qualification standards but concerned only once. Thus, in the following cases, a recommendee who has been hired on
fail to state such qualification standards in said CBA, the VA may resort to evidence extrinsic of probationary status can no longer be substituted with another recommendee.
the CBA to determine the full agreement intended by the parties. When a CBA may be
expected to speak on a matter, but does not, its sentence imports ambiguity on that subject. a. where the recommendee fails to pass in his performance evaluation.
The VA is not merely to rely on the cold and cryptic words on the face of the CBA but is
mandated to discover the intention of the parties. Recognizing the inability of the parties to b. where the recommendee resigns without completing his probationary
anticipate or address all future problems, gaps may be left to be filled in by reference to the period.
practices of the industry, and the step which is equally a part of the CBA although not
expressed in it. In order to ascertain the intention of the contracting parties, their c. where the recommendee is dismissed for cause.
contemporaneous and subsequent acts shall be principally considered. The VA may also
consider and rely upon negotiating and contractual history of the parties, evidence of past d. where the recommendee dies during his probationary period.
practices interpreting ambiguous provisions. The VA has to examine such practices to
determine the scope of their agreement, as where the provision of the CBA has been loosely Respondent issued said Guidelines in light of the ruling of this Court in Kimberly Clark
formulated. Moreover, the CBA must be construed liberally rather than narrowly and technically Philippines v. Lorredo. Respondent saw it imperative to do away with its practice of
and the Court must place a practical and realistic construction upon it. accommodating recommendees who were mere high school graduates, and to require higher
employment standards for them.
In the present case, the parties are in agreement that, on its face, Article XX, Section
1 of their 1997 CBA does not contain any provision relative to the employment qualification By agreement of the parties, the implementation of the Guidelines was deferred until
standards of recommendees of retired/resigned, deceased or disabled employees of January 1, 1997, unless revoked or amended by the 1997 CBA. Petitioner proposed that the
respondent who are members of petitioner. However, in determining the employment practice of hiring recommendees of retired/resigned, deceased or disabled employees who
qualification standards for said recommendees, the VA should have relied on the November 7, were union members, who were at least high school graduates, be included in their CBA, but
1995 Guidelines issued by respondent, which reads: respondent did not agree. Hence, Article XX, Section 1 of the 1997 CBA of the parties
remained intact. There was thus no more legal bar for respondent to implement the November
D. Definition of the phrase "immediate member of the family of an employee" 7, 1995 Guidelines. By executing the 1997 CBA, in its present form, petitioner is bound by the
terms and conditions therein set forth.
Reviewer in Labor Law
(Patterned in the Course Outline of Atty. Charisma I. Nolasco)
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The VA, however, ignored the plain language of the 1997 CBA of the parties, as well an employment policy is discriminatory on its face. No-spouse employment policies requiring
as the Guidelines issued by respondent. He capriciously based his resolution on the an employee of a particular sex to either quit, transfer, or be fired are facially discriminatory.
respondent’s practice of hiring which, however, by agreement of petitioner and respondent, For example, an employment policy prohibiting the employer from hiring wives of male
was discontinued. employees, but not husbands of female employees, is discriminatory on its face.

The Court has recognized in numerous instances the undoubted right of the employer On the other hand, to establish disparate impact, the complainants must prove that
to regulate, according to his own discretion and best judgment, all aspects of employment, a facially neutral policy has a disproportionate effect on a particular class. For example,
including but not limited to, work assignments and supervision, working methods and although most employment policies do not expressly indicate which spouse will be required to
regulations, time, place and manner of work, processes to be followed, and hiring, supervision, transfer or leave the company, the policy often disproportionately affects one sex.
transfer, discipline, lay off, dismissal and recall of workers. Encompassing though it could be,
the exercise of this right is not absolute. Management prerogative must be exercised in good The state courts’ rulings on the issue depend on their interpretation of the scope of
faith for the advancement of the employer’s interest and not for the purpose of defeating or marital status discrimination within the meaning of their respective civil rights acts. Though
circumventing the rights of the employees under special laws, valid agreements such as the they agree that the term "marital status" encompasses discrimination based on a person's
individual contract of employment and the collective bargaining agreement, and general status as either married, single, divorced, or widowed, they are divided on whether the term
principles of justice and fair play. In this case, the Court finds that respondent acted in accord has a broader meaning. Thus, their decisions vary.
with the CBA and the November 7, 1995 Guidelines, which, by agreement of the parties, may
be implemented by respondent after January 1, 1997. The courts narrowly interpreting marital status to refer only to a person's status as
married, single, divorced, or widowed reason that if the legislature intended a broader
ii. Bonafide occupational qualification exception definition it would have either chosen different language or specified its intent. They hold that
the relevant inquiry is if one is married rather than to whom one is married. They construe
Star Paper Corporation vs. Simbol, G.R. No. 164774, April 12, 2006, Puno, J. marital status discrimination to include only whether a person is single, married, divorced, or
widowed and not the "identity, occupation, and place of employment of one's spouse." These
Doctrine. It is true that the policy of petitioners prohibiting close relatives from courts have upheld the questioned policies and ruled that they did not violate the marital status
working in the same company takes the nature of an anti-nepotism employment policy. discrimination provision of their respective state statutes.
Companies adopt these policies to prevent the hiring of unqualified persons based on their
status as a relative, rather than upon their ability. These policies focus upon the potential The courts that have broadly construed the term "marital status" rule that it
employment problems arising from the perception of favoritism exhibited towards relatives. encompassed the identity, occupation and employment of one's spouse. They strike down the
no-spouse employment policies based on the broad legislative intent of the state statute. They
With more women entering the workforce, employers are also enacting employment reason that the no-spouse employment policy violate the marital status provision because it
policies specifically prohibiting spouses from working for the same company. We note that two arbitrarily discriminates against all spouses of present employees without regard to the actual
types of employment policies involve spouses: policies banning only spouses from working in effect on the individual's qualifications or work performance. These courts also find the no-
the same company (no-spouse employment policies), and those banning all immediate spouse employment policy invalid for failure of the employer to present any evidence
family members, including spouses, from working in the same company (anti-nepotism of business necessity other than the general perception that spouses in the same workplace
employment policies). might adversely affect the business. They hold that the absence of such a bona fide
occupational qualification invalidates a rule denying employment to one spouse due to the
current employment of the other spouse in the same office. Thus, they rule that unless the
Unlike in our jurisdiction where there is no express prohibition on marital employer can prove that the reasonable demands of the business require a distinction based
discrimination, there are twenty state statutes in the United States prohibiting marital on marital status and there is no better available or acceptable policy which would better
discrimination. Some state courts have been confronted with the issue of whether no-spouse accomplish the business purpose, an employer may not discriminate against an employee
policies violate their laws prohibiting both marital status and sex discrimination. based on the identity of the employee’s spouse. This is known as the bona fide occupational
qualification exception.
In challenging the anti-nepotism employment policies in the United States,
complainants utilize two theories of employment discrimination: the disparate treatment and We note that since the finding of a bona fide occupational qualification justifies an
the disparate impact. Under the disparate treatment analysis, the plaintiff must prove that employer’s no-spouse rule, the exception is interpreted strictly and narrowly by these state
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courts. There must be a compelling business necessity for which no alternative exists other lame. That the second paragraph was meant to give teeth to the first paragraph of the
than the discriminatory practice. To justify a bona fide occupational qualification, the employer questioned rule is evidently not the valid reasonable business necessity required by the law.
must prove two factors: (1) that the employment qualification is reasonably related to the
essential operation of the job involved; and, (2) that there is a factual basis for believing that all It is significant to note that in the case at bar, respondents were hired after they were
or substantially all persons meeting the qualification would be unable to properly perform the found fit for the job, but were asked to resign when they married a co-employee. Petitioners
duties of the job. failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit,
then an employee of the Repacking Section, could be detrimental to its business operations.
The concept of a bona fide occupational qualification is not foreign in our jurisdiction. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia,
We employ the standard of reasonableness of the company policy which is parallel to the then a Production Helper in the Selecting Department, who married Howard Comia, then a
bona fide occupational qualification requirement. In the recent case of Duncan Association of helper in the cutter-machine. The policy is premised on the mere fear that employees married
Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., we passed on to each other will be less efficient. If we uphold the questioned rule without valid justification,
the validity of the policy of a pharmaceutical company prohibiting its employees from marrying the employer can create policies based on an unproven presumption of a perceived danger at
employees of any competitor company. We held that Glaxo has a right to guard its trade the expense of an employee’s right to security of tenure.
secrets, manufacturing formulas, marketing strategies and other confidential programs and
information from competitors. We considered the prohibition against personal or marital Petitioners contend that their policy will apply only when one employee marries a co-
relationships with employees of competitor companies upon Glaxo’s employee, but they are free to marry persons other than co-employees. The questioned policy
employees reasonable under the circumstances because relationships of that nature might may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect
compromise the interests of Glaxo. In laying down the assailed company policy, we recognized and under the disparate impact theory, the only way it could pass judicial scrutiny is a showing
that Glaxo only aims to protect its interests against the possibility that a competitor company that it is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of
will gain access to its secrets and procedures. petitioners to prove a legitimate business concern in imposing the questioned policy cannot
prejudice the employee’s right to be free from arbitrary discrimination based upon stereotypes
The requirement that a company policy must be reasonable under the circumstances of married persons working together in one company.
to qualify as a valid exercise of management prerogative was also at issue in the 1997 case
of Philippine Telegraph and Telephone Company v. NLRC. In said case, the employee was Lastly, the absence of a statute expressly prohibiting marital discrimination in our
dismissed in violation of petitioner’s policy of disqualifying from work any woman worker who jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast
contracts marriage. We held that the company policy violates the right against discrimination and extensive that we cannot prudently draw inferences from the legislature’s silence that
afforded all women workers under Article 136 of the Labor Code, but established a permissible married persons are not protected under our Constitution and declare valid a policy based on a
exception, viz.: prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a
reasonable business necessity, we rule that the questioned policy is an invalid exercise of
[A] requirement that a woman employee must remain unmarried could be justified as management prerogative. Corollarily, the issue as to whether respondents Simbol and Comia
a "bona fide occupational qualification," or BFOQ, where the particular requirements of the resigned voluntarily has become moot and academic.
job would justify the same, but not on the ground of a general principle, such as the desirability
of spreading work in the workplace. A requirement of that nature would be valid provided it As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on the
reflects an inherent quality reasonably necessary for satisfactory job performance. singular fact that her resignation letter was written in her own handwriting. Both ruled that her
resignation was voluntary and thus valid. The respondent court failed to categorically rule
The cases of Duncan and PT&T instruct us that the requirement of reasonableness whether Estrella voluntarily resigned but ordered that she be reinstated along with Simbol and
must be clearly established to uphold the questioned employment policy. The employer has Comia.
the burden to prove the existence of a reasonable business necessity. The burden was
successfully discharged in Duncan but not in PT&T. Estrella claims that she was pressured to submit a resignation letter because she was
in dire need of money. We examined the records of the case and find Estrella’s contention to
We do not find a reasonable business necessity in the case at bar. be more in accord with the evidence. While findings of fact by administrative tribunals like the
NLRC are generally given not only respect but, at times, finality, this rule admits of
Petitioners’ sole contention that "the company did not just want to have two (2) or exceptions, as in the case at bar.
more of its employees related between the third degree by affinity and/or consanguinity" is
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PILTEL vs. NLRC, G.R. No. 118978, May 23, 1997, Regalado, J. policy of Philippine Air Lines requiring that prospective flight attendants must be single and that
they will be automatically separated from the service once they marry was declared void, it
FACTS: Grace De Guzman was hired by PILTEL several times as reliever. Subsequently, being violative of the clear mandate in Article 136 of the Labor Code with regard to
she was once more asked to join PILTEL as a probationary employee. In the job application discrimination against married women. Thus:
form that was furnished her to be filled up for the purpose, she indicated in the portion for civil
status therein that she was single although she had contracted marriage a few months earlier, “Of first impression is the incompatibility of the respondent's policy or regulation with
that is, on May 26, 1991. It was shown that De Guzman had made the same representation in the codal provision of law. Respondent is resolute in its contention that Article 136 of the Labor
the two successive reliever agreements. Hence, PILTEL’s branch supervisor Oficial sent to her Code applies only to women employed in ordinary occupations and that the prohibition against
a memorandum requiring her to explain the discrepancy and was reminded about the marriage of women engaged in extraordinary occupations, like flight attendants, is fair and
company's policy of not accepting married women for employment. reasonable, considering the pecularities of their chosen profession.

ISSUE: Whether or not PILTEL’s policy of not accepting married women is valid. We cannot subscribe to the line of reasoning pursued by respondent. All along, it
knew that the controverted policy has already met its doom as early as March 13, 1973 when
HELD: No. In the case at bar, petitioner's policy of not accepting or considering as Presidential Decree No. 148, otherwise known as the Women and Child Labor Law, was
disqualified from work any woman worker who contracts marriage runs afoul of the test of, and promulgated. But for the timidity of those affected or their labor unions in challenging the
the right against, discrimination, afforded all women workers by our labor laws and by no less validity of the policy, the same was able to obtain a momentary reprieve. A close look at
than the Constitution. Contrary to petitioner's assertion that it dismissed private respondent Section 8 of said decree, which amended paragraph (c) of Section 12 of Republic Act No. 679,
from employment on account of her dishonesty, the record discloses clearly that her ties with reveals that it is exactly the same provision reproduced verbatim in Article 136 of the Labor
the company were dissolved principally because of the company's policy that married women Code, which was promulgated on May 1, 1974 to take effect six (6) months later, or on
are not qualified for employment in PT & T, and not merely because of her supposed acts of November 1, 1974.
dishonesty.
It cannot be gainsaid that, with the reiteration of the same provision in the new Labor
This Court should be spared the ennui of strained reasoning and the tedium of Code, all policies and acts against it are deemed illegal and therefore abrogated. True, Article
propositions which confuse through less than candid arguments. Indeed, petitioner glosses 132 enjoins the Secretary of Labor to establish standards that will ensure the safety and health
over the fact that it was its unlawful policy against married women, both on the aspects of of women employees and in appropriate cases shall by regulation require employers to
qualification and retention, which compelled private respondent to conceal her supervening determine appropriate minimum standards for termination in special occupations, such as
marriage. It was, however, that very policy alone which was the cause of private respondent's those of flight attendants, but that is precisely the factor that militates against the policy of
secretive conduct now complained of. It is then apropos to recall the familiar saying that he respondent. The standards have not yet been established as set forth in the first paragraph,
who is the cause of the cause is the cause of the evil caused. nor has the Secretary of Labor issued any regulation affecting flight attendants.

As an employee who had therefore gained regular status, and as she had been It is logical to presume that, in the absence of said standards or regulations which are
dismissed without just cause, she is entitled to reinstatement without loss of seniority rights as yet to be established, the policy of respondent against marriage is patently illegal. This finds
and other privileges and to full back wages, inclusive of allowances and other benefits or their support in Section 9 of the New Constitution.
monetary equivalent. However, as she had undeniably committed an act of dishonesty in
concealing her status, albeit under the compulsion of an unlawful imposition of petitioner, the Moreover, we cannot agree to the respondent's proposition that termination from
three-month suspension imposed by respondent NLRC must be upheld to obviate the employment of flight attendants on account of marriage is a fair and reasonable standard
impression or inference that such act should be condoned. It would be unfair to the employer if designed for their own health, safety, protection and welfare, as no basis has been laid
she were to return to its fold without any sanction whatsoever for her act which was not totally therefor. Actually, respondent claims that its concern is not so much against the continued
justified. Thus, her entitlement to back wages, which shall be computed from the time her employment of the flight attendant merely by reason of marriage as observed by the Secretary
compensation was withheld up to the time of her actual reinstatement, shall be reduced by of Labor, but rather on the consequence of marriage-pregnancy. Respondent discussed at
deducting therefrom the amount corresponding to her three months suspension. length in the instant appeal the supposed ill effects of pregnancy on flight attendants in the
course of their employment. We feel that this needs no further discussion as it had been
It would be worthwhile to reflect upon and adopt here the rationalization in Zialcita, et adequately explained by the Secretary of Labor in his decision of May 2, 1976.
al. vs. Philippine Air Lines, a decision that emanated from the Office of the President. There, a
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In a vain attempt to give meaning to its position, respondent went as far as invoking Title VII of the United States Civil Rights Act of 1964, the main federal statute prohibiting job
the provisions of Articles 52 and 216 of the New Civil Code on the preservation of marriage as discrimination against employees and applicants on the basis of, among other things, sex.
an inviolable social institution and the family as a basic social institution, respectively, as bases
for its policy of non-marriage. In both instances, respondent predicates absence of a flight Further, it is not relevant that the rule is not directed against all women but just
attendant from her home for long periods of time as contributory to an unhappy married life. against married women. And, where the employer discriminates against married women, but
This is pure conjecture not based on actual conditions, considering that, in this modern world, not against married men, the variable is sex and the discrimination is unlawful. Upon the other
sophisticated technology has narrowed the distance from one place to another. Moreover, hand, a requirement that a woman employee must remain unmarried could be justified as a
respondent overlooked the fact that married flight attendants can program their lives to adapt "bona fide occupational qualification," or BFOQ, where the particular requirements of the job
to prevailing circumstances and events. would justify the same, but not on the ground of a general principle, such as the desirability of
spreading work in the workplace. A requirement of that nature would be valid provided it
Article 136 is not intended to apply only to women employed in ordinary occupations, reflects an inherent quality reasonably necessary for satisfactory job performance. Thus, in
or it should have categorically expressed so. The sweeping intendment of the law, be it on one case, a no-marriage rule applicable to both male and female flight attendants, was
special or ordinary occupations, is reflected in the whole text and supported by Article 135 that regarded as unlawful since the restriction was not related to the job performance of the flight
speaks of non-discrimination on the employment of women.” attendants.

The judgment of the Court of Appeals in Gualberto, et al. vs. Marinduque Mining & Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor
Industrial Corporation considered as void a policy of the same nature. In said case, Code on the right of a woman to be free from any kind of stipulation against marriage in
respondent, in dismissing from the service the complainant, invoked a policy of the firm to connection with her employment, but it likewise assaults good morals and public policy,
consider female employees in the project it was undertaking as separated the moment they get tending as it does to deprive a woman of the freedom to choose her status, a privilege that by
married due to lack of facilities for married women. Respondent further claimed that all accounts inheres in the individual as an intangible and inalienable right. Hence, while it is
complainant was employed in the project with an oral understanding that her services would be true that the parties to a contract may establish any agreements, terms, and conditions that
terminated when she gets married. Branding the policy of the employer as an example of they may deem convenient, the same should not be contrary to law, morals, good customs,
"discriminatory chauvinism" tantamount to denying equal employment opportunities to women public order, or public policy. Carried to its logical consequences, it may even be said that
simply on account of their sex, the appellate court struck down said employer policy as petitioner's policy against legitimate marital bonds would encourage illicit or common-law
unlawful in view of its repugnance to the Civil Code, Presidential Decree No. 148 and the relations and subvert the sacrament of marriage.
Constitution.
Parenthetically, the Civil Code provisions on the contract of labor state that the
Under American jurisprudence, job requirements which establish employer preference relations between the parties, that is, of capital and labor, are not merely contractual,
or conditions relating to the marital status of an employee are categorized as a "sex-plus" impressed as they are with so much public interest that the same should yield to the common
discrimination where it is imposed on one sex and not on the other. Further, the same should good. It goes on to intone that neither capital nor labor should visit acts of oppression against
be evenly applied and must not inflict adverse effects on a racial or sexual group which is the other, nor impair the interest or convenience of the public. In the final reckoning, the danger
protected by federal job discrimination laws. Employment rules that forbid or restrict the of just such a policy against marriage followed by petitioner PT & T is that it
employment of married women, but do not apply to married men, have been held to violate
strikes
 at the very essence, ideals and and enforce such a policy to protect its much more than the monthly salary of SR against his will—since he was told on July
purpose of marriage as an inviolable social right to reasonable returns on investments 3,190.00 (USD 850.00)—although 10, 1994 to leave Riyadh on July 12, 1994.
institution and, ultimately, of the family as and to expansion and growth. Indeed, possibly less than the estimated Gran's He had no other choice but to sign the
the foundation of the nation. That it must while our laws endeavor to give life to the salaries for the remaining duration of his Declaration as he needed the amount of
be effectively interdicted here in all its constitutional policy on social justice and contract and other benefits as employee of SR 2,948.00 for the payment of his ticket.
indirect, disguised or dissembled forms as the protection of labor, it does not mean OAB. A quitclaim will understandably be He could have entertained some
discriminatory conduct derogatory of the that every labor dispute will be decided in lower than the sum total of the amounts apprehensions as to the status of his stay
laws of the land is not only in order but favor of the workers. The law also and benefits that can possibly be awarded or safety in Saudi Arabia if he would not
imperatively required. recognizes that management has rights to employees or to be earned for the sign the quitclaim.
which are also entitled to respect and remainder of the contract period since it is
c. Prohibition on enforcement in the interest of fair play. a compromise where the employees will 4. The court a quo is correct in its
marrying employees of competitor have to forfeit a certain portion of the finding that the Declaration is a contract of
G. Quitclaims and amounts they are claiming in exchange for adhesion which should be construed
Duncan Association of Detailman- Compromise Agreements the early payment of a compromise against the employer, OAB. An adhesion
PTGWO vs. Glaxo Wellcome, G.R. No. amount. The court may however step in contract is contrary to public policy as it
162994, September 17, 2004, Tinga, J. a. Contents of a valid when such amount is unconscionably low leaves the weaker party—the employee—
(*This case was asked in the 2016 Jurist quitclaim/waiver (2016 Bar) or unreasonable although the employee in a "take-it-or-leave-it" situation. Certainly,
Mock Bar Examination) voluntarily agreed to it. In the case of the the employer is being unjust to the
EDI-Staffbuilders vs. NLRC, G.R. No. Declaration, the amount is unreasonably employee as there is no meaningful choice
ISSUE: Is the policy of the company 145587, October 26, 2007, Velasco, Jr., small compared to the future wages of on the part of the employee while the
prohibiting its employees to marry J. Gran. terms are unreasonably favorable to the
competitor’s employees valid? employer.
Doctrine. Is the waiver and 3. The factual circumstances
HELD: Glaxo has a right to guard its trade quitclaim labeled a Declaration valid? It is surrounding the execution of the Thus, the Declaration purporting
secrets, manufacturing formulas, not. Declaration would show that Gran did not to be a quitclaim and waiver is
marketing strategies and other confidential voluntarily and freely execute the unenforceable under Philippine laws in the
programs and information from The Court finds the waiver and document. Consider the following absence of proof of the applicable law of
competitors, especially so that it and Astra quitclaim null and void for the following chronology of events: Saudi Arabia.
are rival companies in the highly reasons: In order to prevent disputes on
competitive pharmaceutical industry. a. On July 9, 1994, Gran received the validity and enforceability of quitclaims
1. The salary paid to Gran upon a copy of his letter of termination; and waivers of employees under
The prohibition against personal his termination, in the amount of SR b. On July 10, 1994, Gran was Philippine laws, said agreements should
or marital relationships with employees of 2,948.00, is unreasonably low. As correctly instructed to depart Saudi Arabia contain the following (2016 Bar):
competitor companies upon Glaxo’s pointed out by the court a quo, the and required to pay his plane
employees is reasonable under the payment of SR 2,948.00 is even lower ticket; 1. A fixed amount as full and final
circumstances because relationships of than his monthly salary of SR 3,190.00 c. On July 11, 1994, he signed compromise settlement;
that nature might compromise the interests (USD 850.00). In addition, it is also very the Declaration; 2. The benefits of the employees if
of the company. In laying down the much less than the USD 16,150.00 which d. On July 12, 1994, Gran possible with the corresponding amounts,
assailed company policy, Glaxo only aims is the amount Gran is legally entitled to get departed from Riyadh, Saudi which the employees are giving up in
to protect its interests against the from petitioner EDI as backwages. Arabia; and consideration of the fixed compromise
possibility that a competitor company will e. On July 21, 1994, Gran filed amount;
gain access to its secrets and procedures. 2. The Declaration reveals that the Complaint before the NLRC. 3. A statement that the employer has
the payment of SR 2,948.00 is actually the clearly explained to the employee in
That Glaxo possesses the right to payment for Gran's salary for the services The foregoing events readily English, Filipino, or in the dialect known to
protect its economic interests cannot be he rendered to OAB as Computer reveal that Gran was "forced" to sign the the employees—that by signing the waiver
denied. No less than the Constitution Specialist. If the Declaration is a quitclaim, Declaration and constrained to receive the or quitclaim, they are forfeiting or
recognizes the right of enterprises to adopt then the consideration should be much amount of SR 2,948.00 even if it was relinquishing their right to receive the
benefits which are due them under the absence of proof of the laws of the foreign manager, he occupied a highly responsible With the quitclaim having been
law; and country agreed upon to govern said position in the company.It would be freely and voluntarily signed, RMN was
4. A statement that the employees signed contracts. Otherwise, the foreign laws implausible to hold, therefore, that he released and absolved from any liability in
and executed the document voluntarily, shall apply could be easily duped into simply signing favor of Michael. Suffice it to say that the
and had fully understood the contents of away his rights. Besides, the language quitclaim is ineffective in barring recovery
the document and that their consent was b. Valid and binding and content ofthe quitclaim were clear and of the full measure of an employee's rights
freely given without any threat, violence, agreement uncomplicated such that he could not only when the transaction is shown to be
duress, intimidation, or undue influence claim that he did not understand what he questionable and the consideration is
exerted on their person. Radio Mindanao Network vs. Amurao was signing. scandalously low and inequitable. Such is
III, G.R. No. 167225, October 22, 2014, not true here.
It is advisable that the stipulations Bersamin, J.
be made in English and Tagalog or in Secondly, the settlement pay c. Quitclaims
the dialect known to the employee. of P311,922.00 was credible and generally frowned upon
Doctrine: Not all quitclaims are
There should be two (2) witnesses to the reasonable considering that Michael did
per sein valid or against public policy. A
execution of the quitclaim who must also not even assail such amount as Zuellig Pharma Corp. vs. Sibal, G.R. No.
quitclaim is invalid or contrary to public
sign the quitclaim. The document should unconscionably low, or even state that he 173587, July 15, 2013, Del Castillo, J.
policy only: (1) where there is clear proof
be subscribed and sworn to under oath was entitled to a higher amount.
that the waiver was wrangled from an
preferably before any administering official Doctrine: It is true that
unsuspecting or gullible person; or (2)
of the Department of Labor and quitclaims executed by employees are
where the terms of settlement are
Employment or its regional office, the Thirdly, that he was required to often frowned upon as contrary to public
unconscionable on their face. In instances
Bureau of Labor Relations, the NLRC or a sign the quitclaim as a condition to the policy. But that is not to say that all waivers
of invalid quitclaims, the law steps in to
labor attaché in a foreign country. Such release of the settlement pay did not prove and quitclaims are invalid as against public
annul the questionable waiver. Indeed,
official shall assist the parties regarding that its execution was coerced. Having policy. Quitclaims will be upheld as valid if
there are legitimate waivers that represent
the execution of the quitclaim and agreed to part with a substantial amount of the following requisites are present (2016
the voluntary and reasonable settlements
waiver. This compromise settlement money, RMN took steps to protect its Bar): "(1) the employee executes a deed
of laborers’ claims that should be
becomes final and binding under Article interest and obtain its release from all of quitclaim voluntarily; (2) there is no
respected by the Court as the law between
227 of the Labor Code which provides obligations once it paid Michael his fraud or deceit on the part of any of the
the parties. Where the party has
that: settlement pay, which it did in this case. parties; (3) the consideration of the
voluntarily made the waiver, with a full
quitclaim is credible and reasonable; and,
understanding of its terms as well as its
[A]ny compromise settlement (4) the contract is not contrary to law,
consequences, and the consideration for And, lastly, that he signed the
voluntarily agreed upon with the public order, public policy, morals or good
the quitclaimis credible and reasonable, quitclaim out of fear of not being able to
assistance of the Bureau of Labor customs or prejudicial to a third person
the transaction must be recognized as a provide for the needs of his family and for
Relations or the regional office of with a right recognized by law."
valid and binding undertaking, and may the schooling of his children did not
the DOLE, shall be final and
not later be disowned simply because of a immediately indicate that he had been
binding upon the parties and the In this case, there is no showing
change of mind. A waiver is essentially forced to sign the same. Dire necessity
NLRC or any court "shall not that Zuellig coerced or forced respondents
contractual. should not necessarily be an acceptable
assume jurisdiction over issues to sign the Release and Quitclaim. In fact,
involved therein except in case of ground for annulling the quitclaim, there is no allegation that Zuellig
non-compliance thereof or if there especially because it was not at all shown employed fraud or deceit in making
In our view, the requisites for the
is prima facie evidence that the that he had been forced to execute it. Nor respondents sign the Release and
validity of Michael’s quitclaim were
settlement was obtained through was it even proven that the consideration Quitclaim. On the other hand, respondents
satisfied. We explain.
fraud, misrepresentation, or for the quitclaim was unconscionably low, declared that they had received the
coercion. Firstly, Michael acknowledged in and that he had been tricked into separation pay in full settlement of all
his quitclaim that he had read and accepting the consideration. claims arising from their employment with
It is made clear that the foregoing thoroughly understood the terms of his Zuellig. For which reason, they have
rules on quitclaim or waiver shall apply quitclaim and signed it of his own volition. remised, released and discharged Zuellig.
only to labor contracts of OFWs in the Being a radio broadcaster and production
Notably, the Release and Quitclaim We find the requisites for the attendant in this case. The records show renders the questioned decision final and
represents a reasonable and fair validity of the respondents’ quitclaim that the respondents, along with their other executory and deprives the appellate court
settlement of respondents’ claims. Under present in this case. We base this fellow seafarers, served as each other’s of jurisdiction to alter the final judgment,
Article 283 of the Labor Code, the conclusion on the following observations: witnesses when they agreed and signed much less to entertain the appeal. The
employers are required to pay employees their respective waivers and quitclaims. underlying purpose of this principle is to
separated from employment by reason of First, the respondents prevent needless delay, a circumstance
redundancy at least one (1) month pay or acknowledged in their various pleadings, Sixth, the respondents’ voluntary which would allow the employer to wear
at least one (1) month pay for every year as well as in the very document and knowing conformity to the settlement out the efforts and meager resources of
of service, whichever is higher. Here, denominated as "waiver and quitclaim," pay was proved not only by the waiver and the worker to the point that the latter is
respondents received 100% of their one that they voluntarily signed the document quitclaim, but by the letters of acceptance constrained to settle for less than what is
(1) month basic pay for every year of after receiving the agreed settlement pay. and the vouchers evidencing payment. due him. This Court has declared that
service, plus a premium ranging from 20% With these documents on record, the although the NLRC is not bound by the
to 85% of such basic pay for every year of Second, the settlement pay is burden shifts to the respondents to prove technical rules of procedure and is allowed
service (depending on the number of reasonable under the circumstances, coercion and undue influence other than to be liberal in the interpretation of the
years in service), as separation pay. In especially when contrasted with the through their bare self-serving claims. No rules in deciding labor cases, such
Goodrich Manufacturing Corporation, v. amounts to which they were respectively such evidence appeared on record at any liberality should not be applied where it
Ativo, this Court declared that – entitled to receive as termination pay stage of the proceedings. would render futile the very purpose for
pursuant to Section 23 of the POEA-SEC which the principle of liberality is adopted.
It is only where there is clear and Article 283 of the Labor Code. In these lights and in the absence The liberal interpretation stems from the
proof that the waiver was wangled from an of any evidence showing that fraud, mandate that the workingman’s welfare
unsuspecting or gullible person, or the Third, the contents of the waiver deception or misrepresentation attended should be the primordial and paramount
terms of settlement are unconscionable on and quitclaim are clear, unequivocal and the execution of the waiver and quitclaim, consideration. We see no reason in this
its face, that the law will step in to annul uncomplicated so that the respondents we are sufficiently convinced that a valid case to waive the rules on the perfection
the questionable transaction. But where it could fully understand the import of what transaction took place. Consequently, we of appeal.
is shown that the person making the they were signing and of its find that the CA erroneously imputed grave
waiver did so voluntarily, with full consequences. Nothing in the records abuse of discretion in misreading the The Court is aware that the
understanding of what he was doing, and shows that what they received was submitted evidence, and in relying on the NLRC is not bound by the technical rules
the consideration for the quitclaim is different from what they signed for. May 25, 2005 agreement and on Section of procedure and is allowed to be liberal in
credible and reasonable, the transaction Fourth, the respondents are 10 of R.A. No. 8042 the interpretation of rules in deciding labor
must be recognized as a valid and binding mature and intelligent individuals, with cases. However, such liberality should not
undertaking. college degrees, and are far from the II. THE LABOR CODE OF THE be applied in the instant case as it would
naive and unlettered individuals they PHILIPPINES (PD 442, as amended) render futile the very purpose for which the
Poseidon International vs. Tamala, G.R. portrayed themselves to be. principle of liberality is adopted. The liberal
No. 186475, June 26, 2013, Brion, J. A. Preliminary Title, Chapter I, interpretation in favor of labor stems from
Fifth, while the respondents Arts. 1-6 the mandate that the workingman’s
Doctrine: Generally, this Court contend that they were coerced and welfare should be the primordial and
looks with disfavor at quitclaims executed unduly influenced in their decision to i. paramount consideration. x x x.
by employees for being contrary to public accept the settlement pay and to sign the Construction in favor of labor
policy. Where the person making the waivers and quitclaims, the records of the Indeed, there is no room for
waiver, however, has done so voluntarily, case do not support this claim. The Manaya vs. Alabang Country Club, G.R. liberality in the instant case "as it would
with a full understanding of its terms and respondents’ claims that they were in "dire No. 168988, June 19, 2007, Chico- render futile the very purpose for which the
with the payment of credible and need for cash" and that they would not be Nazario, J. principle of liberality is adopted." As so
reasonable consideration, we have no paid anything if they would not sign do not rightfully enunciated, "the liberal
option but to recognize the transaction to constitute the coercion nor qualify as the Doctrine. That the perfection of interpretation in favor of labor stems from
be valid and binding. undue influence contemplated by law an appeal within the statutory or the mandate that the workingman’s
sufficient to invalidate a waiver and reglementary period is not only mandatory, welfare should be the primordial and
quitclaim, particularly in the circumstances but jurisdictional, and failure to do so paramount consideration." This Court has
repeatedly ruled that delay in the rational probative value especially in the bar, private respondents cannot be establishing SEAFDEC on January
settlement of labor cases cannot be light of the existence of the official record gainsaid to have given petitioner the 16,1968. Its purpose is as follows: “The
countenanced. Not only does it involve the book of the petitioner’s alleged absences ample opportunity to answer the charges purpose of the Center is to contribute to
survival of an employee and his loved and tardiness in the possession of the leveled against her. the promotion of the fisheries development
ones who are dependent on him for food, employer company. in Southeast Asia by mutual co-operation
shelter, clothing, medicine and education; From the foregoing, there are among the member governments of the
it also wears down the meager resources Ironically, in the memorandum serious doubts in the evidence on record Center, hereinafter called the "Members",
of the workers to the point that, not charging petitioner and notice of as to the factual basis of the charges and through collaboration with
infrequently, they either give up or termination, private respondents referred against petitioner. These doubts shall be international organizations and
compromise for less than what is due to the record book as its basis for resolved in her favor in line with the policy governments external to the Center.”
them. petitioner’s alleged absenteeism and under the Labor Code to afford protection
tardiness. Interestingly, however, the to labor and construe doubts in favor of Being an intergovernmental
Without doubt, to allow the record book was never presented in labor. The consistent rule is that if doubts organization, SEAFDEC including its
appeal of the respondent as what the evidence. Private respondents had exist between the evidence presented by Departments (AQD), enjoys functional
Court of Appeals had done and remand possession thereof and the opportunity to the employer and the employee, the independence and freedom from control of
the case to the NLRC would only result in present the same. Being the basis of the scales of justice must be tilted in favor of the state in whose territory its office is
delay to the detriment of the petitioner. In charges against the petitioner, it is without the latter. The employer must affirmatively located.
Narag v. National Labor Relations doubt the best evidence available to show rationally adequate evidence that the
Commission, citing Vir-Jen Shipping and substantiate the allegations. The purpose dismissal was for a justifiable cause. Not As Senator Jovito R. Salonga
Marine Services, Inc. v. National Labor of the rule requiring the production of the having satisfied its burden of proof, we and Former Chief Justice Pedro L. Yap
Relations Commission, we held that delay best evidence is the prevention of fraud, conclude that the employer dismissed the stated in their book, Public International
in most instances gives the employers because if a party is in possession of such petitioner without any just cause. Hence, Law: Permanent international
more opportunity not only to prepare even evidence and withholds it, and seeks to the termination is illegal. commissions and administrative bodies
ingenious defenses, what with well-paid substitute inferior evidence in its place, the have been created by the agreement of a
talented lawyers they can afford, but even presumption naturally arises that the better ii. considerable number of States for a
to wear out the efforts and meager evidence is withheld for fraudulent Scope/Applica variety of international purposes,
resources of the workers, to the point that purposes which its production would tion economic or social and mainly non-
not infrequently the latter either give up or expose and defeat. Thus, private political. Among the notable instances are
compromise for less than what is due respondents’ unexplained and unjustified the International Labor Organization, the
them. non-presentation of the record book, which SEAFDEC vs. NLRC, G.R. No. 86773, International Institute of Agriculture, the
is the best evidence in its possession and February 14, 1992, Nocon, J. International Danube Commission. In so
Nothing is more settled in our control of the charges against the far as they are autonomous and beyond
jurisprudence than the rule that when the petitioner, casts serious doubts on the Doctrine. Southeast Asian the control of any one State, they have a
conflicting interest of loan and capital are factual basis of the charges of Fisheries Development Center- distinct juridical personality independent of
weighed on the scales of social justice, the absenteeism and tardiness. Aquaculture Department (SEAFDEC- the municipal law of the State where they
heavier influence of the latter must be AQD) is an international agency beyond are situated. As such, according to one
counter-balanced by the sympathy and The law mandates that every the jurisdiction of public respondent NLRC. leading authority "they must be deemed to
compassion the law must accord the opportunity and assistance must be possess a species of international
under-privileged worker. accorded to the employee by the It was established by the personality of their own."
management to enable him to prepare Governments of Burma, Kingdom of
Asuncion vs. NLRC, G.R. No. 129329, adequately for his defense. In Ruffy v. Cambodia, Republic of Indonesia, Japan, Pursuant to its being a signatory
July 31, 2001, Kapunan, J. NLRC, the Court held that what would Kingdom of Laos, Malaysia. Republic of to the Agreement, the Republic of the
qualify as sufficient or "ample opportunity," the Philippines, Republic of Singapore, Philippines agreed to be represented by
Doctrine. In the case at bar, as required by law, would be "every kind of Kingdom of Thailand and Republic of one Director in the governing SEAFDEC
both the handwritten listing and computer assistance that management must accord Vietnam. The Republic of the Philippines Council and that its national laws and
print-outs being unsigned, the authenticity to the employee to enable him to prepare became a signatory to the Agreement regulations shall apply only insofar as its
thereof is highly suspect and devoid of any adequately for his defense." In the case at
contribution to SEAFDEC of "an agreed performance of their functions by the Government is free to withdraw the management-employee relationship as
amount of money, movable and agencies concerned. privileges and immunities accorded. Thus: evidenced by the formation of the Council
immovable property and services of IRRI Employees and Management
necessary for the establishment and The grant of immunity from local Art. IV. Cooperation with (CIEM) wherein "both management and
operation of the Center" are concerned. It jurisdiction to ICMC and IRRI is clearly Government Authorities. employees were and still are represented
expressly waived the application of the necessitated by their international — 1. The Commission for purposes of maintaining mutual and
Philippine laws on the disbursement of character and respective purposes. The shall cooperate at all beneficial cooperation between IRRI and
funds of petitioner SEAFDEC-AQD. objective is to avoid the danger of partiality times with the its employees." The existence of this
and interference by the host country in appropriate authorities Union factually and tellingly belies the
International Catholic Immigration their internal workings. The exercise of of the Government to argument that Pres. Decree No. 1620,
Commission vs. Calleja, G.R. No. jurisdiction by the Department of Labor in ensure the observance which grants to IRRI the status, privileges
85750, September 28, 1990, Melencio- these instances would defeat the very of Philippine laws, rules and immunities of an international
Herrera, J. purpose of immunity, which is to shield the and regulations, organization, deprives its employees of the
affairs of international organizations, in facilitate the proper right to self-organization.
Doctrine. There are basically accordance with international practice, administration of justice
three propositions underlying the grant of from political pressure or control by the and prevent the The immunity granted being
international immunities to international host country to the prejudice of member occurrences of any "from every form of legal process except in
organizations. These principles, contained States of the organization, and to ensure abuse of the privileges so far as in any particular case they have
in the ILO Memorandum are stated thus: the unhampered performance of their and immunities granted expressly waived their immunity," it is
1) international institutions should have a functions. its officials and alien inaccurate to state that a certification
status which protects them against control employees in Article III election is beyond the scope of that
or interference by any one government in ICMC's and IRRI's immunity from of this Agreement to the immunity for the reason that it is not a suit
the performance of functions for the local jurisdiction by no means deprives Commission. against ICMC. A certification election
effective discharge of which they are labor of its basic rights, which are cannot be viewed as an independent or
responsible to democratically constituted guaranteed by Article II, Section 2. In the event that the isolated process. It could tugger off a
international bodies in which all the 18, Article III, Section 8, and Article XIII, Government determines series of events in the collective
nations concerned are represented; 2) no Section 3 (supra), of the 1987 that there has been an bargaining process together with related
country should derive any national Constitution; and implemented by Articles abuse of the privileges incidents and/or concerted activities, which
financial advantage by levying fiscal 243 and 246 of the Labor Code, relied on and immunities granted could inevitably involve ICMC in the "legal
charges on common international funds; by the BLR Director and by Kapisanan. under this Agreement, process," which includes "any penal, civil
and 3) the international organization consultations shall be and administrative proceedings." The
should, as a collectivity of States For, ICMC employees are not held between the eventuality of Court litigation is neither
members, be accorded the facilities for the without recourse whenever there are Government and the remote and from which international
conduct of its official business customarily disputes to be settled. Section 31 of the Commission to organizations are precisely shielded to
extended to each other by its individual Convention on the Privileges and determine whether any safeguard them from the disruption of their
member States. The theory behind all Immunities of the Specialized Agencies of such abuse has functions. Clauses on jurisdictional
three propositions is said to be essentially the United Nations provides that "each occurred and, if so, the immunity are said to be standard
institutional in character. "It is not specialized agency shall make provision Government shall provisions in the constitutions of
concerned with the status, dignity or for appropriate modes of settlement of: (a) withdraw the privileges international Organizations. "The immunity
privileges of individuals, but with the disputes arising out of contracts or other and immunities granted covers the organization concerned, its
elements of functional independence disputes of private character to which the the Commission and its property and its assets. It is equally
necessary to free international institutions specialized agency is a party." Moreover, officials. applicable to proceedings in
from national control and to enable them pursuant to Article IV of the Memorandum personam and proceedings in rem."
to discharge their responsibilities of Agreement between ICMC the the Neither are the employees of
impartially on behalf of all their Philippine Government, whenever there is IRRI without remedy in case of dispute Hidalgo vs. Republic, G.R. No. 179793,
members. The raison d'etre for these any abuse of privilege by ICMC, the with management as, in fact, there had July 5, 2010, Villarama, Jr., J.
immunities is the assurance of unimpeded been organized a forum for better
 Doctrine. Like Armed Forces of in the country for the benefit of veterans, the said LOI does not provide the AFPCES jurisdiction. It is not the absence or
the Philippines Commissary and their widows and orphans, and the corporate features. This being the case, presence of the required appointment from
Exchange Services (AFPCES), Duty Free members of the Armed Forces of the the AFPCES cannot be considered a the CSC, or the membership of an
Philippines is also a government agency Philippines. And the fund and commissary government-owned or controlled employee in the SSS or in the GSIS that
engaged in proprietary activities without shall be managed by an entity called corporation with original charter. In fact, determine the status of the position of an
separate corporate existence. Unlike Duty AFPCES. It can, thus, be said that the the AFPCES does not exercise corporate employee. We agree with the opinion of
Free Philippines, however, AFPCES AFPCES is a mere entity in the Armed powers. Accordingly, its civilian employees the AFP Judge Advocate General that it is
committed acts which created an Forces of the Philippines that is tasked to cannot be considered as government the regulation or the law creating the
impression upon petitioners that they fall manage a commissary in different military employees covered by the Civil Service Service that determines the position of the
within the coverage of pertinent labor laws establishments for the benefit of those Law and rules. employee.
and not the civil service law. First, since mentioned in the said LOI. Hence, it does xxxx
the start of their employment and until their not necessarily follow that all its civilian Further, there is neither a Petitioners are government
unceremonious indefinite suspension from employees are considered government showing that the positions of civilian personnel since they are employed by an
work, AFPCES have enrolled petitioners to employees covered by and subject to the employees of the AFPCES are included in agency attached to the AFP.
the SSS, the primary governmental Civil Service Law and rules. the plantilla of personnel duly approved by Consequently, as correctly observed by
agency engaged in providing social Section 2 (1), Article IX B of the 1987 the Department of Budget and the Court of Appeals, the Labor Arbiter’s
security benefits to employees of the Constitution defines the scope of the civil Management (DBM) nor said employees decision on their complaint for illegal
private sector, instead of the Government service, as follows: were issued appointments attested by the dismissal cannot be made to stand since
Service Insurance System (GSIS) as Commission. the same was issued without jurisdiction.
mandated by Commonwealth Act No. "Sec. 2. (1) The civil service Any decision issued without jurisdiction is
186. AFPCES even remitted its embraces all branches, subdivisions, Indeed, petitioners’ employment a total nullity, and may be struck down at
corresponding employer’s share to instrumentalities, and agencies of the to the AFPCES should have been made in any time.
petitioners’ SSS contributions. Such Government, including government-owned conformity with pertinent civil service
practice has been continuously observed or controlled corporations with original regulations since AFPCES is a However, given petitioners’
by the AFPCES in the span of more than charters." government agency under the direct peculiar situation, the Court is constrained
three (3) decades. control and supervision of the AFP. not to deny the petition entirely, but instead
From the aforequoted However, since this did not happen, to refer it to the CSC pro hac vice. The
Second, the hiring, appointment constitutional provision, it is clear that only petitioners were placed under an Court notes that this case has been
and discipline of AFPCES employees government-owned or controlled anomalous situation with AFPCES pending for nearly a decade, but deciding
never went through the proper procedure corporations with original charters are insisting that they are government it on the merits at this juncture, while ideal
as required by pertinent civil service laws embraced by the civil service. Hence, the employees under the jurisdiction of the and more expeditious, is not possible. The
and regulations. In a formal request made question now that needs to be answered CSC, but with the CSC itself disavowing records of the case fail to adequately spell
by Feliciano M. Gacis, Jr., Officer-in- is: Can LOI 31-A be considered as the any jurisdiction over them. out the validity of the complaint for illegal
Charge of the Office of the Assistant charter of the AFPCES such that it can be dismissal as well as the actual amount of
Secretary for Personnel of the Department considered a government-owned or This notwithstanding, since it the claim. In fact, the records even fail to
of National Defense, inquiring from the controlled corporation embraced by the cannot be denied that petitioners are disclose the amount of salary received by
CSC whether petitioners are indeed Civil Service Law and rules? government employees, the proper body petitioners while they were engaged to
government employees covered by that has jurisdiction to hear the case is the work in AFPCES’ facilities. But rather than
the Civil Service Law and CSC After a careful evaluation and CSC. Such fact cannot be negated by the directing petitioners to re-file and relitigate
regulations, the said Commission issued a scrutiny of LOI 31-A, the Commission is of failure of respondents to follow appropriate their claim before the CSC – a step which
Resolution containing the following the opinion and so holds that the said LOI civil service rules in the hiring, will only duplicate much of the
findings: could hardly be considered as the charter appointment, discipline and dismissal of proceedings already accomplished – the
of AFPCES. It should be noted that the petitioners. Neither can it be denied by the Court deems it best, pro hac vice, to order
It is explicit that the aforequoted said LOI does not specify the composition fact that respondents chose to enroll the NLRC to forward the entire records of
LOI merely set aside a fund in the amount of AFPCES, its specific functions, its petitioners in the SSS instead of the GSIS. the case directly to the CSC which is
of five (5) million pesos for the operation of governing board, its powers and the Such considerations cannot be used directed to take cognizance of the case.
a commissary in all military establishments limitation of the exercise thereof. In short, against the CSC to deprive it of its The CSC is directed to promptly resolve
whether petitioners were illegally -controlled corporation without an original Investment Development Corporation, Thus, the NLRC erred in
dismissed from the service, and whether charter, was incorporated under the which in turn was a subsidiary of the dismissing petitioner's complaint for lack of
they are entitled to their monetary claims. Corporation Code. Pursuant to Article IX- Philippine National Bank, is exluded from jurisdiction because the rule now is that
Further, taking into consideration AFPCES’ B, Sec. 2(1), the civil service embraces the purview of the Civil Service the Civil Service now covers only
failure to observe the proper procedure only those government-owned or Commission. government-owned or controlled
required by pertinent civil service rules and -controlled corporations with original corporations with original charters. Having
regulations regarding the hiring, charter. As such, respondent CDC and its In the case at bench, the National been incorporated under the Corporation
appointment and placement of petitioners, employees are covered by the Labor Code Housing Corporation is a government Law, its relations with its personnel are
we likewise caution the CSC not to use the and not by the Civil Service Law, owned corporation organized in 1959 in governed by the Labor Code and come
AFPCES’ inefficiency to prejudice the consistent with our ruling in NASECO v. accordance with Executive Order No. 399, under the jurisdiction of the National Labor
status of petitioners’ employment or to NLRC, in which we established this otherwise known as the Uniform Charter of Relations Commission.
deny whatever right they may have under distinction. Government Corporation, dated January
pertinent civil service laws. To hold 1, 1959. Its shares of stock are and have B. Book One, Title 1, Chapter I,
otherwise would only be giving premium to Juco vs. NLRC, G.R. No. 98107, August been one hundred percent (100%) owned Arts. 13, 14, 18, 21, 22
AFPCES’ delinquent attitude towards 18, 1997, Hermosisima, Jr., J. by the Government from its incorporation
petitioners in particular, and to the civil under Act 1459, the former corporation C. Book One, Title 1, Chapter
service in general. The AFPCES cannot be Doctrine. Article 13-B, Section law. The government entities that own its II, Arts. 25, 26, 27, 28-35
made to have its cake and eat it, too. 2(1) of the Constitution provides, “The civil shares of stock are the Government
service embraces all branches, Service Insurance System, the Social D. Book One, Title 1, Chapter
Salenga vs. CA, G.R. No. 174941, subdivisions, instrumentalities, and Security System, the Development Bank III, Arts. 36-38
February 1, 2012, Sereno, J. agencies of the Government, including of the Philippines, the National Investment
government owned or controlled and Development Corporation and the i.
Doctrine. Clark Development corporations with original charter.” People's Homesite and Housing Illegal Recruitment
Corporation (CDC) is not under the civil Corporation. Considering the fact that the
service laws on retirement. In National Service Corporation NHA had been incorporated under Act
(NASECO) v. National Labor Relations 1459, the former corporation law, it is but a. Definition
Petitioner Salenga contends that Commission, we had the occasion to apply correct to say that it is a government-
respondent CDC is covered by the GSIS the present Constitution in deciding owned or controlled corporation whose
Law. Thus, he says, the computation of his whether or not the employees of NASECO employees are subject to the provisions of b. Prohibited Acts
retirement benefits should include all the are covered by the Civil Service Law or the Labor Code. This observation is
years of actual government service, the Labor Code notwithstanding that the reiterated in the recent case of Trade R.A. No. 8042 as amended by R.A. No.
starting from the original appointment forty case arose at the time when the 1973 Union of the Philippines and Allied 10022
(40) years ago up to his retirement. Constitution was still in effect. We ruled Services
that the NLRC has jurisdiction over the (TUPAS) v. National Housing Sto. Tomas vs. Salac, G.R. No. 152642,
Respondent CDC owes its employees of NASECO on the ground that Corporation, where we held that the NHA November 13, 2012, Abad, J.
existence to Executive Order No. 80 it is the 1987 Constitution that governs is now within the jurisdiction of the
issued by then President Fidel V. Ramos. because it is the Constitution in place at Department of Labor and Employment, it ISSUE: Is R.A. No. 8042 as amended by
It was meant to be the implementing and the time of the decision. Furthermore, we being a government-owned and/or R.A. No. 10022 constitutional?
operating arm of the Bases Conversion ruled that the new phrase "with original controlled corporation without an original
and Development Authority (BCDA) tasked charter" means that government-owned charter. Furthermore, we also held that the HELD: Yes. The definition of illegal
to manage the Clark Special Economic and controlled corporations refer to workers or employees of the NHC (now recruitment under Section 6 is not
Zone (CSEZ). Expressly, respondent was corporations chartered by special law as NHA) undoubtedly have the right to form vague. But "illegal recruitment" as defined
formed in accordance with Philippine distinguished from corporations organized unions or employee's organization and in Section 6 is clear and unambiguous
corporation laws and existing rules and under the Corporation Code. Thus, that there is no impediment to the holding and, contrary to the RTC’s finding, actually
regulations promulgated by the SEC NASECO which had been organized of a certification election among them as makes a distinction between licensed and
pursuant to Section 16 of Republic Act under the general incorporation statute they are covered by the Labor Code. non-licensed recruiters. By its terms,
(R.A.) 7227. CDC, a government-owned or and a subsidiary of the National persons who engage in "canvassing,
enlisting, contracting, transporting, As the Court held in People v. case against them that intervenors placement consists of an offer or promise
utilizing, hiring, or procuring workers" Ventura, the State under its police power Gumabay, et al., Becmen’s corporate of employment but not when it is done
without the appropriate government "may prescribe such regulations as in its officers and directors, were personally through "canvassing, enlisting, contracting,
license or authority are guilty of illegal judgment will secure or tend to secure the involved in their company’s particular transporting, utilizing, hiring or procuring
recruitment whether or not they commit general welfare of the people, to protect actions or omissions in Jasmin’s case. (of) workers.
the wrongful acts enumerated in that them against the consequence of
section. On the other hand, recruiters who ignorance and incapacity as well as of As a final note, R.A. 8042 is a As we see it, the proviso was
engage in the canvassing, enlisting, etc. of deception and fraud." Police power is "that police power measure intended to regulate intended neither to impose a condition on
OFWs, although with the appropriate inherent and plenary power of the State the recruitment and deployment of OFWs. the basic rule nor to provide an exception
government license or authority, are guilty which enables it to prohibit all things It aims to curb, if not eliminate, the thereto but merely to create a
of illegal recruitment only if they commit hurtful to the comfort, safety, and welfare injustices and abuses suffered by presumption. The presumption is that the
any of the wrongful acts enumerated in of society." numerous OFWs seeking to work abroad. individual or entity is engaged in
Section 6. The rule is settled that every statute has in recruitment and placement whenever he
The rule on venue under its favor the presumption of or it is dealing with two or more persons to
The penalties provided for Section 9 is valid. Section 15(a), Rule constitutionality. The Court cannot inquire whom, in consideration of a fee, an offer or
under Section 7 are reasonable. But, in 110 of the Rules of Court allows into the wisdom or expediency of the laws promise of employment is made in the
fixing uniform penalties for each of the exceptions provided by laws as it says, enacted by the Legislative Department. course of the "canvassing, enlisting,
enumerated acts under Section 6, “Subject to existing laws . .”. Section 9 of Hence, in the absence of a clear and contracting, transporting, utilizing, hiring or
Congress was within its prerogative to R.A. 8042, as an exception to the rule on unmistakable case that the statute is procuring (of) workers. "
determine what individual acts are equally venue of criminal actions is, consistent unconstitutional, the Court must uphold its
reprehensible, consistent with the State with that law’s declared policy of providing validity. The number of persons dealt with
policy of according full protection to labor, a criminal justice system that protects and is not an essential ingredient of the act of
and deserving of the same penalties. It is serves the best interests of the victims of c. Elements recruitment and placement of workers. Any
not within the power of the Court to illegal recruitment. of the acts mentioned in the basic rule in
question the wisdom of this kind of choice. d. Illegal recruitment Article 13(b) win constitute recruitment and
Notably, this legislative policy has been Section 10, last sentence of in large scale or by a syndicate placement even if only one prospective
further stressed in July 2010 with the 2nd paragraph is constitutional. The worker is involved. The proviso merely
enactment of R.A. 10022 which increased pertinent provision provides, “. . If the e. Illegal recruitment lays down a rule of evidence that where a
even more the duration of the penalties of recruitment/placement agency is a juridical and estafa fee is collected in consideration of a
imprisonment and the amounts of fine for being, the corporate officers and directors promise or offer of employment to two or
the commission of the acts listed under and partners as the case may be, shall People vs. Panis, G.R. No. L-58674, July more prospective workers, the individual
Section 7. themselves be jointly and solidarily liable 11, 1990, Cruz, J. or entity dealing with them shall be
with the corporation or partnership for the deemed to be engaged in the act of
Obviously, in fixing such tough aforesaid claims and damages.” But the ISSUE: Is dealing with two or more recruitment and placement. The words
penalties, the law considered the Court has already held, pending persons an indispensable requirement to "shall be deemed" create that
unsettling fact that OFWs must work adjudication of this case, that the liability of constitute recruitment and placement presumption.
outside the country’s borders and beyond corporate directors and officers is not under Art. 13(b) of the Labor Code?
its immediate protection. The law must, automatic. To make them jointly and This is not unlike the presumption
therefore, make an effort to somehow solidarily liable with their company, there HELD: No. Neither interpretation is in article 217 of the Revised Penal Code,
protect them from conscienceless must be a finding that they were remiss in acceptable. We fail to see why the proviso for example, regarding the failure of a
individuals within its jurisdiction who, directing the affairs of that company, such should speak only of an offer or promise of public officer to produce upon lawful
fueled by greed, are willing to ship them as sponsoring or tolerating the conduct of employment if the purpose was to apply demand funds or property entrusted to his
out without clear assurance that their illegal activities. In the case of Becmen the requirement of two or more persons to custody. Such failure shall be prima
contracted principals would treat such and White Falcon, while there is evidence all the acts mentioned in the basic rule. facie evidence that he has put them to
OFWs fairly and humanely. that these companies were at fault in not For its part, the petitioner does not explain personal use; in other words, he shall be
investigating the cause of Jasmin’s death, why dealings with two or more persons are deemed to have malversed such funds or
there is no mention of any evidence in the needed where the recruitment and property. In the instant case, the word
"shall be deemed" should by the same lawfully engage in recruitment and amended, otherwise known as the Labor juridical persons, the officers having
token be given the force of a disputable placement of workers; and (3) the illegal Code of the Philippines: Provided, That control, management or direction of their
presumption or of prima facie evidence of recruitment is committed by a group of any such non-licensee or non-holder who, business shall be liable.
engaging in recruitment and placement. three (3) or more persons conspiring or in any manner, offers or promises for a fee
confederating with one another. When employment abroad to two or more The prosecution likewise
It is unfortunate that we can only illegal recruitment is committed by a persons shall be deemed so engaged. It established that accused-appellant is
speculate on the meaning of the syndicate or in large scale, i.e., if it is shall, likewise, include the following act, guilty of the crime of estafa as defined
questioned provision for lack of records of committed against three (3) or more whether committed by any person, under Article 315 paragraph 2(a) of the
debates and deliberations that would persons individually or as a group, it is whether a non-licensee, non-holder, Revised Penal Code, viz:
otherwise have been available if the Labor considered an offense involving economic licensee or holder of authority:
Code had been enacted as a statute sabotage. Art. 315. Swindling (estafa). –
rather than a presidential decree. The (a) To charge or accept directly or Any person who shall defraud another by
trouble with presidential decrees is that Under Art. 13(b) of the Labor indirectly any amount greater than that any means mentioned hereinbelow…
they could be, and sometimes were, Code, "recruitment and placement" refers specified in the schedule of allowable fees xxxx
issued without previous public discussion to "any act of canvassing, enlisting, prescribed by the Secretary of Labor and 2. By means of any of the
or consultation, the promulgator heeding contracting, transporting, utilizing, hiring or Employment, or to make a worker pay any following false pretenses or fraudulent acts
only his own counsel or those of his close procuring workers, and includes referrals, amount greater than that actually received executed prior to or simultaneously with
advisers in their lofty pinnacle of power. contract services, promising or advertising by him as a loan or advance; the commission of the fraud:
The not infrequent results are rejection, for employment, locally or abroad, whether xxxx
intentional or not, of the interest of the for profit or not". (l) Failure to actually deploy (a) By using fictitious name, or
greater number and, as in the instant without valid reason as determined by the falsely pretending to possess power,
case, certain esoteric provisions that one After a thorough review of the Department of Labor and Employment; influence, qualifications, property, credit,
cannot read against the background facts records, we believe that the prosecution and agency, business or imaginary
usually reported in the legislative journals. was able to establish the elements of the transactions; or by means of other similar
At any rate, the interpretation here offense sufficiently. The evidence readily (m) Failure to reimburse deceits.
adopted should give more force to the reveals that MPM Agency was never expenses incurred by the worker in
campaign against illegal recruitment and licensed by the POEA to recruit workers connection with his documentation and The elements of estafa in general
placement, which has victimized many for overseas employment. processing for purposes of deployment are: (1) that the accused defrauded
Filipino workers seeking a better life in a and processing for purposes of another (a) by abuse of confidence, or (b)
foreign land, and investing hard- earned Even with a license, however, deployment, in cases where the by means of deceit; and (2) that damage
savings or even borrowed funds in pursuit illegal recruitment could still be committed deployment does not actually take place or prejudice capable of pecuniary
of their dream, only to be awakened to the under Section 6 of Republic Act No. 8042 without the worker’s fault. Illegal estimation is caused to the offended party
reality of a cynical deception at the hands ("R.A. 8042"), otherwise known as the recruitment when committed by a or third person. Deceit is the false
of their own countrymen. Migrants and Overseas Filipinos Act of syndicate or in large scale shall be representation of a matter of fact, whether
1995, viz: considered an offense involving economic by words or conduct, by false or
People vs. Gallo, G.R. No. 187730, June sabotage. misleading allegations, or by concealment
29, 2010, Velasco, Jr., J. Sec. 6. Definition. – For purposes of that which should have been disclosed;
of this Act, illegal recruitment shall mean Illegal recruitment is deemed and which deceives or is intended to
Doctrine. To commit syndicated any act of canvassing, enlisting, committed by a syndicate if carried out by deceive another so that he shall act upon
illegal recruitment, three elements must be contracting, transporting, utilizing, hiring, a group of three (3) or more persons it, to his legal injury.
established: (1) the offender undertakes or procuring workers and includes conspiring or confederating with one
either any activity within the meaning of referring, contract services, promising or another. It is deemed committed in large All these elements are present in
"recruitment and placement" defined under advertising for employment abroad, scale if committed against three (3) or the instant case: the accused-appellant,
Article 13(b), or any of the prohibited whether for profit or not, when undertaken more persons individually or as a group. together with the other accused at large,
practices enumerated under Art. 34 of the by a non-licensee or non-holder of The persons criminally liable for deceived the complainants into believing
Labor Code; (2) he has no valid license or authority contemplated under Article 13(f) the above offenses are the principals, that the agency had the power and
authority required by law to enable one to of Presidential Decree No. 442, as accomplices and accessories. In case of capability to send them abroad for
employment; that there were available therefore, whether appellant remitted the commission of the fraud; (c) that the the deployment does not actually take
jobs for them in Korea as factory workers; placement fees to "the agency’s treasurer" offended party relied on the false place without the worker’s fault."
that by reason or on the strength of such or appropriated them. The same provision pretense, fraudulent act, or fraudulent
assurance, the complainants parted with likewise provides that the persons means and was induced to part with his Since illegal recruitment under
their money in payment of the placement criminally liable for illegal recruitment are money or property; and (d) that, as a result Section 6(m) can be committed by any
fees; that after receiving the money, the principals, accomplices and thereof, the offended party suffered person, even by a licensed recruiter, a
accused-appellant and his co-accused accessories. Just the same, therefore, damage. certification on whether Ocden had a
went into hiding by changing their office appellant can be held liable as a principal license to recruit or not, is inconsequential.
locations without informing complainants; by direct participation since she personally Unlike in illegal recruitment where Ocden committed illegal recruitment as
and that complainants were never undertook the recruitment of private profit is immaterial, a conviction for estafa described in said provision by receiving
deployed abroad. As all these complainants without a license or authority requires a clear showing that the offended placement fees from Mana-a, Ferrer, and
representations of the accused-appellant to do so. Worth stressing, the Migrant party parted with his money or property Golidan’s two sons, Jeffries and Howard,
proved false, paragraph 2(a), Article 315 of Workers and Overseas Filipinos Act of upon the offender’s false pretenses, and evidenced by receipts Ocden herself
the Revised Penal Code is thus 1995 is a special law, a violation of which suffered damage thereby. In every criminal issued; and failing to reimburse/refund to
applicable. is malum prohibitum, not mala in se. Intent prosecution, the State must prove beyond Mana-a, Ferrer, and Golidan’s two sons
is thus, immaterial and mere commission reasonable doubt all the elements of the the amounts they had paid when they
People vs. Chua, G.R. No. 187052, of the prohibited act is punishable. crime charged and the complicity or were not able to leave for Italy, through no
September 13, 2012, Villarama, Jr. J. participation of the accused. It is fault of their own.
It is well-established in imperative, therefore, that damage as an
Doctrine. In order to hold a jurisprudence that a person may be element of estafa under Article 315, Under the last paragraph of
person liable for illegal recruitment, the charged and convicted for both illegal paragraph 2(a) be proved as conclusively Section 6, Republic Act No. 8042, illegal
following elements must concur: (1) the recruitment and estafa. The reason as the offense itself. The failure of the recruitment shall be considered an offense
offender undertakes any of the activities therefor is not hard to discern: illegal prosecution to discharge this burden involving economic sabotage if committed
within the meaning of "recruitment and recruitment is malum prohibitum, while concerning the estafa allegedly committed in a large scale, that is, committed against
placement" under Article 13(b) of the estafa is mala in se. In the first, the against Ursulum warrants the acquittal of three or more persons individually or as a
Labor Code, or any of the prohibited criminal intent of the accused is not appellant on the said charge. group.
practices enumerated under Article 34 of necessary for conviction. In the second,
the Labor Code (now Section 6 of such intent is imperative. Estafa under People vs. Ocden, G.R. No. 173198, In People vs. Hu, we held that a
Republic Act No. 8042) and (2) the Article 315, paragraph 2(a) of the Revised June 1, 2011, Leonardo-De Castro, J. conviction for large scale illegal
offender has no valid license or authority Penal Code is committed by any person recruitment must be based on a finding in
required by law to enable him to lawfully who defrauds another by using fictitious Doctrine. It is not necessary for each case of illegal recruitment of three or
engage in recruitment and placement of name, or falsely pretends to possess the prosecution to present a certification more persons, whether individually or as a
workers. In the case of illegal recruitment power, influence, qualifications, property, that Ocden is a non-licensee or non-holder group. While it is true that the law does not
in large scale, a third element is added: credit, agency, business or imaginary of authority to lawfully engage in the require that at least three victims testify at
that the offender commits any of the acts transactions, or by means of similar recruitment and placement of workers. the trial, nevertheless, it is necessary that
of recruitment and placement against deceits executed prior to or simultaneously Section 6 of Republic Act No. 8042 there is sufficient evidence proving that the
three or more persons, individually or as a with the commission of fraud. enumerates particular acts which would offense was committed against three or
group. All three elements are present in constitute illegal recruitment "whether more persons. In this case, there is
the case at bar. The elements of estafa by means committed by any person, whether a non- conclusive evidence that Ocden recruited
of deceit are the following: (a) that there licensee, non-holder, licensee or holder Mana-a, Ferrer, and Golidan’s sons,
Appellant cannot escape liability must be a false pretense or fraudulent of authority." Among such acts, under Jeffries and Howard, for purported
by conveniently limiting her participation representation as to his power, influence, Section 6(m) of Republic Act No. 8042, is employment as factory workers in Italy.
as a cashier of Golden Gate. The qualifications, property, credit, agency, the "[f]ailure to reimburse expenses
provisions of Article 13(b) of the Labor business or imaginary transactions; (b) incurred by the worker in connection with It is settled that a person may be
Code and Section 6 of R.A. No. 8042 are that such false pretense or fraudulent his documentation and processing for charged and convicted separately of illegal
unequivocal that illegal recruitment may or representation was made or executed purposes of deployment, in cases where recruitment under Republic Act No. 8042
may not be for profit. It is immaterial, prior to or simultaneously with the in relation to the Labor Code, and estafa
under Article 315, paragraph 2(a) of the probable cause to be determined the cause, as well as on the rest of the
Revised Penal Code. We explicated in The elements of estafa are: (a) personally by the judge after examination terms and conditions therein. Naturally,
People v. Yabut that: that the accused defrauded another by under oath or affirmation of the contemporaneous with the perfection of
abuse of confidence or by means of complainant and the witnesses he may the employment contract was the birth of
In this jurisdiction, it is settled that deceit, and (b) that damage or prejudice produce, and particularly describing the certain rights and obligations, a breach of
a person who commits illegal recruitment capable of pecuniary estimation is caused place to be searched and the persons or which may give rise to a cause of action
may be charged and convicted separately to the offended party or third person. things to be seized” it is only a judge who against the erring party. Also, the POEA
of illegal recruitment under the Labor Code may issue warrants of search and arrest. Standard Contract must be recognized
and estafa under par. 2(a) of Art. 315 of People vs. Velasco, G.R. No. 195668, and respected. Thus, neither the manning
the Revised Penal Code. The offense of June 25, 2014, Bersamin, J. The decrees in question, it is well agent nor the employer can simply prevent
illegal recruitment is malum prohibitum to note, stand as the dying vestiges of a seafarer from being deployed without a
where the criminal intent of the accused is Doctrine. The essential authoritarian rule in its twilight moments. valid reason.
not necessary for conviction, while estafa elements of illegal recruitment committed We reiterate that the Secretary of Labor,
is malum in se where the criminal intent of in large scale are: (1) that the accused not being a judge, may no longer issue True, the promotion and choice of
the accused is crucial for conviction. engaged in acts of recruitment and search or arrest warrants. Hence, the personnel is an exercise of management
Conviction for offenses under the Labor placement of workers as defined under authorities must go through the judicial prerogative. In fact, this Court has upheld
Code does not bar conviction for offenses Article 13(b) of the Labor Code, or in any process. To that extent, we declare Article management prerogatives, so long as they
punishable by other laws. prohibited activities under Article 34 of the 38, paragraph (c), of the Labor Code, are exercised in good faith for the
same Code; (2) that the accused had not unconstitutional and of no force and effect. advancement of the employer’s interest,
Conversely, conviction for estafa complied with the guidelines issued by the and not for the purpose of defeating or
under par. 2(a) of Art. 315 of the Revised Secretary of Labor and Employment with g. Migrant circumventing the rights of the employees
Penal Code does not bar a conviction for respect to the requirement to secure a workers/OFW under special laws or under valid
illegal recruitment under the Labor Code. It license or authority to recruit and deploy agreements. However, there are
follows that one’s acquittal of the crime of workers; and (3) that the accused Overseas Filipino worker" refers limitations on the exercise of management
estafa will not necessarily result in his committed the unlawful acts against 3 or to a person who is to be engaged, is prerogatives, such as existing laws and
acquittal of the crime of illegal recruitment more persons. In simplest terms, illegal engaged or has been engaged in a the principle of equity and substantial
in large scale, and vice versa. recruitment is committed by persons who, remunerated activity in a state of which he justice.
without authority from the government, or she is not a citizen or on board a vessel
Article 315, paragraph 2(a) of the give the impression that they have the navigating the foreign seas other than a Under the principle of equity and
Revised Penal Code defines estafa as: power to send workers abroad for government ship used for military or non- substantial justice, change of mind was
employment purposes. commercial purposes or on an installation not a valid reason for the non-deployment
Art. 315. Swindling (estafa). - Any located offshore or on the high seas; to be of respondent. He lost the opportunity to
person who shall defraud another by any f. Powers of the used interchangeably with migrant worker. apply for other positions in other agencies
of the means mentioned hereinbelow x x Secretary of Labor (Section 2 of R.A. No. 10022) when he signed the contract of
x: employment with petitioner. Simply put,
xxxx Salazar vs. Achacoso, G.R. No. 81510, i. that contract was binding on the parties
2. By means of any of the March 14, 1990, Sarmiento, J. Commencement of employer-employee and may not later be disowned simply
following false pretenses or fraudulent acts relationship because of a change of mind of either one
executed prior to or simultaneously with ISSUE: May the Philippine Overseas of them.
the commission of the fraud: Employment Administration (or the Abosta Ship Management vs. Hilario,
Secretary of Labor) validly issue warrants G.R. No. 195792, November 24, 2014, The unilateral and unreasonable
(a) By using fictitious name, or of search and seizure (or arrest) under Sereno, C.J. failure to deploy respondent constitutes
falsely pretending to possess power, Article 38 of the Labor Code? breach of contract, which gives rise to a
influence, qualifications, property, credit, Doctrine. The contract was liability to pay actual damages. The
agency, business or imaginary HELD: No. Under the new Constitution, already perfected on the date of its sanctions provided for non-deployment do
transactions; or by means of other similar which states, “. . . no search warrant or execution, which occurred when petitioner not end with the suspension or
deceits. warrant of arrest shall issue except upon and respondent agreed on the object and cancellation of license or the imposition of
a fine and the return of all documents at FACTS: Paul Santiago had been working employer-employee relationship, damages and money claims recoverable
no cost to the worker. They do not forfend as a seafarer for Smith Bell Management, contemporaneous with the perfection of by aggrieved employees because it is not
a seafarer from instituting an action for Inc. for about five (5) years. Then, he the employment contract was the birth of the POEA, but the NLRC, which has
damages against the employer or agency signed a new contract of employment with certain rights and obligations, the breach jurisdiction over such matters.
that has failed to deploy him. Smith Bell, with the duration of nine (9) of which may give rise to a cause of action
months. Later on, the contract was against the erring party. Thus, if the Despite the absence of an
Considering that it was petitioner approved by the Philippine Overseas reverse had happened, that is the seafarer employer-employee relationship between
who entered into the contract of Employment Administration (POEA). failed or refused to be deployed as agreed petitioner and respondent, the Court rules
employment with respondent for and on Santiago was to be deployed on board the upon, he would be liable for damages. that the NLRC has jurisdiction over
behalf of the foreign principal, it has the "MSV Seaspread" which was scheduled to petitioner’s complaint. The jurisdiction of
primary obligation to ensure the leave the port of Manila for Canada on 13 Moreover, while the POEA labor arbiters is not limited to claims
implementation of that contract. February 1998. A week before the Standard Contract must be recognized arising from employer-employee
Furthermore, in line with the policy of the scheduled date of departure, Capt. and respected, neither the manning agent relationships. Section 10 of R.A. No. 8042
state to protect and alleviate the plight of Pacifico Fernandez of Smith Bell sent a nor the employer can simply prevent a (Migrant Workers Act), provides that:
the working class, Section 1, paragraph f facsimile message to the captain of "MSV seafarer from being deployed without a
(3) of Rule II of the POEA Rules and Seaspread" instructing the latter not to valid reason. Sec. 10. Money Claims. –
Regulations, clearly provides that the deploy Santiago because he will just jump Notwithstanding any provision of law to the
private employment agency shall assume from the ship just like his brother Respondent’s act of preventing contrary, the Labor Arbiters of the National
joint and solidary liability with the Christopher. Hence, Santiago was not petitioner from departing the port of Manila Labor Relations Commission (NLRC) shall
employer. Indeed, this Court has deployed. and boarding "MSV Seaspread" have the original and exclusive jurisdiction
consistently held that private employment constitutes a breach of contract, giving rise to hear and decide, within ninety (90)
agencies are held jointly and severally ISSUE: Is the non-deployment of to petitioner’s cause of action. Respondent calendar days after the filing of the
liable with the foreign-based employer for Santiago give rise to liability? unilaterally and unreasonably reneged on complaint, the claims arising out of an
any violation of the recruitment agreement its obligation to deploy petitioner and must employer-employee relationship or by
or contract of employment. This joint and therefore answer for the actual damages virtue of any law or contract involving
solidary liability imposed by law on HELD: Yes. Considering that petitioner he suffered. Filipino workers for overseas deployment
recruitment agencies and foreign was not able to depart from the airport or including claims for actual, moral,
employers is meant to assure the seaport in the point of hire, the We take exception to the Court of exemplary and other forms of damages.
aggrieved worker of immediate and employment contract did not commence, Appeals’ conclusion that damages are not
sufficient payment of what is due him. and no employer-employee relationship recoverable by a worker who was not Since the present petition
was created between the parties. deployed by his agency. The fact that the involves the employment contract entered
In sum, the failure to deploy POEA Rules are silent as to the payment into by petitioner for overseas
respondent was an exercise of a However, a distinction must be of damages to the affected seafarer does employment, his claims are cognizable by
management prerogative that went made between the perfection of the not mean that the seafarer is precluded the labor arbiters of the NLRC.
beyond its limits and resulted in a breach employment contract and the from claiming the same. The sanctions
of contract. In tum, petitioner's breach commencement of the employer-employee provided for non-deployment do not end Article 2199 of the Civil Code
gave rise to respondent's cause of action relationship. The perfection of the contract, with the suspension or cancellation of provides that one is entitled to an
to claim actual damages for the pecuniary which in this case coincided with the date license or fine and the return of all adequate compensation only for such
loss suffered by the latter in the form of the of execution thereof, occurred when documents at no cost to the worker. They pecuniary loss suffered by him as he has
loss of nine months' worth of salary as petitioner and respondent agreed on the do not forfend a seafarer from instituting duly proved. Respondent is thus liable to
provided in the POEA-approved contract object and the cause, as well as the rest of an action for damages against the pay petitioner actual damages in the form
of employment. the terms and conditions therein. The employer or agency which has failed to of the loss of nine (9) months’ worth of
commencement of the employer-employee deploy him. salary as provided in the contract. He is
Santiago vs. CF Sharp Crew relationship, as earlier discussed, would not, however, entitled to overtime pay.
Management, G.R. No. 162419, July 10, have taken place had petitioner been The POEA Rules only provide While the contract indicated a fixed
2007, Tinga, J. actually deployed from the point of hire. sanctions which the POEA can impose on overtime pay, it is not a guarantee that he
Thus, even before the start of any erring agencies. It does not provide for would receive said amount regardless of
whether or not he rendered overtime work. respondent’s basis for not deploying employment is terminated when the commencement of the employer-employee
Even though petitioner was "prevented petitioner is the belief that he will jump contract expires. The exigencies of their relationship, as earlier discussed, would
without valid reason from rendering ship just like his brother, a mere suspicion work necessitates that they be employed have taken place had petitioner been
regular much less overtime service," the that is based on alleged phone calls of on a contractual basis. actually deployed from the point of hire.
fact remains that there is no certainty that several persons whose identities were not Thus, even before the start of any
petitioner will perform overtime work had even confirmed. Time and again, this Stolt-Nielsen vs. Medequillo, G.R. No. employer-employee relationship,
he been allowed to board the vessel. The Court has upheld management 177498, January 18, 2012, Perez, J. contemporaneous with the perfection of
amount of US$286.00 stipulated in the prerogatives so long as they are exercised the employment contract was the birth of
contract will be paid only if and when the in good faith for the advancement of the Doctrine. The POEA Standard certain rights and obligations, the breach
employee rendered overtime work. This employer’s interest and not for the Employment Contract provides that of which may give rise to a cause of action
has been the tenor of our rulings in the purpose of defeating or circumventing the employment shall commence "upon the against the erring party. Thus, if the
case of Stolt-Nielsen Marine Services rights of the employees under special laws actual departure of the seafarer from the reverse had happened, that is the seafarer
(Phils.), Inc. v. National Labor Relations or under valid agreements. Respondent’s airport or seaport in the port of hire." We failed or refused to be deployed as agreed
Commission where we discussed the failure to deploy petitioner is unfounded adhere to the terms and conditions of the upon, he would be liable for damages.
matter in this light: and unreasonable, forcing petitioner to contract so as to credit the valid prior
institute the suit below. The award of stipulations of the parties before the Further, we do not agree with the
The contract provision means attorney’s fees is thus warranted. controversy started. Else, the obligatory contention of the petitioners that the
that the fixed overtime pay of 30% would force of every contract will be useless. penalty is a mere reprimand.
be the basis for computing the overtime However, moral damages cannot Parties are bound not only to the fulfillment
pay if and when overtime work would be be awarded in this case. While of what has been expressly stipulated but The POEA Rules and
rendered. Simply stated, the rendition of respondent’s failure to deploy petitioner also to all the consequences which, Regulations Governing Overseas
overtime work and the submission of seems baseless and unreasonable, we according to their nature, may be in Employment dated 31 May 1991 provides
sufficient proof that said work was actually cannot qualify such action as being tainted keeping with good faith, usage and law. for the consequence and penalty against
performed are conditions to be satisfied with bad faith, or done deliberately to in case of non-deployment of the seafarer
before a seaman could be entitled to defeat petitioner’s rights, as to justify the Thus, even if by the standard without any valid reason. It reads:
overtime pay which should be computed award of moral damages. At most, contract employment commences only
on the basis of 30% of the basic monthly respondent was being overzealous in "upon actual departure of the seafarer", Section 4. Worker’s Deployment.
salary. In short, the contract provision protecting its interest when it became too this does not mean that the seafarer has — An agency shall deploy its recruits
guarantees the right to overtime pay but hasty in making its conclusion that no remedy in case of non-deployment within the deployment period as indicated
the entitlement to such benefit must first petitioner will jump ship like his brother. without any valid reason. Parenthetically, below:
be established. Realistically speaking, a the contention of the petitioners of the xxx
seaman, by the very nature of his job, We likewise do not see alleged poor performance of respondent b. Thirty (30) calendar days from
stays on board a ship or vessel beyond respondent’s failure to deploy petitioner as while on board the first ship MV "Stolt the date of processing by the
the regular eight-hour work schedule. For an act designed to prevent the latter from Aspiration" cannot be sustained to justify administration of the employment
the employer to give him overtime pay for attaining the status of a regular employee. the non-deployment, for no evidence to contracts of seafarers.
the extra hours when he might be sleeping Even if petitioner was able to depart the prove the same was presented.
or attending to his personal chores or even port of Manila, he still cannot be Failure of the agency to deploy
just lulling away his time would be considered a regular employee, regardless We rule that distinction must be a worker within the prescribed period
extremely unfair and unreasonable. of his previous contracts of employment made between the perfection of the without valid reasons shall be a cause
with respondent. In Millares v. National employment contract and the for suspension or cancellation of
The Court also holds that Labor Relations Commission, the Court commencement of the employer-employee license or fine. In addition, the agency
petitioner is entitled to attorney’s fees in ruled that seafarers are considered relationship. The perfection of the contract, shall return all documents at no cost to
the concept of damages and expenses of contractual employees and cannot be which in this case coincided with the date the worker.
litigation. Attorney's fees are recoverable considered as regular employees under of execution thereof, occurred when
when the defendant's act or omission has the Labor Code. Their employment is petitioner and respondent agreed on the The appellate court correctly
compelled the plaintiff to incur expenses to governed by the contracts they sign every object and the cause, as well as the rest of ruled that the penalty of
protect his interest. We note that time they are rehired and their the terms and conditions therein. The reprimand provided under Rule IV, Part VI
of the POEA Rules and Regulations calendar days after the filing of the "In case of termination of
Governing the Recruitment and Sec. 10. Money Claims. – complaint, the claims arising out of an overseas employment without just, valid or
Employment of Land-based Overseas Notwithstanding any provision of law to the employer-employee relationship or by authorized cause as defined by law or
Workers is not applicable in this case. The contrary, the Labor Arbiters of the National virtue of any law or contract involving contract, or any unauthorized deductions
breach of contract happened on February Labor Relations Commission (NLRC) shall Filipino workers for overseas deployment from the migrant worker's salary, the
1992 and the law applicable at that time have the original and exclusive jurisdiction including claims for actual, moral, worker shall be entitled to the full
was the 1991 POEA Rules and to hear and decide, within ninety (90) exemplary and other forms of damage. reimbursement if his placement fee and
Regulations Governing Overseas calendar days after the filing of the Consistent with this mandate, the NLRC the deductions made with interest at
Employment. The penalty for non- complaint, the claims arising out of an shall endeavor to update and keep abreast twelve percent (12%) per annum, plus his
deployment as discussed is suspension or employer-employee relationship or by with the developments in the global salaries for the unexpired portion of his
cancellation of license or fine. virtue of any law or contract involving services industry. employment contract or for three (3)
Filipino workers for overseas deployment months for every year of the unexpired
Now, the question to be dealt with including claims for actual, moral, "The liability of the term, whichever is less.
is how will the seafarer be compensated exemplary and other forms of damages. principal/employer and the
by reason of the unreasonable non- recruitment/placement agency for any and "In case of a final and executory
deployment of the petitioners? Following the law, the claim is still all claims under this section shall be joint judgement against a foreign
cognizable by the labor arbiters of the and several. This provision shall be employer/principal, it shall be
The POEA Rules Governing the NLRC under the second phrase of the incorporated in the contract for overseas automatically disqualified, without further
Recruitment and Employment of Seafarers provision. employment and shall be a condition proceedings, from participating in the
do not provide for the award of damages precedent for its approval. The Philippine Overseas Employment Program
to be given in favor of the employees. The Applying the rules on actual performance bond to de filed by the and from recruiting and hiring Filipino
claim provided by the same law refers to a damages, Article 2199 of the New Civil recruitment/placement agency, as workers until and unless it fully satisfies
valid contractual claim for compensation or Code provides that one is entitled to an provided by law, shall be answerable for the judgement award.
benefits arising from employer-employee adequate compensation only for such all money claims or damages that may be
relationship or for any personal injury, pecuniary loss suffered by him as he has awarded to the workers. If the "Noncompliance with the
illness or death at levels provided for duly proved. Respondent is thus liable to recruitment/placement agency is a juridical mandatory periods for resolutions of case
within the terms and conditions of pay petitioner actual damages in the form being, the corporate officers and directors provided under this section shall subject
employment of seafarers. However, the of the loss of nine (9) months’ worth of and partners as the case may be, shall the responsible officials to any or all of the
absence of the POEA Rules with regard to salary as provided in the contract. This is themselves be jointly and solidarily liable following penalties:
the payment of damages to the affected but proper because of the non-deployment with the corporation or partnership for the
seafarer does not mean that the seafarer of respondent without just cause. aforesaid claims and damages. "(a) The salary of any such official
is precluded from claiming the same. The who fails to render his decision or
sanctions provided for non-deployment do ii. "Such liabilities shall continue resolution within the prescribed
not end with the suspension or Section 10, R.A. No. 8042; Section 7, during the entire period or duration of the period shall be, or caused to be,
cancellation of license or fine and the R.A. No. 10022 employment contract and shall not be withheld until the said official
return of all documents at no cost to the affected by any substitution, amendment complies therewith;
worker. As earlier discussed, they do not Section 7. Section 10 of or modification made locally or in a foreign "(b) Suspension for not more than
forfend a seafarer from instituting an Republic Act No. 8042, as amended, is country of the said contract. ninety (90) days; or
action for damages against the employer hereby amended to read as follows: "(c) Dismissal from the service
or agency which has failed to deploy him. "Any compromise/amicable with disqualification to hold any
"SEC. 10. Money Claims. - settlement or voluntary agreement on appointive public office for five (5)
We thus decree the application of Notwithstanding any provision of law to the money claims inclusive of damages under years.
Section 10 of Republic Act No. 8042 contrary, the Labor Arbiters of the National this section shall be paid within thirty (30)
(Migrant Workers Act) which provides for Labor Relations Commission (NLRC) shall days from approval of the settlement by "Provided, however, That the
money claims by reason of a contract have the original and exclusive jurisdiction the appropriate authority. penalties herein provided shall be without
involving Filipino workers for overseas to hear and decide, within ninety (90) prejudice to any liability which any such
deployment. The law provides: official may have incured under other
existing laws or rules and regulations as a education, good order, safety, and general serves a compelling state interest through be elevated to the level of a compelling
consequence of violating the provisions of welfare of the people are generally the least restrictive means. state interest is odious.
this paragraph." applicable not only to future contracts but
even to those already in existence, for all What constitutes compelling state Moreover, even if the purpose of
Serrano vs. Gallant Maritime Services, private contracts must yield to the superior interest is measured by the scale of rights the subject clause is to lessen the solidary
G.R. No. 167614, March 24, 2009, and legitimate measures taken by the and powers arrayed in the Constitution liability of placement agencies vis-a-
Austria-Martinez, J. State to promote public welfare. and calibrated by history. It is akin to the vis their foreign principals, there are
paramount interest of the state for which mechanisms already in place that can be
FACTS: Antonio Serrano’s employment The provision violates Section some individual liberties must give way, employed to achieve that purpose without
contract was for a period of 12 months or 1, Article III of the Constitution, and such as the public interest in safeguarding infringing on the constitutional rights of
from March 19, 1998 up to March 19, Section 18, Article II and Section 3, health or maintaining medical OFWs.
1999, but at the time of his repatriation on Article XIII on labor as a protected standards, or in maintaining access to
May 26, 1998, he had served only two (2) sector. Upon cursory reading, the subject information on matters of public concern. The POEA Rules and
months and seven (7) days of his contract, clause appears facially neutral, for it Regulations Governing the Recruitment
leaving an unexpired portion of nine (9) applies to all OFWs. However, a closer In the present case, the Court and Employment of Land-Based Overseas
months and twenty-three (23) days. examination reveals that the subject dug deep into the records but found no Workers, dated February 4, 2002, imposes
clause has a discriminatory intent against, compelling state interest that the subject administrative disciplinary measures on
ISSUE: Whether or not the portion “plus and an invidious impact on, OFWs at two clause may possibly serve. erring foreign employers who default on
his salaries for the unexpired portion of his levels: First, OFWs with employment their contractual obligations to migrant
employment contract or for three (3) contracts of less than one year vis-à-vis The OSG defends the subject workers and/or their Philippine agents.
months for every year of the unexpired OFWs with employment contracts of one clause as a police power measure These disciplinary measures range from
term, whichever is less” of Section 10 of year or more; Second, among OFWs with "designed to protect the employment of temporary disqualification to preventive
R.A. No. 8042 is constitutional. employment contracts of more than one Filipino seafarers overseas x x x. By suspension. The POEA Rules and
year; and Third, OFWs vis-à-vis local limiting the liability to three months [sic], Regulations Governing the Recruitment
HELD: No. workers with fixed-period employment. Filipino seafarers have better chance of and Employment of Seafarers, dated May
getting hired by foreign employers." The 23, 2003, contains similar administrative
The provision does not violate The Court concludes that the limitation also protects the interest of local disciplinary measures against erring
the non-impairment clause as it subject clause contains a suspect placement agencies, which otherwise may foreign employers.
preceded the employment contract of classification in that, in the be made to shoulder millions of pesos in
the parties in this case. The prohibition computation of the monetary benefits "termination pay." Resort to these administrative
is aligned with the general principle that of fixed-term employees who are measures is undoubtedly the less
laws newly enacted have only a illegally discharged, it imposes a 3- Assuming that, as advanced by restrictive means of aiding local placement
prospective operation, and cannot affect month cap on the claim of OFWs with the OSG, the purpose of the subject agencies in enforcing the solidary liability
acts or contracts already an unexpired portion of one year or clause is to protect the employment of of their foreign principals.
perfected; however, as to laws already in more in their contracts, but none on the OFWs by mitigating the solidary liability of
existence, their provisions are read into claims of other OFWs or local workers placement agencies, such callous and Thus, the subject clause in the
contracts and deemed a part with fixed-term employment. The cavalier rationale will have to be rejected. 5th paragraph of Section 10 of R.A. No.
thereof. Thus, the non-impairment clause subject clause singles out one There can never be a justification for any 8042 is violative of the right of petitioner
under Section 10, Article II is limited in classification of OFWs and burdens it form of government action that alleviates and other OFWs to equal protection.
application to laws about to be enacted with a peculiar disadvantage. the burden of one sector, but imposes the
that would in any way derogate from same burden on another sector, especially Further, there would be certain
existing acts or contracts by enlarging, There being a suspect when the favored sector is composed of misgivings if one is to approach the
abridging or in any manner changing the classification involving a vulnerable sector private businesses such as placement declaration of the unconstitutionality of the
intention of the parties thereto. protected by the Constitution, the Court agencies, while the disadvantaged sector subject clause from the lone perspective
Moreover, police power now subjects the classification to a strict is composed of OFWs whose protection that the clause directly violates state policy
legislations adopted by the State to judicial scrutiny, and determines whether it no less than the Constitution commands. on labor under Section 3, Article XIII of the
promote the health, morals, peace, The idea that private business interest can Constitution.
 source of a positive enforceable right to The view that the concepts of ISSUE: Is the reenactment in R.A. No.
While all the provisions of the stave off the dismissal of an employee for suspect classification and strict judicial 10022 of the provision which was declared
1987 Constitution are presumed self- just cause owing to the failure to serve scrutiny formulated in Central Bank unconstitutional in Serrano vs. Gallant
executing, there are some which this Court proper notice or hearing. As manifested by Employee Association exaggerate the valid? (2014 Bar in Political Law)
has declared not judicially enforceable, several framers of the 1987 Constitution, significance of Section 3, Article XIII is a
Article XIII being one, particularly Section the provisions on social justice require groundless apprehension. Central HELD: No. Moreover, this court is
3 thereof, the nature of which, this Court, legislative enactments for their Bank applied Article XIII in conjunction possessed with the constitutional duty to
in Agabon v. National Labor Relations enforceability. with the equal protection clause. Article "[p]romulgate rules concerning the
Commission, has described to be not self- XIII, by itself, without the application of the protection and enforcement of
actuating: Thus, Section 3, Article XIII equal protection clause, has no life or constitutional rights." When cases become
cannot be treated as a principal source of force of its own as elucidated in Agabon. mootand academic, we do not hesitate to
Thus, the constitutional mandates direct enforceable rights, for the violation provide for guidance to bench and bar in
of protection to labor and security of of which the questioned clause may be Along the same line of reasoning, situations where the same violations are
tenure may be deemed as self-executing declared unconstitutional. It may the Court further holds that the subject capable of repetition but will evade review.
in the sense that these are automatically unwittingly risk opening the floodgates of clause violates petitioner's right to This is analogous to cases where there
acknowledged and observed without need litigation to every worker or union over substantive due process, for it deprives are millions of Filipinos working abroad
for any enabling legislation. However, to every conceivable violation of so broad a him of property, consisting of monetary who are bound to suffer from the lack of
declare that the constitutional provisions concept as social justice for labor. benefits, without any existing valid protection because of the restoration of an
are enough to guarantee the full exercise governmental purpose. identical clause in a provision previously
of the rights embodied therein, and the It must be stressed that Section declared as unconstitutional.
realization of ideals therein expressed, 3, Article XIII does not directly bestow on The argument of the Solicitor
would be impractical, if not unrealistic. The the working class any actual enforceable General, that the actual purpose of the In the hierarchy of laws, the
espousal of such view presents the right, but merely clothes it with the status subject clause of limiting the entitlement of Constitution is supreme. No branch or
dangerous tendency of being overbroad of a sector for whom the Constitution OFWs to their three-month salary in case office of the government may exercise its
and exaggerated. The guarantees of "full urges protection through executive or of illegal dismissal, is to give them a better powers in any manner inconsistent with
protection to labor" and "security of legislative action and judicial chance of getting hired by foreign the Constitution, regardless of the
tenure", when examined in isolation, are recognition. Its utility is best limited to employers. This is plain speculation. As existence of any law that supports such
facially unqualified, and the broadest being an impetus not just for the executive earlier discussed, there is nothing in the exercise. The Constitution cannot be
interpretation possible suggests a blanket and legislative departments, but for the text of the law or the records of the trumped by any other law. All laws must be
shield in favor of labor against any form of judiciary as well, to protect the welfare of deliberations leading to its enactment or read in light of the Constitution. Any law
removal regardless of circumstance. This the working class. And it was in fact the pleadings of respondent that would that is inconsistent with it is a nullity.
interpretation implies an unimpeachable consistent with that constitutional agenda indicate that there is an existing
right to continued employment-a utopian that the Court in Central Bank (now governmental purpose for the subject Thus, when a law or a provision
notion, doubtless-but still hardly within the Bangko Sentral ng Pilipinas) Employee clause, or even just a pretext of one. of law is null because it is inconsistent with
contemplation of the framers. Subsequent Association, Inc. v. Bangko Sentral ng the Constitution, the nullity cannot be
legislation is still needed to define the Pilipinas, penned by then Associate The subject clause does not state cured by reincorporation or reenactment of
parameters of these guaranteed rights to Justice now Chief Justice Reynato S. or imply any definitive governmental the same or a similar law or provision. A
ensure the protection and promotion, not Puno, formulated the judicial precept that purpose; and it is for that precise reason law or provision of law that was already
only the rights of the labor sector, but of when the challenge to a statute is that the clause violates not just petitioner's declared unconstitutional remains as such
the employers' as well. Without specific premised on the perpetuation of prejudice right to equal protection, but also her right unless circumstances have so changed as
and pertinent legislation, judicial bodies against persons favored by the to substantive due process under Section to warrant a reverse conclusion.
will be at a loss, formulating their own Constitution with special protection -- such 1, Article III of the Constitution.
conclusion to approximate at least the as the working class or a section thereof -- We are not convinced by the
aims of the Constitution. the Court may recognize the existence of Sameer Overseas Placement vs. pleadings submitted by the parties that the
a suspect classification and subject the Cabiles, G.R. No. 170139, August 5, situation has so changed so as to cause
Ultimately, therefore, Section 3 same to strict judicial scrutiny. 2014, Leonen, J. us to reverse binding precedent.
of Article XIII cannot, on its own, be a
 Likewise, there are special unconstitutional because it infringed on Becmen Service Exporter and distress. Instead, they abandoned
reasons of judicial efficiency and economy workers’ right to contract. Promotions, Inc. vs. Sps. Cuaresma, Jasmin’s case and allowed it to remain
that attend to these cases. The new law G.R. Nos. 182978-79, April 27, 2009, unsolved to further their interests and
puts our overseas workers in the same We observe that the reinstated Ynarez-Santiago, J. avoid anticipated liability which parents or
vulnerable position as they were prior to clause, this time as provided in Republic relatives of Jasmin would certainly exact
Serrano. Failure to reiterate the very ratio Act. No. 10022, violates the constitutional FACTS: Jasmin Cuaresma (Jasmin) was from them. They willfully refused to protect
decidendi of that case will result in the rights to equal protection and due deployed by Becmen Service Exporter and and tend to the welfare of the deceased
same untold economic hardships that our process. Petitioner as well as the Solicitor Promotion, Inc. (Becmen) to serve as Jasmin, treating her case as just one of
reading of the Constitution intended to General have failed to show any assistant nurse in Al-Birk Hospital in the those unsolved crimes that is not worth
avoid. Obviously, we cannot countenance compelling change in the circumstances Kingdom of Saudi Arabia (KSA), for a wasting their time and resources on. The
added expenses for further litigation that that would warrant us to revisit the contract duration of three years. evidence does not even show that
will reduce their hard earned wages as precedent. Subsequently, Jasmin was found dead by Becmen and Rajab lifted a finger to
well as add to the indignity of having been a female cleaner lying on the floor inside provide legal representation and seek an
deprived of the protection of our laws We reiterate our finding in her dormitory room with her mouth investigation of Jasmin’s case. Worst of
simply because our precedents have not Serrano v. Gallant Maritime that limiting foaming and smelling of poison. Saudi all, they unnecessarily trampled upon the
been followed. There is no constitutional wages that should be recovered by an Arabian authorities concluded that Jasmin person and dignity of Jasmin by standing
doctrine that causes injustice in the face of illegally dismissed overseas worker to committed suicide. However, when her pat on the argument that Jasmin
empty procedural niceties. Constitutional three months is both a violation of due remains was repatriated to the Philippines, committed suicide, which is a grave
interpretation is complex, but it is never process and the equal protection clauses it was found out that she was physically accusation given its un-Christian nature.
unreasonable. of the Constitution. and sexually abused.
We cannot reasonably expect
Thus, in a resolution dated Poseidon vs. Tamala, G.R. No. 186475, ISSUE: Whether or not the recruitment that Jasmin’s parents should be the ones
October 22, 2013, we ordered the parties June 26, 2013, Brion, J. agencies, Becmen and White Falcon, are to actively pursue a just resolution of her
and the Office of the Solicitor General to liable. case in the KSA, unless they are provided
comment on the constitutionality of the ISSUE: Is Section 10 of R.A. No. 8042 as with the finances to undertake this
reinstated clause in Republic Act No. amended applies only in cases of illegal HELD: Yes. Under Republic Act No. 8042 herculean task. Sadly, Becmen and Rajab
10022. dismissal? (R.A. 8042), or the Migrant Workers and did not lend any assistance at all in this
Overseas Filipinos Act of 1995, the State respect. The most Jasmin’s parents can
In its comment, petitioner argued HELD: Yes. A plain reading of this shall, at all times, uphold the dignity of its do is to coordinate with Philippine
that the clause was constitutional. The provision readily shows that it applies only citizens whether in country or overseas, in authorities as mandated under R.A. 8042,
legislators intended a balance between the to cases of illegal dismissal or dismissal general, and Filipino migrant workers, in obtain free legal assistance and secure
employers’ and the employees’ rights by without any just, authorized or valid cause particular. The State shall provide the aid of the Department of Foreign
not unduly burdening the local recruitment and finds no application in cases where adequate and timely social, economic and Affairs, the Department of Labor and
agency. Petitioner is also of the view that the overseas Filipino worker was not legal services to Filipino migrant Employment, the POEA and the OWWA in
the clause was already declared as illegally dismissed. We found the occasion workers. The rights and interest trying to solve the case or obtain relief, in
constitutional in Serrano. to apply this rule in International of distressed overseas Filipinos, in accordance with Section 23 of R.A. 8042.
Management Services v. Logarta, where general, and Filipino migrant workers, in To our mind, the Cuaresmas did all that
The Office of the Solicitor we held that Section 10 of R.A. No. 8042 particular, documented or undocumented, was within their power, short of actually
General also argued that the clause was applies only to an illegally dismissed are adequately protected and flying to the KSA. Indeed, the Cuaresmas
valid and constitutional. However, since overseas contract worker or a worker safeguarded. went even further. To the best of their
the parties never raised the issue of the dismissed from overseas employment abilities and capacities, they ventured to
constitutionality of the clause asreinstated without just, valid or authorized cause. Becmen and White Falcon, as investigate Jasmin’s case on their own:
in Republic Act No. 10022, its contention is licensed local recruitment agencies, they caused another autopsy on Jasmin’s
that it is beyond judicial review. iii. Liability of miserably failed to abide by the provisions remains as soon as it arrived to inquire
principal/agent for damages; theory of of R.A. 8042. Recruitment agencies are into the true cause of her death. Beyond
On the other hand, imputed knowledge expected to extend assistance to their that, they subjected themselves to the
respondentargued that the clause was deployed OFWs, especially those in painful and distressful experience of
exhuming Jasmin’s remains in order to distressed or not. Who else is in a better taking advantage of the poor employee The grant of moral damages to
obtain another autopsy for the sole position, if not these recruitment agencies, and her family’s ignorance, helplessness, the employee by reason of misconduct on
purpose of determining whether or not to render immediate aid to their deployed indigence and lack of power and the part of the employer is sanctioned by
their daughter was poisoned. Their quest OFWs abroad? resources to seek the truth and obtain Article 2219 (10) of the Civil Code, which
for the truth and justice is equally to be justice for the death of a loved one. allows recovery of such damages in
expected of all loving parents. All this time, Article 19 of the Civil Code actions referred to in Article 21.
Rajab and Becmen – instead of extending provides that every person must, in the Giving in handily to the idea that
their full cooperation to the Cuaresma exercise of his rights and in the Jasmin committed suicide, and adamantly Thus, in view of the foregoing,
family – merely sat on their laurels in performance of his duties, act with justice, insisting on it just to protect Rajab and the Court holds that the Cuaresmas are
seeming unconcern. give everyone his due, and observe Becmen’s material interest – despite entitled to moral damages, which Becmen
honesty and good faith. Article 21 of the evidence to the contrary – is against the and White Falcon are jointly and solidarily
In one case, the SC held that the Code states that any person who wilfully moral law and runs contrary to the good liable to pay, together with exemplary
foreign employer may not have been causes loss or injury to another in a custom of not denouncing one’s fellowmen damages for wanton and oppressive
obligated by its contract to provide a manner that is contrary to morals, good for alleged grave wrongdoings that behavior, and by way of example for the
companion for a returning employee, but it customs or public policy shall compensate undermine their good name and honor. public good.
cannot deny that it was expressly tasked the latter for the damage. And, lastly,
by its agreement to assure the safe return Article 24 requires that in all contractual, Whether employed locally or Private employment agencies are
of said worker. The uncaring attitude property or other relations, when one of overseas, all Filipino workers enjoy the held jointly and severally liable with the
displayed by petitioners who, knowing the parties is at a disadvantage on protective mantle of Philippine labor and foreign-based employer for any violation of
fully well that its employee had been account of his moral dependence, social legislation, contract stipulations to the recruitment agreement or contract of
suffering from some mental disorder, ignorance, indigence, mental weakness, the contrary notwithstanding. This employment. This joint and solidary liability
nevertheless still allowed him to travel tender age or other handicap, the courts pronouncement is in keeping with the imposed by law against recruitment
home alone, is appalling to say the must be vigilant for his protection. basic public policy of the State to afford agencies and foreign employers is meant
least. Such attitude harks back to protection to labor, promote full to assure the aggrieved worker of
another time when the landed gentry Clearly, Rajab, Becmen and employment, ensure equal work immediate and sufficient payment of what
practically owned the serfs, and White Falcon’s acts and omissions are opportunities regardless of sex, race or is due him. If the recruitment/placement
disposed of them when the latter had against public policy because they creed, and regulate the relations between agency is a juridical being, the corporate
grown old, sick or otherwise lost their undermine and subvert the interest and workers and employers. This ruling is officers and directors and partners as the
usefulness. general welfare of our OFWs abroad, who likewise rendered imperative by Article 17 case may be, shall themselves be jointly
are entitled to full protection under the law. of the Civil Code which states that laws and solidarily liable with the corporation or
Thus, more than just recruiting They set an awful example of how foreign which have for their object public order, partnership for the aforesaid claims and
and deploying OFWs to their foreign employers and recruitment agencies public policy and good customs shall not damages.
principals, recruitment agencies have should treat and act with respect to their be rendered ineffective by laws or
equally significant responsibilities. In a distressed employees and workers judgments promulgated, or by White Falcon’s assumption of
foreign land where OFWs are likely to abroad. Their shabby and callous determinations or conventions agreed Becmen’s liability does not automatically
encounter uneven if not discriminatory treatment of Jasmin’s case; their uncaring upon in a foreign country.31 result in Becmen’s freedom or release
treatment from the foreign government, attitude; their unjustified failure and refusal The relations between capital and labor from liability. This has been ruled in ABD
and certainly a delayed access to to assist in the determination of the true are so impressed with public Overseas Manpower Corporation v.
language interpretation, legal aid, and the circumstances surrounding her mysterious interest,32 and neither shall act NLRC. Instead, both Becmen and White
Philippine consulate, the recruitment death, and instead finding satisfaction in oppressively against the other, or impair Falcon should be held liable solidarily,
agencies should be the first to come to the unreasonable insistence that she the interest or convenience of the without prejudice to each having the right
the rescue of our distressed OFWs since committed suicide just so they can public.33 In case of doubt, all labor to be reimbursed under the provision of
they know the employers and the conveniently avoid pecuniary liability; legislation and all labor contracts shall be the Civil Code that whoever pays for
addresses where they are deployed or placing their own corporate interests construed in favor of the safety and decent another may demand from the debtor what
stationed. Upon them lies the primary above of the welfare of their employee’s – living for the laborer. he has paid.
obligation to protect the rights and ensure all these are contrary to morals, good
the welfare of our OFWs, whether customs and public policy, and constitute
 Sunace International Manpower respondent had taken already her savings not transmissible by their nature, or by hire to effectively terminate the contract of
Services vs. NLRC, G.R. No. 161757, from her foreign employer and that no stipulation or by provision of law. employment.
January 25, 2006, Carpio-Morales, J. deduction was made on her salary. It
contains nothing about the extension or Furthermore, as Sunace correctly Meanwhile, Caseñas claimed that
FACTS: The February 21, 2000 telefax the petitioner’s consent thereto. points out, there was an implied revocation his transfer was due to the fact that MV
message from the Taiwanese broker to of its agency relationship with its foreign Perseverance could not leave port
Sunace, the only basis of a finding of Parenthetically, since the telefax principal when, after the termination of the because of incomplete documents for its
continuous communication, message is dated February 21, 2000, it is original employment contract, the foreign operation. This was not disputed. To the
reads verbatim: safe to assume that it was sent to principal directly negotiated with Divina mind of the Court, having incomplete
xxxx enlighten Sunace who had been directed, and entered into a new and separate documents for the vessel’s operation
by Summons
garding to Divina, she did not say anything about her saving in police station. As issued on February 15, employment contract in Taiwan. Article renders it unseaworthy. While
2000, to
contact with her employer, she took back her saving already last years. And they appear on February 28, 2000 for 1924 of the New Civil Code reading seaworthiness is commonly equated with
a mandatory
not deduct any money from her salary. Or she will call back her employer to check conference following Divina’s The agency is revoked if the principal the physical aspect and condition of the
gain. If her employer said yes! we will get it back for her. filing of the complaint on February 14, directly manages the business entrusted vessel for voyage as its ability to withstand
ank you and best regards. 2000. to the agent, dealing directly with third the rigors of the sea, it must not be
persons thus applies. forgotten that a vessel should be armed
gd.) Respecting the Court of Appeals with the necessary documents required by
following dictum: APQ Shipmanagement vs. Casenas, the maritime rules and regulations, both
mund Wang G.R. No. 197303, June 4, 2014, local and international. It has been written
esident As agent of its foreign principal, Mendoza, J. that vessel seaworthiness further extends
Sunace cannot profess ignorance of such to cover the documents required to ensure
an extension as obviously, the act of its Doctrine. In a nutshell, there are that the vessel can enter and leave ports
ISSUE: Is the theory of imputed
principal extending Divina’s employment three (3) requirements necessary for the without problems.
knowledge applicable in this case?
contract necessarily bound it, complete termination of the employment
it too is a misapplication, a misapplication contract: (1.)termination due to expiration Accordingly, Caseñas’ contract
HELD: No. The finding of the Court of
of the theory of imputed knowledge. or other reasons/causes; (2.) signing off should have been terminated and he
Appeals solely on the basis of the above-
from the vessel; and (3.) arrival at the should have been repatriated to the
quoted telefax message, that Sunace
The theory of imputed knowledge point of hire. In this case, there was no Philippines because a seafarer cannot be
continually communicated with the foreign
ascribes the knowledge of the agent, clear showing that Caseñas signed off forced to sail with an unseaworthy vessel,
"principal" (sic) and therefore was aware
Sunace, to the principal, employer from the vessel upon the expiration of his pursuant to Section 24 of the POEA-
of and had consented to the execution of
Xiong, not the other way around . The employment contract, which was in SEC. There was, however, no showing
the extension of the contract is misplaced.
knowledge of the principal-foreign February or April 2005. He did not arrive that his contract was terminated by reason
The message does not provide evidence
employer cannot, therefore, be imputed to either in Manila, his point of hire, because of such transfer. It is necessary to reiterate
that Sunace was privy to the new contract
its agent Sunace. he was still on board the vessel MV that MV Haitien Pride appears to be
executed after the expiration on February
Haitien Pride on the supposed date of manned by, and accredited with, the same
1, 1998 of the original contract. That
There being no substantial proof expiration of his contract. It was only on principal/ agency. His joining the said
Sunace and the
that Sunace knew of and consented to be August 14, 2006 that he signed off21 from vessel could only mean that it was for the
Taiwanese broker communicated
bound under the 2-year employment MV Haitien Pride and arrived in Manila on purpose of completing his contract as the
regarding Divina’s allegedly withheld
contract extension, it cannot be said to be August 30, 2006. transfer was made well within the period of
savings does not necessarily mean that
privy thereto. As such, it and its "owner" his employment contract on board MV
Sunace ratified the extension of the
cannot be held solidarily liable for any of In Interorient Maritime Perseverance.
contract. As Sunace points out in its
Divina’s claims arising from the 2-year Enterprises, Inc. v. NLRC, the Court held
Reply filed before the Court of Appeals,
employment extension. As the New Civil that the obligations and liabilities of the APQ further claims that that there
Code provides, contracts take effect only local agency and its foreign principal do was an agreement between Caseñas and
As can be seen from that letter
between the parties, their assigns, and not end upon the expiration of the the shipowner, but there was no concrete
communication, it was just an information
heirs, except in case where the rights and contracted period as they were duty bound proof adduced to show that indeed a new
given to the petitioner that the private
obligations arising from the contract are to repatriate the seaman to the point of agreement for the extension of the
contract was ever made. Granting that a Essential Hypertension aside from employer-employee relationship or by relationship. Laws are deemed
new agreement for the extension was Ischemic Heart Disease. From the time of virtue of any law or contract involving incorporated in employment contracts and
made, the acts of APQ and Crew Caseñas' diagnosis by the company- Filipino workers for overseas deployment the contracting parties need not repeat
Management proved that there was designated physician, he was under the including claims for actual, moral, them. They do not even have to be
implied consent to the extension. state of temporary total disability, which exemplary and other forms of damage. referred to. Every contract, thus, contains
lasted for at least 120 days as provided by Consistent with this mandate, the NLRC not only what has been explicitly
In Magsaysay Maritime law. Such period could be extended up to shall endeavor to update and keep abreast stipulated, but also the statutory provisions
Corporation vs. NLRC, citing Vergara vs. 240 days, if further medical attention was with the developments in the global that have any bearing on the matter.
Hammonia Maritime Services, Inc., the required. services industry.
Court reiterated that the seafarer, upon E. Book One, Title II, Arts. 39-
sign-off from his vessel, must report to the There was, however, no showing The liability of the 42
company-designated physician within of any justification to extend said period. principal/employer and the
three (3) days from arrival for diagnosis As the law requires, within 120 days from recruitment/placement agency for any and F. Book Two, Title II, Chapters
and treatment. For the duration of the the time he was diagnosed of his illness, all claims under this section shall be joint I-III
treatment but in no case to exceed 120 the company-designated physician must and several. This provision shall be
days, the seaman is on temporary total make a declaration as to the fitness or incorporated in the contract for overseas 1. Definition
disability as he is totally unable to work. unfitness of Caseñas As correctly employment and shall be a condition
He receives his basic wage during this observed by the CA, however, the 120 day precedent for its approval. The a. Apprentice,
period until he is declared fit to work or his period lapsed without such a declaration performance bond to [be] filed by the Apprenticeship Agreement,
temporary disability is acknowledged by being made. Caseñas is now deemed to recruitment/placement agency, as Apprenticeship
the company to be permanent, either be in a state of permanent total disability provided by law, shall be answerable for Occupation
partially or totally, as his condition is and, thus, clearly entitled to the total all money claims or damages that may be
defined under the POEA-SEC and by disability benefits provided by law. awarded to the workers. If the b. Learners
applicable Philippine laws. If the 120 days recruitment/placement agency is a juridical
initial period is exceeded and no such Sealanes Marine vs. dela Torre, G.R. being, the corporate officers and directors c.
declaration is made because the seafarer No. 214132, February 18, 2015, Reyes, and partners as the case may be, shall Handicapped workers
requires further medical attention, then the J. themselves be jointly and solidarily liable
temporary total disability period may be with the corporation or partnership for the Section 4 of R.A. No. 7796 (TESDA Law)
extended up to a maximum of 240 days, Doctrine. Concerning the joint aforesaid claims and damages.
subject to the right of the employer to and solidary liability of the manning j) "Apprenticeship" training within
declare within this period that a partial or agency, Sealanes, its foreign principal, Such liabilities shall continue employment with compulsory related
total disability already exists. The seaman Arklow Shipping Netherland, and during the entire period or duration of the theoretical instructions involving a contract
may, of course, also be declared fit to work Sealanes’ President Dumatol, Section 10 employment contract and shall not be between an apprentice and an employer
at any time such declaration is justi1ied by of Republic Act (R.A.) No. 8042, otherwise affected by any substitution, amendment on an approved apprenticeable
his medical condition. known as the "Migrant Workers and or modification made locally or in a foreign occupation;
Overseas Filipinos Act of 1995", as country of the said contract.
In this case, Casenas amended by Section 7 of R.A. No. 10022, xxxx k) "Apprentice" is a person
immediately reported to APQ for the reads: undergoing training for an approved
required post-employment medical Thus, every applicant for license apprenticeable occupation during an
examination upon his return to the SEC. 10. Money Claims. – to operate a seafarers’ manning agency established period assured by an
Philippines. He was referred to the Notwithstanding any provision of law to the shall, in the case of a corporation or apprenticeship agreement;
company-designated physician, who contrary, the Labor Arbiters of the National partnership, submit a written application
diagnosed him to be suffering from Labor Relations Commission (NLRC) shall together with, among others, a verified l) "Apprenticeship Agreement" is
lschemic Heart Disease, which was a have the original and exclusive jurisdiction undertaking by officers, directors and a contract wherein a prospective employer
manifestation of organ damage. Caseñas to hear and decide, within ninety partners that they will be jointly and binds himself to train the apprentice who in
likewise consulted two (2) other physicians (90)calendar days after the filing of the severally liable with the company over turn accepts the terms of training for a
who certified him to be suffering from complaint, the claims arising out of an claims arising from employer-employee recognized apprenticeable occupation
emphasizing the rights, duties and Section 5 privileges of employment. The following of his disability unless the employer can
responsibilities of each party; constitute acts of discrimination: prove that he impairs the satisfactory
Equal Opportunity for performance of the work involved to the
m) "Apprenticeable Occupation" Employment. — No disable person shall (a) Limiting, segregating or prejudice of the business entity: Provided,
is an occupation officially endorsed by a be denied access to opportunities for classifying a disabled job applicant in such however, That the employer first sought to
tripartite body and approved for suitable employment. A qualified disabled a manner that adversely affects his work provide reasonable accommodations for
apprenticeship by the Authority; employee shall be subject to the same opportunities; disabled persons;
terms and conditions of employment and
n) "Learners" refer to persons the same compensation, privileges, (b) Using qualification standards, (h) Failing to select or administer
hired as trainees in semi-skilled and other benefits, fringe benefits, incentives or employment tests or other selection in the most effective manner employment
industrial occupations which are non- allowances as a qualified able bodied criteria that screen out or tend to screen tests which accurately reflect the skills,
apprenticeable. Learnership programs person. out a disabled person unless such aptitude or other factor of the disabled
must be approved by the Authority. standards, tests or other selection criteria applicant or employee that such tests
Five percent (5%) of all casual are shown to be job-related for the position purports to measure, rather than the
R.A. No. 7277 (Magna Carta for Persons emergency and contractual positions in in question and are consistent with impaired sensory, manual or speaking
with Disability) the Departments of Social Welfare and business necessity; skills of such applicant or employee, if any;
Development; Health; Education, Culture and
Section 4 and Sports; and other government (c) Utilizing standards, criteria, or
agencies, offices or corporations engaged methods of administration that: (i) Excluding disabled persons
(a.) Disabled persons are those in social development shall be reserved for from membership in labor unions or similar
suffering from restriction or different disabled persons. (1) have the effect of organizations.
abilities, as a result of a mental, physical discrimination on the basis of disability; or
or sensory impairment, to perform an Section 7 (2) perpetuate the discrimination R.A. No. 9231 amending R.A. No. 7610
activity in the manner or within the range of others who are subject to common
considered normal for a human being. Apprenticeship. — Subject to the administrative control. Section 2. Section 12 of the same Act, as
provisions of the Labor Code as amended, amended, is hereby further amended to
(b.) Impairment is any loss, disabled persons shall be eligible as (d) Providing less compensation, read as follows:
diminution or aberration of psychological, apprentices or learners: Provided, That such as salary, wage or other forms of
physiological, or anatomical structure or their handicap is not as much as to remuneration and fringe benefits, to a "Sec. 2. Employment of
function effectively impede the performance of job qualified disabled employee, by reason of Children - Children below fifteen
(c.) Disability shall mean 1) a operations in the particular occupation for his disability, than the amount to which a (15) years of age shall not be
physical or mental impairment that which they are hired; Provided, further, non-disabled person performing the same employed except:
substantially limits one or more That after the lapse of the period of work is entitled;
psychological, physiological or anatomical apprenticeship, if found satisfactory in the "1) When a child works
function of an individual or activities of job performance, they shall be eligible for (e) Favoring a non-disabled directly under the sole
such individual; 2) a record of such an employment. employee over a qualified disabled responsibility of his/her
impairment; or 3) being regarded as employee with respect to promotion, parents or legal
having such an impairment. Section 32 training opportunities, study and guardian and where only
scholarship grants, solely on account of members of his/her
(d.) Handicap refers to a Discrimination on Employment. the latter's disability; family are
disadvantage for a given individual, — No entity, whether public or private, employed: Provided,
resulting from an impairment or a disability, shall discriminate against a qualified (f) Re-assigning or transferring a however, That his/her
that limits or prevents the function or disabled person by reason of disability in disabled employee to a job or position he employment neither
activity, that is considered normal given regard to job application procedures, the cannot perform by reason of his disability; endangers his/her life,
the age and sex of the individual. hiring, promotion, or discharge of safety, health, and
employees, employee compensation, job (g) Dismissing or terminating the morals, nor impairs
training, and other terms, conditions, and services of a disabled employee by reason his/her normal
development: Provided, child's education or skills acquisition and
further, That the parent exploitation or Section 3. The same Act, as amended, is secondarily to the collective
or legal guardian shall discrimination hereby further amended by adding new needs of the
provide the said child taking into sections to be denominated as Sections family: Provided, That not more
with the prescribed account the 12-A, 12-B, 12-C, and 12-D to read as than twenty percent (20%) of the
primary and/or system and follows: child's income may be used for
secondary education; or level of the collective needs of the family.
remuneration, "Sec. 2-A. Hours of Work of a
"2) Where a child's and the Working Child. - Under the "The income of the working child
employment or duration and exceptions provided in Section 12 and/or the property acquired
participation in public arrangement of of this Act, as amended: through the work of the child shall
entertainment or working time; be administered by both parents.
information through and "(1) A child below fifteen (15) In the absence or incapacity of
cinema, theater, radio, "(c) The years of age may be allowed to either of the parents, the other
television or other forms employer shall work for not more than twenty parent shall administer the same.
of media is formulate and (20) hours a week: Provided, In case both parents are absent
essential: Provided, That implement, That the work shall not be more or incapacitated, the order of
the employment contract subject to the than four (4) hours at any given preference on parental authority
is concluded by the approval and day; as provided for under the Family
child's parents or legal supervision of Code shall apply.
guardian, with the competent "(2) A child fifteen (15) years of
express agreement of authorities, a age but below eighteen (18) shall "Sec. 12-C. Trust Fund to
the child concerned, if continuing not be allowed to work for more Preserve Part of the Working
possible, and the program for than eight (8) hours a day, and in Child's Income. - The parent or
approval of the training and no case beyond forty (40) hours a legal guardian of a working child
Department of Labor skills week; below eighteen (18) years of age
and acquisition of shall set up a trust fund for at
Employment: Provided, the child. "(3) No child below fifteen (15) least thirty percent (30%) of the
further, That the years of age shall be allowed to earnings of the child whose
following requirements "In the above- work between eight o'clock in the wages and salaries from work
in all instances are exceptional cases where evening and six o'clock in the and other income amount to at
strictly complied with: any such child may be morning of the following day and least two hundred thousand
employed, the employer no child fifteen (15) years of age pesos (P200,000.00) annually, for
"(a) The shall first secure, before but below eighteen (18) shall be which he/she shall render a semi-
employer shall engaging such child, a allowed to work between ten annual accounting of the fund to
ensure the work permit from the o'clock in the evening and six the Department of Labor and
protection, Department of Labor o'clock in the morning of the Employment, in compliance with
health, safety, and Employment which following day." the provisions of this Act. The
morals and shall ensure observance child shall have full control over
normal of the above "Sec. 12-B. Ownership, Usage the trust fund upon reaching the
development of requirements. and Administration of the age of majority.
the child; Working Child's Income. - The
"(b) The "For purposes of this wages, salaries, earnings and "Sec. 12-D. Prohibition Against
employer shall Article, the term "child" other income of the working child Worst Forms of Child Labor. - No
institute shall apply to all persons shall belong to him/her in child shall be engaged in the
measures to under eighteen (18) ownership and shall be set aside worst forms of child labor. The
prevent the years of age." primarily for his/her support, phrase "worst forms of child
labor" shall refer to any of the intrinsic worth strength or other parasites;
following: and dignity of a contortion, or or
child as a which requires
"(1) All forms of slavery, human being; the manual "i) Involves the
as defined under the or transport of manufacture or
"Anti-trafficking in heavy loads; or handling of
Persons Act of 2003", or "b) Exposes explosives and
practices similar to the child to "f) Is performed other
slavery such as sale and physical, in an unhealthy pyrotechnic
trafficking of children, emotional or environment products."
debt bondage and sexual abuse, exposing the
serfdom and forced or or is found to child to 2.
compulsory labor, be highly hazardous Requirements/Effect of invalid
including recruitment of stressful working agreement
children for use in psychologically conditions,
armed conflict; or or may elements, Century Canning Corp. vs. CA, G.R. No.
prejudice substances, 152894, August 17, 2007, Carpio, J.
"(2) The use, procuring, morals; or co-agents or
offering or exposing of a processes FACTS: Gloria Palad was hired as an
child for prostitution, for "c) Is involving apprentice as fish cleaner. Apprenticeship
the production of performed ionizing, agreement was executed and enforced on
pornography or for underground, radiation, fire, July 17, 1997. The said agreement was
pornographic underwater or flammable submitted for approval on July 25, 1997
performances; or at dangerous substances, and approved by TESDA on September
heights; or noxious 26, 1997.
"(3) The use, procuring components
or offering of a child for "d) Involves the and the like, or ISSUE: Is the apprenticeship agreement
illegal or illicit activities, use of to extreme valid?
including the production dangerous temperatures,
and trafficking of machinery, noise levels, or HELD: No. Republic Act No. 7796 (RA
dangerous drugs and equipment and vibrations; or 7796), which created the TESDA, has
volatile substances tools such as transferred the authority over
prohibited under existing power-driven or "g) Is apprenticeship programs from the Bureau
laws; or explosive performed of Local Employment of the DOLE to the
power-actuated under TESDA. RA 7796 emphasizes TESDA’s
"(4) Work which, by its tools; or particularly approval of the apprenticeship program as
nature or the difficult a pre-requisite for the hiring of
circumstances in which "e) Exposes conditions; or apprentices.
it is carried out, is the child to "h) Exposes
hazardous or likely to be physical the child to In this case, the apprenticeship
harmful to the health, danger such biological agreement was entered into between the
safety or morals of as, but not agents such as parties before petitioner filed its
children, such that it: limited to the bacteria, fungi, apprenticeship program with the TESDA
dangerous viruses, for approval. Petitioner and Palad
"a) Debases, feats of protozoans, executed the apprenticeship agreement on
degrades or balancing, nematodes and 17 July 1997 wherein it was stated that the
demeans the physical training would start on 17 July 1997 and
would end approximately in December Since Palad is not considered an expiration of the first agreement and the Labor Code and the Magna Carta for
1997. On 25 July 1997, petitioner apprentice because the apprenticeship retention of the employees, Atlanta had, to Disabled Persons, indubitably show that
submitted for approval its apprenticeship agreement was enforced before the all intents and purposes, recognized the the petitioners, except sixteen of them,
program, which the TESDA subsequently TESDA’s approval of petitioner’s completion of their training and their should be deemed regular employees. As
approved on 26 September 1997. Clearly, apprenticeship program, Palad is deemed acquisition of a regular employee status. such, they have acquired legal rights that
the apprenticeship agreement was a regular employee performing the job of a To foist upon them the second this Court is duty-bound to protect and
enforced even before the TESDA "fish cleaner." Clearly, the job of a "fish apprenticeship agreement for a second uphold, not as a matter of compassion but
approved petitioner’s apprenticeship cleaner" is necessary in petitioner’s skill which was not even mentioned in the as a consequence of law and justice.
program. Thus, the apprenticeship business as a tuna and sardines factory. agreement itself, is a violation of the Labor
agreement is void because it lacked prior Under Article 280 of the Labor Code, an Code’s implementing rules and is an act The uniform employment
approval from the TESDA. employment is deemed regular where the manifestly unfair to the employees, to say contracts of the petitioners stipulated that
employee has been engaged to perform the least. This we cannot allow. they shall be trained for a period of one
The TESDA’s approval of the activities which are usually necessary or month, after which the employer shall
employer’s apprenticeship program is desirable in the usual business or trade of 3. Disabled determine whether or not they should be
required before the employer is allowed to the employer. persons attaining regular status allowed to finish the 6-month term of the
hire apprentices. Prior approval from the contract. Furthermore, the employer may
TESDA is necessary to ensure that only Atlanta Industries, Inc. vs. Sebolino, Bernardo vs. NLRC, G.R. No. 122917, terminate the contract at any time for a just
employers in the highly technical G.R. No. 187320, January 26, 2011, July 12, 1999, Panganiban, J. (*This was and reasonable cause. Unless renewed in
industries may employ apprentices and Brion, J. asked in the 2016 Jurist Mock Bar but the writing by the employer, the contract shall
only in apprenticeable occupations. Thus, facts are twisted) automatically expire at the end of the term.
under RA 7796, employers can only hire Doctrine. The fact that Costales,
apprentices for apprenticeable Almoite, Sebolino and Sagun were already FACTS: Complainants numbering 43 are The stipulations in the
occupations which must be officially rendering service to the company when deaf-mutes who were hired on various employment contracts indubitably conform
endorsed by a tripartite body and they were made to undergo apprenticeship periods from 1988 to 1993 by respondent with Article 80 of the Labor Code.
approved for apprenticeship by the (as established by the evidence) renders Far East Bank and Trust Co. as Money Succeeding events and the enactment of
TESDA. This is to ensure the protection of the apprenticeship agreements irrelevant Sorters and Counters through a uniformly RA No. 7277 (the Magna Carta for
apprentices and to obviate possible as far as the four are concerned. This worded agreement called "Employment Disabled Persons), however, justify the
abuses by prospective employers who reality is highlighted by the CA finding that Contract for Handicapped Workers". Their application of Article 280 of the Labor
may want to take advantage of the lower the respondents occupied positions such employments were renewed every six Code.
wage rates for apprentices and circumvent as machine operator, scaleman and months such that by the time this case
the right of the employees to be secure in extruder operator - tasks that are usually arose, there were fifty-six (56) deaf-mutes Respondent bank entered into
their employment. necessary and desirable in Atlanta’s usual who were employed by respondent under the aforesaid contract with a total of 56
The requisite TESDA approval of the business or trade as manufacturer of the said employment agreement. handicapped workers and renewed the
apprenticeship program prior to the hiring plastic building materials. These tasks and contracts of 37 of them. In fact, two of
of apprentices was further emphasized by their nature characterized the four as ISSUE: Whether or not the complainants them worked from 1988 to 1993. Verily, the
the DOLE with the issuance of Department regular employees under Article 280 of the are regular employees. renewal of the contracts of the
Order No. 68-04 on 18 August 2004. Labor Code. Thus, when they were handicapped workers and the hiring of
Department Order No. 68-04, which dismissed without just or authorized HELD: Yes. At the outset, let it be known others lead to the conclusion that their
provides the guidelines in the cause, without notice, and without the that this Court appreciates the nobility of tasks were beneficial and necessary to the
implementation of the Apprenticeship and opportunity to be heard, their dismissal private respondent's effort to provide bank. More important, these facts show
Employment Program of the government, was illegal under the law. employment to physically impaired that they were qualified to perform the
specifically states that no enterprise shall individuals and to make them more responsibilities of their positions. In other
be allowed to hire apprentices unless Even if we recognize the productive members of society. However, words, their disability did not render them
its apprenticeship program is company’s need to train its employees we cannot allow it to elude the legal unqualified or unfit for the tasks assigned
registered and approved by TESDA. through apprenticeship, we can only consequences of that effort, simply to them.
consider the first apprenticeship because it now deems their employment
agreement for the purpose. With the irrelevant. The facts, viewed in light of the
 In this light, the Magna Carta for dismissed and therefore entitled to back Title I, Book
Disabled Persons mandates that a wages and reinstatement without loss of III, Rule I, Sec. 2(b) and (c), Omnibus 1) Their primary duty consists of
qualified disabled employee should be seniority rights and other Rules management of the
given the same terms and conditions of privileges. Considering the allegation of establishment in which they are
employment as a qualified able-bodied respondent that the job of money sorting is a. employed or of a department or
person as provided for in Section 5 of the no longer available because it has been Test of managerial/supervisory status subdivision thereof;
said law. assigned back to the tellers to whom it
originally belonged, petitioners are hereby Clientologic Philippines, Inc. vs. 2) They customarily and regularly
The fact that the employees were awarded separation pay in lieu of Castro, G.R. No. 186070, April 11, 2011, direct the work of two or more
qualified disabled persons necessarily reinstatement. Nachura, J. employees therein;
removes the employment contracts from
the ambit of Article 80. Since the Magna Brent ruling is not applicable. FACTS: Benedict Castro was employed 3) They have the authority to hire
Carta accords them the rights of qualified The term limit in the contract was by ClientLogic Philippines, Inc. (now or fire other employees of lower
able-bodied persons, they are thus premised on the fact that the petitioners known and shall hereafter be referred to rank; or their suggestions and
covered by Article 280 of the Labor Code. were disabled, and that the bank had to as SITEL) as a call center agent for its Bell recommendations as to the hiring
determine their fitness for the position. South Account. After six (6) months, he and firing and as to the promotion
Without a doubt, the task of Indeed, its validity is based on Article 80 of was promoted to the "Mentor" position, or any other change of status of
counting and sorting bills is necessary and the Labor Code. But as noted earlier, and thereafter to the "Coach" position. A other employees are given
desirable to the business of respondent petitioners proved themselves to "Coach" is a team supervisor who is in particular weight.
bank. With the exception of sixteen of be qualified disabled persons who, under charge of dealing with customer
them, petitioners performed these tasks the Magna Carta for Disabled Persons, complaints which cannot be resolved by They are considered as officers
for more than six months. are entitled to terms and conditions of call center agents. or members of a managerial staff if they
employment enjoyed by qualified able- perform the following duties and
As held by the Court, "Articles bodied individuals; hence, Article 80 does ISSUE: Is Castro a supervisor? responsibilities:
280 and 281 of the Labor Code put an end not apply because petitioners 1) The primary duty consists of
to the pernicious practice of making are qualified for their positions. The HELD: No. Article 82 of the Labor Code the performance of work directly
permanent casuals of our lowly employees validation of the limit imposed on their states that the provisions of the Labor related to management of
by the simple expedient of extending to contracts, imposed by reason of their Code on working conditions and rest policies of their employer;
them probationary appointments, ad disability, was a glaring instance of the periods shall not apply to managerial
infinitum." The contract signed by very mischief sought to be addressed by employees. Generally, managerial 2) Customarily and regularly
petitioners is akin to a probationary the new law. employees are not entitled to overtime pay exercise discretion and
employment, during which the bank for services rendered in excess of eight independent judgment;
determined the employees' fitness for the G. Book Three (Conditions of hours a day.
job. When the bank renewed the contract Employment) 3) (i) Regularly and directly assist
after the lapse of the six-month Article 212 (m) of the Labor Code a proprietor or a managerial
probationary period, the employees 1. Title I, Chapter I, defines a managerial employee as "one employee whose primary duty
thereby became regular employees. No Arts. 82-90 who is vested with powers or prerogatives consists of management of the
employer is allowed to determine to lay down and execute management establishment in which he is
indefinitely the fitness of its employees. a. Coverage policies and/or to hire, transfer, suspend, employed or subdivision thereof;
(Art. 82) lay-off, recall, discharge, assign or or (ii) execute under general
As regular employees, the discipline employees, or to effectively supervision work along
twenty-seven petitioners are entitled to i. recommend such managerial actions. specialized or technical lines
security of tenure; that is, their services Managerial employees vs. Managerial requiring special training,
may be terminated only for a just or Staff/Supervisors Employees are considered experience, or knowledge; or (iii)
authorized cause. Because respondent occupying managerial positions if they execute, under general
failed to show such cause, these twenty- meet all of the following conditions, supervision, special assignment
seven petitioners are deemed illegally namely: and tasks xxx.
 1) The primary duty consists of e. Advise HR Manager on the performance of certain rank-and-file
(Respondent’s) duties do not fall the performance of work directly state of discipline in their employees of the branch.
under any of the categories enumerated related to management of respective departments;
above. His work is not directly related to policies of their employer; problems, if any, and recommend Petitioner holds a managerial
management policies. Even the solution(s) and corrective status since she is tasked to act in the
circumstances shown by the instant case 2) Customarily and regularly action(s). interest of her employer as she exercises
reveal that (respondent) does not regularly exercise discretion and independent judgment when she approves
exercise discretion and independent independent judgment; As correctly observed by the CA pre-termination of USD CDs or the
judgment. (Petitioners) submitted a list of and the LA, these duties clearly pertained withdrawal of deposits. In fact, petitioner
the responsibilities of "HR 3) (i) Regularly and directly assist to "Division Managers/Department admitted the exercise of independent
Manager/Supervisor" and "Division a proprietor or a managerial Managers/ Supervisors," which judgment when she explained that as
Manager/Department employee whose primary duty respondent was not, as he was merely a regards the pre-termination of the USD
Manager/Supervisors" but these do not consists of management of the team supervisor. Petitioners themselves CDs of Uymatiao and Caluag, the
pertain to (respondent) who does not have establishment in which he is described respondent as "the superior of a transactions were approved on the basis
any of the said positions. He was just a employed or subdivision thereof; call center agent; he heads and guides a of her independent judgment that the
team Supervisor and not (an) HR or or (ii) execute under general specific number of agents, who form a signatures in all the documents presented
Department Supervisor. supervision work along team." to her by the traders matched, as shown in
specialized or technical lines her reply dated April 23, 2002 to
The test of "supervisory" or requiring special training, Cruz vs. BPI, G.R. No. 173357, February respondent's memorandum asking her to
"managerial status" depends on whether experience, or knowledge; or (iii) 13, 2013, Peralta, J. explain the unauthorized
a person possesses authority to act in the execute, under general preterminations/withdrawals of U.S. dollar
interest of his employer and whether such supervision, special assignment ISSUE: Is Cruz a manager? deposits in the BPI Ayala Avenue Branch.
authority is not merely routinary or clerical and tasks; and
in nature, but requires the use of 4) Who do not devote more than HELD: Yes. The test of "supervisory" or ii.
independent judgment. The position held 20 percent of their hours worked "managerial status" depends on whether a Field Personnel
by respondent and its concomitant duties in a workweek to activities which person possesses authority to act in the
failed to hurdle this test. are not directly and closely interest of his employer and whether such Title I, Book
related to the performance of the authority is not merely routinary or clerical III, Rule I, Sec. 2(f), Omnibus Rules
As a coach or team supervisor, work described in paragraphs (1), in nature, but requires the use of
respondent’s main duty was to deal with (2), and (3) above. independent judgment. DOLE
customer complaints which could not be Department Order No. 118-12 (Rules and
handled or solved by call center agents. If According to petitioners, In respondent's Position Regulations
the members of his team could not meet respondent also performed the following Paper before the NLRC and its Governing the
the needs of a customer, they passed the duties, as shown in the company’s Memorandum, respondent stated that the Employment and Working Conditions of
customer’s call to respondent. Statement of Policy on Discipline: responsibility of petitioner, among others, Drivers and
were as follows: (1) to maintain the Conductors in
This job description does not a. Know and understand in full integrity of the signature card files of the Public Utility Bus Transport
indicate that respondent can exercise the the Policy on Discipline including certificates of deposits and/or detect Industry)
powers and prerogatives equivalent to their underlying reasons. spurious signature cards in the same files;
managerial actions which require the b. Implement strictly and (2) to ensure that releases of original CDS David vs. Macasio, G.R. No. 195466,
customary use of independent judgment. consistently the Policy on are done only against valid considerations July 2, 2014, Brion, J.
There is no showing that he was actually Discipline. and made only to the legitimate depositors
conferred or was actually exercising the c. Ensure that the said Policy on or their duly authorized representatives; Doctrine. "Field personnel" shall
following duties attributable to a "member Discipline is communicated to (3) to approve payments or withdrawals of refer to non-agricultural employees who
of the managerial staff," viz.: and understood by all employees. deposits by clients to ensure that such regularly perform their duties away from
d. Monitor compliance by withdrawals are valid transactions of the the principal place of business or branch
employees with the said Policy. bank; and (4) to supervise the office of the employer and whose actual
hours of work in the field cannot be In one case, the SC held that the (c) Domestic work refers to work Section 23 (Possible Bar
determined with reasonable certainty. clause "whose time and performance is performed in or for a household or Problem)
unsupervised by the employer" did not households.
Based on the definition of field amplify but merely interpreted and Extent of Duty. – The domestic
personnel under Article 82, we agree with expounded the clause "whose actual (d) Domestic worker or worker and the employer may mutually
the CA that Macasio does not fall under hours of work in the field cannot be "Kasambahay" refers to any person agree for the former to temporarily perform
the definition of "field personnel." The CA’s determined with reasonable certainty." The engaged in domestic work within an a task that is outside the latter’s household
finding in this regard is supported by the former clause is still within the scope and employment relationship such as, but not for the benefit of another household.
established facts of this case: first, purview of Article 82 which defines field limited to, the following: general However, any liability that will be incurred
Macasio regularly performed his duties at personnel. Hence, in deciding whether or househelp, nursemaid or "yaya", cook, by the domestic worker on account of such
David’s principal place of business; not an employee's actual working hours in gardener, or laundry person, but shall arrangement shall be borne by the original
second, his actual hours of work could be the field can be determined with exclude any person who performs employer. In addition, such work
determined with reasonable certainty; and, reasonable certainty, query must be made domestic work only occasionally or performed outside the household shall
third, David supervised his time and as to whether or not such employee's time sporadically and not on an occupational entitle the domestic worker to an additional
performance of duties. Since Macasio and performance is constantly supervised basis. payment of not less than the existing
cannot be considered a "field personnel," by the employer. minimum wage rate of a domestic worker.
then he is not exempted from the grant of The term shall not include It shall be unlawful for the original
holiday, SIL pay even as he was engaged In the case at bar, during the children who are under foster family employer to charge any amount from the
on "pakyaw" or task basis. entire course of their fishing voyage, arrangement, and are provided access to said household where the service of the
fishermen employed by petitioner have no education and given an allowance domestic worker was temporarily
b. choice but to remain on board its vessel. incidental to education, i.e. "baon", performed.
Actual hours of work cannot be Although they perform non-agricultural transportation, school projects and school
determined with reasonable work away from petitioner's business activities. Remington Industrial vs. Castañeda,
offices, the fact remains that throughout G.R. No. 169295-96, November 20, 2006,
certainty the duration of their work they are under (e) Employer refers to any person Puno, J. (Possible Bar Problem)
the effective control and supervision of who engages and controls the services of
Mercidar Fishing Corp. vs. NLRC, G.R. petitioner through the vessel's patron or a domestic worker and is party to the FACTS: Erlinda Castañeda alleged that
No. 112574, October 8, 1998, Mendoza, master as the NLRC correctly held. employment contract. she started working in August 1983 as
J. company cook for Remington, a
iii. (f) Household refers to the corporation engaged in the trading
FACTS: Fermin Agao, Jr. had been Family members immediate members of the family or the business; that she worked for six (6) days
employed as a "bodegero" or ship's occupants of the house that are directly a week, starting as early as 6:00 a.m.
quartermaster of Mercidar. iv. provided services by the domestic worker. because she had to do the marketing and
Domestic servants/Persons in the would end at around 5:30 p.m., or even
ISSUE: Is Agao, Jr. a field personnel? personal service of Section 22 (Possible Bar later, after most of the employees, if not
Problem) all, had left the company premises; that
HELD: No. Petitioner argues essentially another she continuously worked with Remington
that since the work of private respondent Assignment to Nonhousehold until she was unceremoniously prevented
is performed away from its principal place Title I, Book Work. – No domestic worker shall be from reporting for work when Remington
of business, it has no way of verifying his III, Rule I, Sec. 2(f), Omnibus Rules assigned to work in a commercial, transferred to a new site in Edsa,
actual hours of work on the vessel. It industrial or agricultural enterprise at a Caloocan City.
contends that private respondent and R.A. No. 10361 (Domestic Workers Act wage rate lower than that provided for
other fishermen in its employ should be or Batas Kasambahay) agricultural or nonagricultural workers. In ISSUE: Is Erlinda a domestic helper?
classified as "field personnel" who have no such cases, the domestic worker shall be
statutory right to service incentive leave Section 4 paid the applicable minimum wage. HELD: No. Under Rule XIII, Section 1(b),
pay. Book 3 of the Labor Code, as amended,
the terms "househelper" or "domestic Petitioner contends that it is only performing such work could not be respondents, petitioners were paid on a
servant" are defined as follows: when the househelper or domestic servant considered an employee of the latter. The piece-work basis, according to the style of
is assigned to certain aspects of the determination of the existence of an suits they made. Regardless of the
"The term ‘househelper’ as used business of the employer that such employer-employee relationship is defined number of pieces they finished in a day,
herein is synonymous to the term househelper or domestic servant may be by law according to the facts of each case, they were each given a daily pay of at
‘domestic servant’ and shall refer to any considered as such an employee. The regardless of the nature of the activities least P64.0.
person, whether male or female, who Court finds no merit in making any such involved. Indeed, it would be the height of
renders services in and about the distinction. The mere fact that the injustice if we were to hold that despite the ISSUE: Are Lambo and Belocura
employer’s home and which services are househelper or domestic servant is fact that respondent was made to cook supervised employees?
usually necessary or desirable for the working within the premises of the lunch and merienda for the petitioner’s
maintenance and enjoyment thereof, and business of the employer and in relation to employees, which work ultimately HELD: Yes. There is no dispute that
ministers exclusively to the personal or in connection with its business, as in its redounded to the benefit of the petitioner petitioners were employees of private
comfort and enjoyment of the employer’s staffhouses for its guest or even for its corporation, she was merely a domestic respondents although they were paid not
family." officers and employees, warrants the worker of the family of Mr. Tan. on the basis of time spent on the job but
conclusion that such househelper or according to the quantity and the quality of
The foregoing definition clearly domestic servant is and should be We note the findings of the work produced by them. There are two
contemplates such househelper or considered as a regular employee of the NLRC, affirmed by the Court of Appeals, categories of employees paid by results:
domestic servant who is employed in the employer and not as a mere family that no less than the company’s corporate (1) those whose time and performance are
employer’s home to minister exclusively to househelper or domestic servant as secretary has certified that respondent is supervised by the employer. (Here, there
the personal comfort and enjoyment of the contemplated in Rule XIII, Section 1(b), a bonafide company employee; she had a is an element of control and supervision
employer’s family. Such definition covers Book 3 of the Labor Code, as amended. fixed schedule and routine of work and over the manner as to how the work is to
family drivers, domestic servants, laundry was paid a monthly salary be performed. A piece-rate worker belongs
women, yayas, gardeners, houseboys and In the case at bar, the petitioner of P4,000.00; she served with the to this category especially if he performs
similar househelps. itself admits in its position paper that company for 15 years starting in 1983, his work in the company premises.); and
xxx xxx xxx respondent worked at the company buying and cooking food served to (2) those whose time and performance are
premises and her duty was to cook and company employees at lunch unsupervised. (Here, the employer’s
The criteria is the personal prepare its employees’ lunch and merienda, and that this service was a control is over the result of the work.
comfort and enjoyment of the family of the and merienda. Clearly, the situs, as well as regular feature of employment with the Workers on pakyao and takay basis
employer in the home of said employer. the nature of respondent’s work as a cook, company. belong to this group.) Both classes of
While it may be true that the nature of the who caters not only to the needs of Mr. workers are paid per unit accomplished.
work of a househelper, domestic servant Tan and his family but also to that of the v. Piece-rate payment is generally practiced
or laundrywoman in a home or in a petitioner’s employees, makes her fall Workers paid by result in garment factories where work is done in
company staffhouse may be similar in squarely within the definition of a regular the company premises, while payment
nature, the difference in their employee under the doctrine enunciated in Sec. 8, Title I, on pakyao and takay basis is commonly
circumstances is that in the former the Apex Mining case. That she works Rule VII, Book III, Omnibus Rules observed in the agricultural industry, such
instance they are actually serving the within company premises, and that she as in sugar plantations where the work is
family while in the latter case, whether it is does not cater exclusively to the personal a. Categories performed in bulk or in volumes difficult to
a corporation or a single proprietorship comfort of Mr. Tan and his family, is quantify. Petitioners belong to the first
engaged in business or industry or any reflective of the existence of the Lambo vs. NLRC, G.R. No. 111042, category, i.e., supervised employees.
other agricultural or similar pursuit, service petitioner’s right of control over her October 26, 1999, Mendoza, J.
is being rendered in the staffhouses or functions, which is the primary indicator of In determining the existence of
within the premises of the business of the the existence of an employer-employee FACTS: Avelino Lambo and Vicente an employer-employee relationship, the
employer. In such instance, they are relationship. Belocura were employed as tailors by J.C. following elements must be considered:
employees of the company or employer in Tailor Shop and/or Johnny Co. They (1) the selection and engagement of the
the business concerned entitled to the Moreover, it is wrong to say that if worked from 8:00 a.m. to 7:00 p.m. daily, employee; (2) the payment of wages; (3)
privileges of a regular employee. the work is not directly related to the including Sundays and holidays. As in the the power of dismissal; and (4) the power
employer's business, then the person case of the other 100 employees of private to control the employee’s conduct. Of
these elements, the most important his employer, regardless of whether or not among which were the petition for full
criterion is whether the employer controls Sec. 3, DOLE D.O. No. 118-12 such hours are spent in productive labor or recognition of the right of COLLECTIVE
or has reserved the right to control the involve physical or mental exertion; bargaining, close shop and check off.
employee not only as to the result of the Hours of Work and Hours of During the pendency of the petition with
work but also as to the means and Rest. The normal work hours of driver and b.) An employee need not leave the CIR, the union declared a strike which
methods by which the result is to be conductor shall not exceed eight (8) hours the premises of the workplace in order that was ruled to be illegal. Hence, the union
accomplished. a day. his rest period shall not be counted, it filed a Constancia pertaining to the
being enough that he stops working, may unresolved demands. One of the
In this case, private respondents If the driver/conductor is required rest completely and may leave his unresolved demands is, "That the work
exercised control over the work of to work overtime, the maximum hours of workplace, to go elsewhere, whether performed in excess of eight (8) hours be
petitioners. As tailors, petitioners worked in work shall not exceed 12 hours in any 24- within or outside the premises of his paid an overtime pay of 50 per cent the
the company’s premises from 8:00 a.m. to hour period, subject to the overriding workplace; regular rate of pay, and that work
7:00 p.m. daily, including Sundays and safety and operational conditions of the performed on Sundays and legal holidays
holidays. The mere fact that they were public utility bus. c.) If the work performed was be paid double the regular rate of pay."
paid on a piece-rate basis does not negate necessary, ot it benefited the employer, or
their status as regular employees of Drivers and conductors shall be the employee could not abandon his work ISSUE: Is the definition for "hours of
private respondents. The term "wage" is entitled to rest periods of at least one (1) at the end of his normal working hours work" as presently applied to dryland
broadly defined in Art. 97 of the Labor hour, exclusive of meal breaks, within a because he had no replacement, all time laborers equally applicable to seamen? Or
Code as remuneration or earnings, 12-hour shift. spent for such work shall be considered as should a different criterion be applied by
capable of being expressed in terms of hours worked, if the work was with the virtue of the fact that the seamen’s
money whether fixed or ascertained on a i. knowledge of his employer or immediate employment is completely different in
time, task, piece or commission basis. Principles in determining hours worked supervisor; nature as well as in condition of work from
Payment by the piece is just a method of that of a dryland laborer?
compensation and does not define the Secs. 3-4, Title d.) The time during which an
essence of the relations. Nor does the fact I, Rule I, Book III, Omnibus Rules employee is inactive by reason of HELD: Petitioner questions the
that petitioners are not covered by the interruptions in his work beyond his control applicability to seamen of the
SSS affect the employer-employee Sec. 3. Hours worked. The shall be considered time either if the interpretation given to the phrase "hours of
relationship. following shall be considered as imminence of the resumption of work work" for the purpose of the Eight-Hour
compensable hours worked: requires the employee’s presence at the Labor Law, insinuating that although the
Indeed, the following factors place of work or if the interval is too brief seamen concerned stayed in petitioner’s
show that petitioners, although piece-rate a.) All time during which an to be utilized effectively and gainfully in the tugboats, or merely within its compound,
workers, were regular employees of employee is required to be on duty or to employee’s own interest. for 12 hours, yet their work was not
private respondents: (1) within the be at employer’s premises or to be at the continuous but interrupted or broken. It
contemplation of Art. 280 of the Labor prescribed workplace; and ii. has been the consistent stand of petitioner
Code, their work as tailors was necessary Engaged to wait rule/idle time that while it is true that the workers herein
or desirable in the usual business of b.) All time during which an were required to report for work at 6:00
private respondents, which is engaged in employee is suffered or permitted to work. Sec. 5(a), Rule a.m. and were made to stay up to 6:00
the tailoring business; (2) petitioners I, Book III, Omnibus Rules p.m., their work was not continuous and
worked for private respondents throughout Sec. 4. Principles in they could have left the premises of their
the year, their employment not being determining Hours Worked (memorize). Luzon Sevedoring Co. vs. Luzon Marine working place were it not for the inherent
dependent on a specific project or season; The following general principles shall Department Union, G.R. No. L-6265, physical impossibility peculiar to the nature
and, (3) petitioners worked for private govern in determining whether the time April 29, 1957, Felix, J. of their duty which prevented them from
respondents for more than one year. spent by an employee is considered hours leaving the tugboats. It is the Company’s
worked for purposes of this Rule: FACTS: Luzon Marine Department Union defense that a literal interpretation of what
b. Hours worked (Art. filed a petition with the Court of Industrial constitutes non-working hours would result
84, Labor Code; Sec. 3, DOLE DO No. a.) All hours are hours worked Relations containing several demands in absurdity if made to apply to seamen
118-12) which the employee is required to give to against Luzon Stevedoring Co., Inc., aboard vessels in bays and rivers, and We
are called upon to make an interpretation or boat. If these requisites are complied nevertheless credited the workers with That is why We brushed aside
of the law on "non-working hours" that with, the period of such rest shall not be eight hours of work for each shift and paid petitioner's contention in one case that
may comprehend within its embrace not counted. them for the same number of hours. workers who worked under a 6 a.m. to 6
only the non-working hours of laborers However, since 1953, whenever workers p.m. schedule had enough "free time" and
employed in land jobs, but also of that In the case at bar, We do not in one shift were required to continue therefore should not be credited with four
particular group of seamen, i.e., those need to look into the nature of the work of working until the next shift, petitioner hours of overtime and held that the finding
employed in vessels plying in rivers and claimant mariners to ascertain the truth of instead of crediting them with eight hours of the CIR "that claimants herein rendered
bays, since admittedly there is no need for petitioner’s allegation that this kind of of overtime work, has been paying them services to the Company from 6:00 a.m. to
such ruling with respect to officers and seamen have had enough "free time", a for six hours only. NDC argued that the 6:00 p.m. including Sundays and holidays,
crew of interisland vessels which have task of which We are relieved, for although two hours corresponding to the mealtime . . . implies either that they were not
aboard 2 shifts of said men and strictly after an ocular inspection of the working periods should not be included in allowed to leave the spot of their working
follow the 8-hour working period. premises of the seamen affected in this computing compensation. On the other place, or that they could not rest
case the trial Judge declared in his hand, National Textile Workers Union completely" (Luzon Stevedoring Co., Inc.
Section 1 of Commonwealth Act decision that the Company gave the whose members are employed at the v. Luzon Marine Department Union, et al.,
No. 444, known as the Eight-Hour Labor complaining laborers 3 free meals a day NDC, maintained the opposite view and G.R. No. L-9265, April 29, 1957).
Law, provides: “The legal working day for with a recess of 20 minutes after each asked the Court of Industrial Relations to
any person employed by another shall be meal, this decision was specifically order the payment of additional overtime Indeed, it has been said that no
of not more than eight hours daily. When amended by the Court en banc in its pay corresponding to the mealtime general rule can be laid down is to what
the work is not continuous, the time during Resolution of June 6, 1955, wherein it held periods. constitutes compensable work, rather the
which the laborer is not working AND CAN that the claimants herein rendered question is one of fact depending upon
LEAVE HIS WORKING PLACE and can services to the Company from 6:00 a.m. to ISSUE: Are mealtime breaks considered particular circumstances, to be determined
rest completely, shall not be counted.” 6:00 p.m. including Sundays and holidays, working time? by the controverted in cases. (31 Am.
which implies either that said laborers Jurisdiction Sec. 626 pp. 878.)
The requisites contained in this were not given any recess at all, or that HELD: Yes. The legal working day for
section are further implemented by they were not allowed to leave the spot of any person employed by another shall be In this case, the CIR's finding that
contemporary regulations issued by their working place, or that they could not of not more than eight hours daily. When work in the petitioner company was
administrative authorities (Sections 4 and rest completely. And such resolution being the work is not continuous, the time during continuous and did not permit employees
5 of Chapter III, Article 1, Code of Rules on a question essentially of fact, this Court which the laborer is not working and can and laborers to rest completely is not
and Regulations to Implement the is now precluded to review the same. leave his working place and can rest without basis in evidence and following our
Minimum Wage Law). completely shall not be counted. (Sec. 1, earlier rulings, shall not disturb the same.
National Development Co. vs. CIR, G.R. Com. Act No. 444, as amended.) Thus, the CIR found:
For the purposes of this case, We No. L-15422, November 30, 1962,
do not need to set for seamen a criterion Regala, J. It will be noted that, under the While it may be correct to say
different from that applied to laborers on law, the idle time that an employee may that it is well-high impossible for an
land, for under the provisions of the above FACTS: At the National Development spend for resting and during which he may employee to work while he is eating, yet
quoted section, the only thing to be done Co., a government-owned and controlled leave the spot or place of work though not under Section 1 of Com. Act No. 444 such
is to determine the meaning and scope of corporation, there were four shifts of work. the premises of his employer, is not a time for eating can be segregated or
the term "working place" used therein. As One shift was from 8 a.m. to 4 p.m., while counted as working time only where the deducted from his work, if the same is
We understand this term, a laborer need the three other shifts were from 6 a.m. to 2 work is broken or is not continuous. The continuous and the employee can leave
not leave the premises of the factory, shop p.m.; then from 2 p.m. to 10 p.m. and, determination as to whether work is his working place rest completely. The
or boat in order that his period of rest shall finally, from 10 p.m. to 6 a.m. In each shift, continuous or not is mainly one of fact time cards show that the work was
not be counted, it being enough that he there was a one-hour mealtime period, to which We shall not review as long as the continuous and without interruption. There
"cease to work", may rest completely and wit: From (1) 11 a.m. to 12 noon for those same is supported by evidence. (Sec. 15, is also the evidence adduced by the
leave or may leave at his will the spot working between 6 a.m. and 2 p.m. and Com. Act No. 103, as amended, Philippine petitioner that the pertinent employees can
where he actually stays while working, to from (2) 7 p.m. to 8 p.m. for those working Newspaper Guild v. Evening News, Inc., freely leave their working place nor rest
go somewhere else, whether within or between 2 p.m. and 10 p.m. Although 86 Phil. 303). completely. There is furthermore the
outside the premises of said factory, shop there was a one-hour mealtime, NDC aspect that during the period covered the
computation the work was on a 24-hour their rest and comfort which are conducive Comprehensive Medical Plan, provided
basis and previously stated divided into to more efficiency and better performance guidelines merely to ensure that the end In addition, the Court finds that
shifts. in their work. Since the employees are no result was achieved, but did not control the the schedule of work and the requirement
longer required to work during this one- means and methods by which respondent to be on call for emergency cases do not
From these facts, the CIR hour lunch break, there is no more need performed his assigned tasks. The NLRC amount to such control, but are necessary
correctly concluded that work in petitioner for them to be compensated for this affirmed the findings of the Labor Arbiter incidents to the Retainership Agreement.
company was continuous and therefore period. We agree with the Labor Arbiter and stated that it is precisely because the
the mealtime breaks should be counted as that the new work schedule fully complies company lacks the power of control that The Court also notes that the
working time for purposes of overtime with the daily work period of eight (8) the contract provides that respondent shall Retainership Agreement granted to both
compensation. hours without violating the Labor be directly responsible to the employee parties the power to terminate their
Code. Besides, the new schedule applies concerned and their dependents for any relationship upon giving a 30-day notice.
iii. to all employees in the factory similarly injury, harm or damage caused through Hence, petitioner company did not wield
On call situated whether they are union members professional negligence, incompetence or the sole power of dismissal or termination.
or not. other valid causes of action.
Sec. 5(b), Rule Opulencia Ice Plant & Storage vs.
I, Book III, Omnibus Rules Coca-Cola Bottlers, Inc. vs. Climaco, The Labor Arbiter also correctly NLRC, G.R. No. L-98368, December 15,
G.R. No. 146881, February 5, 2007, found that the provision in the Retainer 1993, Bellosillo, J.
Sime Darby Philippines, Inc. vs. NLRC, Azcuna, J. Agreement that respondent was on call
G.R. No. 119205, April 15, 1998, during emergency cases did not make him FACTS: Manuel P. Esita was for twenty
Bellosillo, J. FACTS: Dr. Dean N. Climaco is a medical a regular employee. He explained, thus: (20) years a compressor operator of
doctor who was hired by petitioner Coca- Tiongson Ice Plant in San Pablo City. In
ISSUE: Is the change in the work Cola Bottlers Phils., Inc. by virtue of a Likewise, the allegation of 1980 he was hired as compressor
schedule and discontinuance of the 30- Retainer Agreement. complainant that since he is on call at operator-mechanic for the ice plants of
minute paid "on call" lunch break proper? anytime of the day and night makes him a petitioner Dr. Melchor Opulencia located in
ISSUE: Is Dr. Climaco a regular regular employee is off-tangent. Tanauan, Batangas, and Calamba,
HELD: Yes. The right to fix the work employee? Complainant does not dispute the fact that Laguna. Initially assigned at the ice plant
schedules of the employees rests outside of the two (2) hours that he is in Tanauan, Esita would work from seven
principally on their employer. In the instant HELD: No. The Court agrees with the required to be at respondent company’s o'clock in the morning to five o'clock in the
case petitioner, as the employer, cites as finding of the Labor Arbiter and the NLRC premises, he is not at all further required afternoon receiving a daily wage of
reason for the adjustment the efficient that the circumstances of this case show to just sit around in the premises and wait P35.00. In 1986, Esita was transferred to
conduct of its business operations and its that no employer-employee relationship for an emergency to occur so as to enable the ice plant in Calamba, which was then
improved production. It rationalizes that exists between the parties. The Labor him from using such hours for his own undergoing overhauling, taking the place
while the old work schedule included a 30- Arbiter and the NLRC correctly found that benefit and advantage. In fact, of compressor operator Lorenzo Eseta,
minute paid lunch break, the employees petitioner company lacked the power of complainant maintains his own private who was relieved because he was already
could be called upon to do jobs during that control over the performance by clinic attending to his private practice in old and weak. For less than a month, Esita
period as they were "on call." Even if respondent of his duties. The Labor Arbiter the city, where he services his patients, helped in the construction-remodeling of
denominated as lunch break, this period reasoned that the Comprehensive Medical bills them accordingly -- and if it is an Dr. Opulencia's house. For demanding the
could very well be considered as working Plan, which contains the respondent’s employee of respondent company who is correct amount of wages due him, Esita
time because the factory employees were objectives, duties and obligations, does attended to by him for special treatment was dismissed from service. One of the
required to work if necessary and were not tell respondent "how to conduct his that needs hospitalization or operation, issues that boils down is the existence of
paid accordingly for working. With the new physical examination, how to immunize, or this is subject to a special billing. More employer-employee relationship. The
work schedule, the employees are now how to diagnose and treat his patients, often than not, an employee is required to petitioners point out that even
given a one-hour lunch break without any employees of [petitioner] company, in each stay in the employer’s workplace or granting arguendo that Esita was indeed a
interruption from their employer. For a full case." proximately close thereto that he cannot mechanic, he could never be a regular
one-hour undisturbed lunch break, the utilize his time effectively and gainfully for employee because his presence would be
employees can freely and effectively use The Labor Arbiter held that his own purpose. Such is not the required only when there was a need for
this hour not only for eating but also for petitioner company, through the prevailing situation here. repair.
 and materials. All these activities take 30 the proceedings attendant thereto are not HELD: Yes. It is beyond dispute that the
ISSUE: Is the argument of petitioners minutes to accomplish. infected with complexities as to deprive petitioner’s members are full-time
correct? the workers the time to attend to other employees receiving their monthly salaries
ISSUE: Is the assembly time personal pursuits. They are not new irrespective of the number of working days
HELD: No. This circumstance cannot compensable? employees as to require the company to or teaching hours in a month. However,
affect the regular status of employment of deliver long briefings regarding their they find themselves in a most peculiar
Esita. An employee who is required to HELD: No. Respondent avers that the respective work assignments. Their situation whereby they are forced to go on
remain on call in the employer's premises instant complaint is not new, the very houses are situated right on the area leave during semestral breaks. These
or so close thereto that he cannot use the same claim having been brought against where the farm are located, such that after semestral breaks are in the nature of work
time effectively and gainfully for his own herein respondent by the same group of the roll call, which does not necessarily interruptions beyond the employees’
purpose shall be considered as working rank and file employees in the case of require the personal presence, they can control. The duration of the semestral
while on call. In sum, the determination of Associated Labor Union and Standard go back to their houses to attend to some break varies from year to year dependent
regular and casual employment is not Fruit Corporation which was filed way back chores. In short, they are not subject to the on a variety of circumstances affecting at
affected by the fact that the employee's April 27, 1976 when ALU was the absolute control of the company during times only the private respondent but at
regular presence in the place of work is bargaining agent of respondent's rank and this period, otherwise, their failure to report other times all educational institutions in
not required, the more significant file workers. The said case involved a in the assembly time would justify the the country. As such, these breaks cannot
consideration being that the work of the claim for "waiting time", as the company to impose disciplinary measures. be considered as absences within the
employee is usually necessary or complainants purportedly were required to The CBA does not contain any provision to meaning of the law for which deductions
desirable in the business of the employer. assemble at a designated area at least 30 this effect; the record is also bare of any may be made from monthly allowances.
More importantly, Esita worked for 9 years minutes prior to the start of their scheduled proof on this point. This, therefore, The "No work, no pay" principle does not
and, under the Labor Code, "any working hours "to ascertain the work force demonstrates the indubitable fact that the apply in the instant case. The petitioner’s
employee who has rendered at least one available for the day by means of a roll thirty (30)-minute assembly time was not members received their regular salaries
year of service, whether such service is call, for the purpose of assignment or primarily intended for the interests of the during this period. It is clear from the
continuous or broken, shall be considered reassignment of employees to such areas employer, but ultimately for the employees aforequoted provision of law that it
a regular employee with respect to that in the plantation where they are most to indicate their availability or non- contemplates a "no work" situation where
activity in which he is employed . . . ." needed." availability for work during every working the employees voluntarily absent
day. themselves. Petitioners, in the case at bar,
iv. Noteworthy is the decision of the certainly do not, ad voluntatem, absent
Assembly time Minister of Labor, on May 12, 1978 in the v. themselves during semestral breaks.
aforecited case (Associated Labor Union Commuting time, travel time at Rather, they are constrained to take
Arica vs. NLRC, G.R. No. 78210, vs. Standard (Phil.) Fruit Corporation lectures, seminars, etc. mandatory leave from work. For this they
February 28, 1989, Paras, J. where significant findings of facts and cannot be faulted nor can they be
conclusions had already been made on Sec. 6, Rule I, begrudged that which is due them under
FACTS: The preliminary activities in the the matter. Book III, Omnibus Rules the law. To a certain extent, the private
assembly area are as follows: (a.) First respondent can specify dates when no
there is the roll call. This is followed by The Minister of Labor held: The vi. classes would be held. Surely, it was not
getting their individual work assignments thirty (30)-minute assembly time long Semestral break the intention of the framers of the law to
from the foreman; (b.) Thereafter, they are practiced and institutionalized by mutual allow employers to withhold employee
individually required to accomplish the consent of the parties under Article IV, University of Pangasinan Faculty Union benefits by the simple expedient of
Laborer's Daily Accomplishment Report Section 3, of the Collective Bargaining vs. University of Pangasinan, G.R. No. unilaterally imposing "no work" days and
during which they are often made to Agreement cannot be considered as L-63122, February 20, 1984, Gutierrez, consequently avoiding compliance with the
explain about their reported waiting time within the purview of Section J. mandate of the law for those days.
accomplishment the following day; (c.) 5, Rule I, Book III of the Rules and
Then they go to the stockroom to get the Regulations Implementing the Labor ISSUE: Are the faculty members entitled It is evident that the intention of
working materials, tools and equipment; Code. ... Furthermore, the thirty (30)- to ECOLA during semestral breaks? the law is to grant ECOLA upon the
and (d.) Lastly, they travel to the field minute assembly is a deeply- rooted, payment of basic wages. Hence, we have
bringing with them their tools, equipment routinary practice of the employees, and the principle of "No pay, no ECOLA" the
converse of which finds application in the semester’s requirements. Furthermore, we best be alleviated. To submit to the viii.
case at bar. Petitioners cannot be may also by analogy apply the principle respondents’ interpretation of the no work, Exceptions to 8-hour rule (Art. 89)
considered to be on leave without pay so enunciated in the Omnibus Rules no pay policy is to defeat this noble
as not to be entitled to ECOLA, for, as Implementing the Labor Code to wit: purpose. The Constitution and the law ix.
earlier stated, the petitioners were paid mandate otherwise. Compressed work week
their wages in full for the months of Sec. 4. Principles in
November and December of 1981, Determining Hours Worked. — The vii. DOLE
notwithstanding the intervening semestral following general principles shall govern in Power interruptions/brownout Advisory No. 02, December 2, 2004
break. This, in itself, is a tacit recognition determining whether the time spent by an
of the rather unusual state of affairs in employee is considered hours worked for DOLE Policy x.
which teachers find themselves. Although purposes of this Rule: Instruction No. 36 (see Durabuilt Flexible schedule for solo parents
said to be on forced leave, professors and x x x Recapping Plant &
teachers are, nevertheless, burdened with "(d) The time during which Company vs. R.A. No. 8972 (Solo Parents Act of
the task of working during a period of time an employee is inactive by reason of NLRC) 2000)
supposedly available for rest and private interruptions in his work beyond his control
matters. There are papers to correct, shall be considered time either if the Durabuilt Recapping Plant & Company Section 3. Definition of Terms. -
students to evaluate, deadlines to meet, imminence of the resumption of work vs. NLRC, G.R. No. 76746, July 27, Whenever used in this Act, the following
and periods within which to submit grading requires the employee’s presence at the 1987, Gutierrez, J. terms shall mean as follows:
reports. Although they may be considered place of work or if the interval is too brief
by the respondent to be on leave, the to be utilized effectively and gainfully in the FACTS: To alleviate the situation, the (a) "Solo parent" - any individual
semestral break could not be used employee’s own interest." government thru the Ministry of Trade and who falls under any of the
effectively for the teacher’s own purposes Industry called on the industrial sector to following categories:
for the nature of a teacher’s job imposes The petitioner’s members in the resort to the so-called Voluntary Loan
upon him further duties which must be case at bar, are exactly in such a situation. Curtailment Plan (or VLCP), whereby (1) A woman who gives
done during the said period of time. The semestral break scheduled is an brownouts or electrical power interruption birth as a result of rape
Learning is a never ending process. interruption beyond petitioner’s control and was scheduled by area. The program and other crimes against
Teachers and professors must keep it cannot be used "effectively nor gainfully while it may have been called “voluntary" chastity even without a
abreast of developments all the time. in the employee’s interest’. Thus, the was not so as electrical power consumers final conviction of the
Teachers cannot also wait for the opening semestral break may also be considered had no choice then due to the prevailing offender: Provided, That
of the next semester to begin their work. as "hours worked." For this, the teachers energy crisis. the mother keeps and
Arduous preparation is necessary for the are paid regular salaries and, for this, they raises the child;
delicate task of educating our children. should be entitled to ECOLA. Not only do ISSUE: Is the period during power
Teaching involves not only an application the teachers continue to work during this interruption compensable? (2) Parent left solo or
of skill and an imparting of knowledge, but short recess but much less do they cease alone with the
a responsibility which entails self to live for which the cost of living HELD: It depends. Moreover, as early as responsibility of
dedication and sacrifice. The task of allowance is intended. The legal principles May 1978, the Ministry of Labor and parenthood due to death
teaching ends not with the perceptible of "No work, no pay; No pay, no ECOLA" Employment, thru Policy Instruction No. of spouse;
efforts of the petitioner’s members but must necessarily give way to the purpose 36, has said that — 2. Brownouts running
goes beyond the classroom: a continuum of the law to augment the income of for more than twenty minutes may not be (3) Parent left solo or
where only the visible labor is relieved by employees to enable them to cope with treated as hours worked provided that any alone with the
academic intermissions. It would be most the harsh living conditions brought about of the following conditions are present; (a.) responsibility of
unfair for the private respondent to by inflation; and to protect employees and The employees can leave their work place parenthood while the
consider these teachers as employees on their wages against the ravages brought or go elsewhere whether within or without spouse is detained or is
leave without pay to suit its purposes and, by these conditions. Significantly, it is the the work premises; or (b.) The employees serving sentence for a
yet, in the meantime, continue availing of commitment of the State to protect labor can use the time effectively for their own criminal conviction for at
their services as they prepare for the next and to provide means by which the interest. least one (1) year;
semester or complete all of the last difficulties faced by the working force may
(4) Parent left solo or them or give them up to above requirements from the DOLE on explanation, Fabros asserted that he was
alone with the a welfare institution; certain meritorious grounds. entitled to a thirty-minute meal break.
responsibility of
parenthood due to (9) Any other person xi. ISSUE: Is Fabros’ assertion correct?
physical and/or mental who solely provides Meal break, Coffee break (Art. 85) (see
incapacity of spouse as parental care and PAL vs. Garcia HELD: Yes. Arts. 83 and 85 of the Labor
certified by a public support to a child or Code read:
medical practitioner; children; below)
Art. 83. Normal hours of work. —
(5) Parent left solo or (10) Any family member Sec. 7, Rule I, The normal hours of work of any employee
alone with the who assumes the Book III, Omnibus Rules (see PAL vs. shall not exceed eight (8) hours a day.
responsibility of responsibility of head of Garcia below)
parenthood due to legal family as a result of the Health personnel in cities and
separation or de death, abandonment, PAL vs. NLRC, G.R. No. 132805, municipalities with a population of at least
facto separation from disappearance or February 2, 1999, Puno, J. one million (1,000,000) or in hospitals and
spouse for at least one prolonged absence of clinics with a bed capacity of at least one
(1) year, as long as the parents or solo FACTS: Dr. Herminio A. Fabros was hundred (100) shall hold regular office
he/she is entrusted with parent. employed as flight surgeon at PAL. He hours for eight (8) hours a day, for five (5)
the custody of the was assigned at the PAL Medical Clinic at days a week, exclusive of time for meals,
children; A change in the status Nichols and was on duty from 4:00 in the except where the exigencies of the service
or circumstance of the afternoon until 12:00 midnight. On require that such personnel work for six (6)
(6) Parent left solo or parent claiming benefits February 17, 1994, at around 7:00 in the days or forty-eight (48) hours, in which
alone with the under this Act, such that evening, private respondent left the clinic case they shall be entitled to an additional
responsibility of he/she is no longer left to have his dinner at his residence, which compensation of at least thirty per cent
parenthood due to alone with the was about five-minute drive away. A few (30%) of their regular wage for work on the
declaration of nullity or responsibility of minutes later, the clinic received an sixth day. For purposes of this Article,
annulment of marriage parenthood, shall emergency call from the PAL Cargo "health personnel" shall include: resident
as decreed by a court or terminate his/her Services. One of its employees, Mr. physicians, nurses, nutritionists, dieticians,
by a church as long as eligibility for these Manuel Acosta, had suffered a heart pharmacists, social workers, laboratory
he/she is entrusted with benefits. attack. The nurse on duty, Mr. Merlino technicians, paramedical technicians,
the custody of the Eusebio, called private respondent at psychologists, midwives, attendants and
children; (e) "Flexible work schedule" - is home to inform him of the emergency. The all other hospital or clinic personnel.
the right granted to a solo patient arrived at the clinic at 7:50 in the
(7) Parent left solo or parent employee to vary evening and Mr. Eusebio immediately Art. 85. Meal periods. — Subject
alone with the his/her arrival and departure rushed him to the hospital. When private to such regulations as the Secretary of
responsibility of time without affecting the respondent reached the clinic at around Labor may prescribe, it shall be the duty of
parenthood due to core work hours as defined 7:51 in the evening, Mr. Eusebio had every employer to give his employees not
abandonment of spouse by the employer. already left with the patient. Mr. Acosta less than sixty (60) minutes time-off for
for at least one (1) year; died the following day. their regular meals.
Section 6. Flexible Work
(8) Unmarried Schedule. - The employer shall provide for Upon learning about the incident, Sec. 7, Rule I, Book III of the
mother/father who has a flexible working schedule for solo PAL Medical Director Dr. Godofredo B. Omnibus Rules Implementing the Labor
preferred to keep and parents: Provided, That the same shall not Banzon ordered the Chief Flight Surgeon Code further states:
rear her/his affect individual and company to conduct an investigation. The Chief
child/children instead of productivity: Provided, further, That any Flight Surgeon, in turn, required Fabros to Sec. 7. Meal and Rest Periods.
having others care for employer may request exemption from the explain why no disciplinary sanction — Every employer shall give his
should be taken against him. In his employees, regardless of sex, not less
than one (1) hour time-off for regular Sec. 7, Rule I, ISSUE: Whether or not the teachers’
meals, except in the following cases when Book III, Omnibus Rules (see PAL vs. Section 21. Weekly Rest Period. overload shall be included in the
a meal period of not less than twenty (20) Garcia above) – The domestic worker shall be entitled to computation of the 13th moth pay.
minutes may be given by the employer at least twenty-four (24) consecutive hours
provided that such shorter meal period is Sec. 2(c), DOLE D.O. No. 118- of rest in a week. The employer and the HELD: Yes. Overload on the other hand
credited as compensable hours worked of 12 domestic worker shall agree in writing on means "the load in excess of the normal
the employee; the schedule of the weekly rest day of the load of private school teachers as
Rest day of 24 consecutive hours domestic worker: Provided, That the prescribed by the Department of
(a) Where the work is non- for every six (6) consecutive working days. employer shall respect the preference of Education, Culture and Sports (DECS) or
manual work in nature or does not involve If the driver/conductor is required to work the domestic worker as to the weekly rest the policies, rules and standards of
strenuous physical exertion; on a rest day, he/she shall be paid an day when such preference is based on particular private schools." In recognition
additional premium pay of 30% of the religious grounds. Nothing in this provision of the peculiarities of the teaching
(b) Where the establishment basic wage. If the driver/conductor is shall deprive the domestic worker and the profession, existing DECS and School
regularly operates not less than sixteen required to work on special days under employer from agreeing to the following: Policies and Regulations for different
hours a day; R.A. No. 9849, he/she shall also be paid (a) Offsetting a day of absence with a levels of instructions prescribe a regular
an additional pay of 30% of the basic particular rest day; (b) Waiving a particular teaching load, the total actual teaching or
(c) In cases of actual or wage. Whenever work is performed on a rest day in return for an equivalent daily classroom hours of which a teacher can
impending emergencies or there is urgent rest day, which happens also to be a rate of pay; (c) Accumulating rest days not generally perform in less than eight (8)
work to be performed on machineries, special day, he is entitled to additional exceeding five (5) days; or (d) Other hours per working day. This is because
equipment or installations to avoid serious 50% of the basic wage. similar arrangements. teaching may also require the teacher to
loss which the employer would otherwise do additional work such as handling an
suffer; and Sec. 3, DOLE D.O. No. 118-12 xiii. advisory class, preparation of lesson plans
Overtime (Art. 87) and teaching aids, evaluation of students
(d) Where the work is necessary Hours of work and hours of and other related activities. Where,
to prevent serious loss of perishable rest. The normal hours of a driver and a. Teachers however a teacher is engaged to
goods. conductor shall not exceed eight (8) hours undertake actual additional teaching work
a day. Letran Calamba Faculty & Employees after completing his/her regular teaching
Rest periods or coffee breaks Association vs. NLRC, G.R. No. 156225, load, such additional work is generally
running from five (5) to twenty (20) If the driver/conductor is required January 29, 2008, Austria-Martinez, J. referred to as overload. In short, additional
minutes shall be considered as to work overtime, the maximum hours of work in excess of the regular teaching load
compensable working time. work shall not exceed twelve (12) hours in FACTS: Letran Calamba Faculty and is overload work. Regular teaching load
any 24-hour period, subject to the Employees Association against Colegio de and overload work, if any, may
Thus, the eight-hour work period overriding safety and operational San Juan de Letran, Calamba, Inc. for constitute a teacher's working day.
does not include the meal break. Nowhere conditions of the public utility bus. collection of various monetary claims due
in the law may it be inferred that its members. One of their allegations is Where a teacher is required to
employees must take their meals within Drivers and conductors shall be that, in the computation of the thirteenth perform such overload within the eight
the company premises. Employees are not entitled to rest periods of at least one (1) month pay of its academic personnel, (8) hours normal working day, such
prohibited from going out of the premises hour, exclusive of meal breaks, within a respondent does not include as basis overload compensation shall be
as long as they return to their posts on 12-hour shift. therefor their compensation for overloads. considered part of the basic pay for the
time. Private respondent's act, therefore, It only takes into account the pay the purpose of computing the teacher's
of going home to take his dinner does not R.A. No. 10361 (Domestic faculty members receive for their teaching 13th-month pay. "Overload work" is
constitute abandonment. Workers Act or Batas Kasambahay) loads not exceeding eighteen (18) units. sometimes misunderstood as synonymous
The teaching overloads are rendered to "overtime work" as this term is used and
xii. Section 20. Daily Rest Period. – within eight (8) hours a day. understood in the Labor Code. These two
Rest period The domestic worker shall be entitled to terms are not the same because overtime
an aggregate daily rest period of eight (8) work is work rendered in excess of normal
hours per day. working hours of eight in a day (Art. 87,
Labor Code). Considering that overload Petitioner's counsel, in his final
work may be performed either within or attempt to lay a basis for compelling Legahi vs. NLRC, G.R. No. 122240, Pigcaulan vs. Security & Credit, G.R.
outside eight hours in a day, overload work private respondent to pay premium rates November 18, 1999, Kapunan, J. (*This No. 173648, January 16, 2012, Del
may or may not be overtime work. of pay for all hours worked on a Saturday, was asked in the 2016 Jurist Mock Bar Castillo, J.
regardless of the number of hours actually Examination)
b. Work on worked earlier during the week, i.e., on Doctrine. The handwritten
weekend/undertime Monday to Friday, insists that private ISSUE: Are seafarers entitled to overtime itemized computations are self-serving,
respondent cannot require its employees pay? unreliable and unsubstantial evidence to
Caltex Regular Employees vs. Caltex, to complete the 40-hour regular work week sustain the grant of salary differentials,
G.R. No. 113359, August 15, 1995, on a Saturday, after it has allowed its HELD: Yes, provided they actually particularly overtime pay. Unsigned and
Feliciano, J. employees to render only 37-1/2 hours of rendered overtime work. We already unauthenticated as they are, there is no
work. resolved the question of overtime pay of way of verifying the truth of the
Doctrine. Overtime work worker aboard a vessel in the case handwritten entries stated therein. Written
consists of hours worked on a given day in The company practice of allowing of National Shipyards and Steel only in pieces of paper and solely
excess of the applicable work period, employees to leave thirty (30) minutes Corporation v. CIR (3 SCRA 890). We prepared by Canoy and Pigcaulan, these
which here is eight (8) hours. It is not earlier than the scheduled off-time had ruled: We cannot agree with the Court representative daily time records, as
enough that the hours worked fall on been established primarily for the below that respondent Malondras should termed by the Labor Arbiter, can hardly be
disagreeable or inconvenient hours. In convenience of the employees most of be paid overtime compensation for every considered as competent evidence to be
order that work may be considered as whom have had to commute from work hour in excess of the regular working used as basis to prove that the two were
overtime work, the hours worked must be place to home and in order that they may hours that he was on board his vessel or underpaid of their salaries. We find nothing
in excess of and in addition to the eight (8) avoid the heavy rush hour vehicular traffic. barge each day, irrespective of whether or in the records which could substantially
hours worked during the prescribed daily There is no allegation here by petitioner not he actually put in work during those support Pigcaulan’s contention that he had
work period, or the forty (40) hours worked Union that such practice was resorted to hours. Seamen are required to stay on rendered service beyond eight hours to
during the regular work week Monday thru by Caltex in order to escape its contractual board their vessels by the very nature of entitle him to overtime pay and during
Friday. obligations. This practice, while it their duties, and it is for this reason that, in Sundays to entitle him to restday pay.
effectively reduced to 37-1/2 the number of addition to their regular compensation, Hence, in the absence of any concrete
In the present case, under the hours actually worked by employees who they are given free living quarters and proof that additional service beyond the
1985 CBA, hours worked on a Saturday had opted to leave ahead of off-time, is not subsistence allowances when required to normal working hours and days had
do not, by that fact alone, necessarily be construed as modifying the other terms be on board. It could not have been the indeed been rendered, we cannot affirm
constitute overtime work compensable at of the 1985 CBA. As correctly pointed out purpose of our law to require their the grant of overtime pay to Pigcaulan.
premium rates of pay, contrary to by private respondent, the shortened work employers to pay them overtime even
petitioner's assertion. These are normal or period did not result in likewise shortening when they are not actually working; Under the Labor Code, Pigcaulan
regular work hours, compensable at the work required for purposes of otherwise, every sailor on board a vessel is entitled to his regular rate on holidays
regular rates of pay, as provided in the determining overtime pay, as well as for would be entitled to overtime for sixteen even if he does not work. Likewise,
1985 CBA; under that CBA, Saturday purposes of determining premium pay for hours each a day, even if he spent all express provision of the law entitles him to
is not a rest day or a "day off". It is only work beyond forty (40) hours within the those hours resting or sleeping in his service incentive leave benefit for he
when an employee has been required on a calendar week. It follows that an employee bunk, after his regular tour of duty. The rendered service for more than a year
Saturday to render work in excess of the is entitled to be paid premium rates, correct criterion in determining whether or already. Furthermore, under Presidential
forty (40) hours which constitute the whether for work in excess of eight (8) not sailors are entitled to overtime pay is Decree No. 851, he should be paid his
regular work week that such employee hours on any given day, or for work not, therefore, whether they were on 13th month pay. As employer, SCII has the
may be considered as performing overtime beyond the forty (40)-hour requirement for board and cannot leave ship beyond the burden of proving that it has paid these
work on that Saturday. We consider that the calendar week, only when the regular eight working hours a day, but benefits to its employees.
the statutory prohibition against offsetting employee had, in fact already rendered whether they actually rendered service in
undertime one day with overtime another the requisite number of hours — 8 or 40 — excess of said number of hours. SCII presented payroll listings
day has no application in the case at bar. prescribed in the 1985 CBA. and transmittal letters to the bank to show
d. Evidence/Required that Canoy and Pigcaulan received their
c. Seafarers proof salaries as well as benefits which it
claimed are already integrated in the agriculture, stock raising, fishing, maritime such workers, where necessary, can be necessary for the health of the
employees’ monthly salaries. However, the transport and inland navigation, during a taken immediately to a place for mother or child:
documents presented do not prove SCII’s period of not less than seven (7) appropriate treatment. The employers are
allegation. SCII failed to show any other consecutive hours, including the interval likewise required to provide safe and "(1) During pregnancy;
concrete proof by means of records, from midnight to five o'clock in the healthful working conditions and adequate "(2) During a specified
pertinent files or similar documents morning, to be determined by the or reasonable facilities such as sleeping or time beyond the period,
reflecting that the specific claims have Secretary of Labor and Employment, after resting quarters in the establishment and after childbirth is fixed
been paid. With respect to 13th month pay, consulting the workers' transportation from the work premises to pursuant to
SCII presented proof that this benefit was representatives/labor organizations and the nearest point of their residence subject subparagraph (a) above,
paid but only for the years 1998 and 1999. employers. to exceptions and guidelines to be the length of which shall
To repeat, the burden of proving payment provided by the DOLE." be determined by the
of these monetary claims rests on SCII, “Night worker' means any DOLE after consulting
being the employer. It is a rule that one employed person whose work requires "Article 157. Transfer. - Night the labor organizations
who pleads payment has the burden of performance of a substantial number of workers who are certified as unfit for night and employers.
proving it. "Even when the plaintiff alleges hours of night work which exceeds a work, due to health reasons, shall be "During the periods
non-payment, still the general rule is that specified limit. This limit shall be fixed by transferred, whenever practicable, to a referred to in this article:
the burden rests on the defendant to prove the Secretary of Labor after consulting the similar job for which they are fit to work.
payment, rather than on the plaintiff to workers' representatives/labor "(i) A woman
prove non-payment." Since SCII failed to organizations and employers." "If such transfer to a similar job is worker shall
provide convincing proof that it has not practicable, these workers shall be not be
already settled the claims, Pigcaulan "Article 155. Health Assessment. granted the same benefits as other dismissed or
should be paid his holiday pay, service - At their request, workers shall have the workers who are unable to work, or to given notice of
incentive leave benefits and proportionate right to undergo a health assessment secure employment during such period. dismissal,
13th month pay for the year 2000. without charge and to receive advice on except for just
how to reduce or avoid health problems "A night worker certified as or authorized
xiv. associated with their work: temporarily unfit for night work shall be causes
Undertime given the same protection against provided for in
"(a) Before taking up an dismissal or notice of dismissal as other this Code that
xv. assignment as a night worker; workers who are prevented from working are not
Night work (Art. 86, Labor Code; R.A. "(b) At regular intervals during for reasons of health." connected with
No. 10151; DOLE such an assignment; and pregnancy,
"(c) If they experience health "Article 158. Women Night childbirth and
D.O. No. 119-12) problems during such, an Workers. - Measures shall be taken to childcare
assignment which are not caused ensure that an alternative to night work is responsibilities.
R.A. No. 10151 by factors other than the available to women workers who would
performance of night work. otherwise be called upon to perform such "(ii) A woman
This law governs employment of work: worker shall
night workers amending certain provisions "With the exception of a finding of not lose the
of the Labor Code. DOLE D.O. No. 119- unfitness for night work, the findings of "(a) Before and after childbirth, benefits
12 is the implementing rule. This law such assessments shall not be transmitted for a period of at least sixteen regarding her
caused the renumbering of Labor Code to others without the workers' consent and (16) weeks, which shall be status,
provisions. shall not be used to their detriment." divided between the time before seniority, and
and after childbirth; access to
"Article 154. Coverage. - This "Article 156. Mandatory "(b) For additional periods, in promotion
chapter' shall apply to all persons, who Facilities. - Suitable first·aid facilities shall respect of winch a medical which may
shall be employed or permitted or suffered be made available for workers performing certificate IS produced stating attach to her
to work at night, except those employed in night work, including arrangements where that said additional periods are
regular night protection and corporation, trust, firm, partnership or agreed compensation for the statutorily
work position. benefits association, or entity. fixed or voluntarily agreed hours of labor
connected with he is supposed to do. When he thus
"Pregnant maternity leave a. Rationale spends additional time to his work, the
women and under existing effect upon him is multi-faceted: he puts in
nursing laws." Association of International Shipping more effort, physical and/or mental; he is
mothers may Lines, Inc. vs. United Harbors’ Pilot delayed in going home to his family to
be allowed to "Article 159. Compensation. The Association, G.R. No. 172029, August 6, enjoy the comforts thereof; he might have
work .at night compensation for night workers in the form 2008, Reyes, R.T., J. no time for relaxation, amusement or
only if a of working time, pay or similar benefits sports; he might miss important pre-
competent shall recognize the exceptional nature of Doctrine. It bears pointing out arranged engagements; etc., etc. It is thus
physician, night work." that additional compensation for nighttime the additional work, labor or service
other than the work is founded on public policy. Working employed and the adverse effects just
company "Article 160. Social Services. - at night is violative of the law of nature for mentioned of his longer stay in his place of
physician, shall Appropriate social services shall be it is the period for rest and sleep. An work that justify and is the real reason for
certify their provided for night workers and, where employee who works at night has less the extra compensation that he called
fitness to necessary, for workers performing night stamina and vigor. Thus, he can easily overtime pay.
render night work." contract disease. The lack of sunlight
work, and tends to produce anemia and tuberculosis Overtime work is actually the
specify, in the "Article 161. Night Work and predispose him to other ills. Night lengthening of hours developed to the
case of Schedules. - Before introducing work work brings increased liability to eyestrain interests of the employer and the
pregnant schedules requiring the services of night and accident. Serious moral dangers also requirements of his enterprise. It follows
employees, the workers, the employer shall consult the are likely to result from the necessity of that the wage or salary to be received
period of the workers' representatives/labor traveling the street alone at night, and must likewise be increased, and more than
pregnancy that organizations concerned on the details of from the interference with normal home that, a special additional amount must be
they can safely such schedules and the forms of life. Hygienic, medical, moral, cultural and added to serve either as encouragement
work. organization of night work that are best socio-biological reasons are in accord that or inducement or to make up for the things
adapted to the establishment and its night work has many inconveniences and he loses which we have already referred
"The measures personnel, as well as on the occupational when there is no alternative but to perform to. And on this score, it must always be
referred to in health measures and social services which it, it is but just that the laborer should earn borne in mind that wage is indisputably
this article may are required. In establishments employing greater salary than ordinary work so as to intended as payment for work done or
include transfer night workers, consultation shall take compensate the laborer to some extent for services rendered.
to day work place regularly." the said inconveniences.
where this is b. Seafarers
possible, the Section 8. Penalties. - Any Anent the payment of overtime
provision of violation of this Act, and the rules and pay, the Court explained its rationale Dacut vs. CA, G.R. No. 169434, March
social security regulations issued pursuant hereof shall in Philippine National Bank v. Philippine 28, 2008, Quisumbing, J.
benefits or an be punished with a fine of not less than National Bank Employees Association
extension of Thirty thousand pesos (P30,000.00) nor (PEMA): Doctrine. Apropos the monetary
maternity more than Fifty thousand pesos claims, there is insufficient evidence to
leave. (P50,000.00) or imprisonment of not less x x x Why is a laborer or prove petitioners’ entitlement thereto. As
than six (6) months, or both, at the employee who works beyond the regular crew members, petitioners were required
"The provisions discretion of the court. If the offense is hours of work entitled to extra to stay on board the vessel by the very
of this article committed by a corporation, trust, firm, compensation called in this enlightened nature of their duties, and it is for this
shall not leave partnership at association, or other entity, time, overtime pay? Verily, there can be no reason that, in addition to their regular
the effect of the penalty shall be imposed upon the other reason than that he is made to work compensation, they are given free living
reducing the guilty officer or officers of such longer than what is commensurate with his quarters and subsistence allowances
when required to be on board. It could not of 1987 is hereby amended to read as "Ninoy" S. Aquino J., August twenty-one of Ninoy Aquino Day - Monday neare
have been the purpose of our law to follows: every year is hereby declared as the Ninoy
require their employers to give them Aquino Day which shall be a national All Saints Day - November 1
overtime pay or night shift differential, Sec. 26. Regular Holidays and nonworking holiday.
even when they are not actually working. Nationwide Special Days (1) Unless Last Day of the Year - December 31
Thus, the correct criterion in determining otherwise modified by law, order or Republic Act No. 9849 "(c) In the event the holiday falls
whether they are entitled to overtime pay proclamation, the following regular on a Wednesday, the holiday will
or night shift differential is not whether they holidays and special days shall observed Section 2. Section 26, Chapter 7, be observed on the Monday of
were on board and cannot leave ship in the country. Book I of Executive Order No. 292, the week. If the holiday falls on a
beyond the regular eight working hours a a) Regular Holidays otherwise known as "The Administrative Sunday, the holiday will be
day, but whether they actually rendered Code of 1987", as amended, is hereby observed on the Monday that
service in excess of said number of New Year's Day amended to read as follows: follows:
hours. In this case, petitioners failed to
submit sufficient proof that overtime and Maundy Thursday "SEC. 26. Regular Holidays and "Provided,That for movable
night shift work were actually performed to Nationwide Special Days. – holidays, the President shall
Good Friday
entitle them to the corresponding pay. issue a specific date shall be
Eidul Fitr (1) Unless otherwise modified by declared as a nonworking day."
xvi. law, order, or proclamation, the
No offsetting rule (Art. 88) Araw ng Kagitingan following regular holidays and Proclamation No. 831 s 2014 –
(Bataan and Corregidor Day) special days shall be observed in Proclamation declaring regular and special
2. Chapter II, Arts. 91- the country: holidays for the year 2014. Chinese New
96 Labor Day
Year is included as special holiday
"(a) Regular Holidays
Independence Day
a. Rest day New Year's Day a.
(Art. 91) National Heroes Day Rationale/Entitlement;
Maundy Thursday two regular holidays
b. Bonifacio Day on one day
Compulsory work on rest day (Art. 92, Good Friday
93) Christmas Day
Eidul Fitr Asian Transmission Corp. (ATC) vs. CA,
Rizal Day G.R. No. 144644, March 15, 2004,
c. Regular Eidul Adha Carpio-Morales, J.
holiday vs. special holiday (Art. 94) b) Nationwide Special Holidays
Araw ng Kagitingan FACTS: In 1993, two legal holidays i.e.
Executive Order No. 203 All Saints Day (Bataan and Corregidor Day) Good Friday and Araw ng Kagitingan fell
Last Day of the Year on the same day (April 9, 1993). Hence,
E.O. No. 203 amended Art. 94 by Labor Day
DOLE Usec. Cresenciano B. Trajano
adding National Heroes day in the list of issued an Explanatory Bulletin clarifying
Independence Day
regular/legal holidays and removing the Provided, however That Eidul that employees are entitled to 200% of
day designated by law for holding a Adha shall be celebrated as a regional National Heroes Day their basic wage on the said date. The
general election (found in ATC vs. CA) holiday in Autonomous Region in Muslim said bulletin was reproduced on January
Mindanao." Bonifacio Day 23, 1998 considering that Maundy
Republic Act No. 9177 Thursday and Araw ng Kagitingan also fell
Republic Act No. 9256 Christmas Day
on the same date (April 9, 1998) on that
Section 2. Section 26, Chapter 7 Rizal Day year. Despite the bulletin, ATC paid only its
of Executive Order No 292, otherwise Section 1. Ninoy Aquino Day. - employees of 100% of their basic wage.
known as the Revised Administrative Code In order to commemorate the death "(b) Nationwide Special Holidays
Thus, Bisig ng Asian Transmission Labor
anniversary of Former Senator Benigno
Union (BATLU) protested and pursuant to whether an employee is paid on a monthly consideration. Moreover, Sec. 11, Rule IV, modified the decision saying that the
the CBA, the parties submitted the or daily basis. Unlike a bonus, which is a Book III of the Omnibus Rules to faculty shall be entitled to holiday pay.
controversy to voluntary arbitrator who management prerogative, holiday pay is a Implement the Labor Code provides that
ruled in favor of BATLU. The ruling of the statutory benefit demandable under the "Nothing in the law or the rules shall justify ISSUE: Whether or not the faculty is
voluntary arbitrator was affirmed by the law. Since a worker is entitled to the an employer in withdrawing or reducing entitled to holiday pay during special
CA. Hence, the case reached the SC. enjoyment of ten paid regular holidays, the any benefits, supplements or payments for holiday.
fact that two holidays fall on the same date unworked regular holidays as provided in
ISSUE: Whether or not the employees should not operate to reduce to nine the existing individual or collective agreement HELD: Yes. Holiday pay is provided for
are entitled to 200% of their basic wage if ten holiday pay benefits a worker is or employer practice or policy." under Article 94 of the Labor Code and in
two legal holidays fall on the same date. entitled to receive. the IRR, Rule IV, Book III which reads,
Moreover, in the CBA, ATC “SEC. 8. Holiday pay of certain
HELD: Yes. Holiday pay is a legislated It is elementary, under the rules obligated itself to pay the legal holidays as employees. — (a) Private school teachers,
benefit enacted as part of the of statutory construction, that when the required by law. including faculty members of colleges and
Constitutional imperative that the State language of the law is clear and universities, may not be paid for the
shall afford protection to labor. Its purpose unequivocal, the law must be taken to *NOTE: If the employee worked regular holidays during semestral
is not merely "to prevent diminution of the mean exactly what it says. In the case at on two holidays which coincided in one vacations. They shall, however, be paid for
monthly income of the workers on account bar, there is nothing in the law which day, he is entitled to 300% pay. Reason: the regular holidays during Christmas
of work interruptions. In other words, provides or indicates that the entitlement 200% is for the two holidays and the 100% vacations. . .” Under the these provisions,
although the worker is forced to take a to ten days of holiday pay shall be reduced is for the actual work on that day. apparently, the petitioner, although a non-
rest, he earns what he should earn, that is, to nine when two holidays fall on the same profit institution is under obligation to give
his holiday pay." It is also intended to day. b. Teachers paid by pay even on unworked regular holidays to
enable the worker to participate in the hour hourly paid faculty members subject to the
national celebrations held during the days Petitioner’s assertion that terms and conditions provided for therein.
identified as with great historical and Wellington v. Trajano has "overruled" the Jose Rizal College (JRC) vs. NLRC,
cultural significance. DOLE March 11, 1993 Explanatory Bulletin G.R. No. L-65482, 156 SCRA 27, Paras, We believe that the
does not lie. In Wellington, the issue was J. aforementioned implementing rule is not
Independence Day (June 12), whether monthly-paid employees are justified by the provisions of the law which
Araw ng Kagitingan (April 9), National entitled to an additional day’s pay if a FACTS: JRC has the following categories after all is silent with respect to faculty
Heroes Day (last Sunday of August), holiday falls on a Sunday. This Court, in of employees: (a) personnel on monthly members paid by the hour who because of
Bonifacio Day (November 30) and Rizal answering the issue in the negative, basis, who receive their monthly salary their teaching contracts are obliged to
Day (December 30) were declared observed that in fixing the monthly salary uniformly throughout the year, irrespective work and consent to be paid only for work
national holidays to afford Filipinos with a of its employees, Wellington took into of the actual number of working days in a actually done (except when an emergency
recurring opportunity to commemorate the account "every working day of the year month without deduction for holidays; (b) or a fortuitous event or a national need
heroism of the Filipino people, promote including the holidays specified by law and personnel on daily basis who are paid on calls for the declaration of special
national identity, and deepen the spirit of excluding only Sunday." In the instant actual days worked and they receive holidays). Regular holidays specified as
patriotism. Labor Day (May 1) is a day case, the issue is whether daily-paid unworked holiday pay and (c) collegiate such by law are known to both school and
traditionally reserved to celebrate the employees are entitled to be paid for two faculty who are paid on the basis of faculty members as no class days;"
contributions of the working class to the regular holidays which fall on the same student contract hour. Unable to receive certainly the latter do not expect payment
development of the nation, while the day. their holiday pay in 1975 to 1977, National for said unworked days, and this was
religious holidays designated in Executive Alliance of Teachers and Office Workers clearly in their minds when they entered
Order No. 203 allow the worker to In any event, Art. 4 of the Labor filed a complaint before Minister of Labor into the teaching contracts.
celebrate his faith with his family. Code provides that all doubts in the in behalf of faculty and personnel of JRC
implementation and interpretation of its which was certified for compulsory On the other hand, both the law
As reflected above, Art. 94 of the provisions, including its implementing rules arbitration. The Labor Arbiter ruled that and the Implementing Rules governing
Labor Code, as amended, affords a worker and regulations, shall be resolved in favor employees in category a and b are entitled holiday pay are silent as to payment on
the enjoyment of ten paid regular holidays. of labor. For the working man’s welfare to holiday pay but not the faculty under Special Public Holidays. It is readily
The provision is mandatory, regardless of should be the primordial and paramount category c. Upon appeal, the NLRC apparent that the declared purpose of the
holiday pay which is the prevention of holidays. The Court of Appeals did not err before the Regional Arbitration Branch.
diminution of the monthly income of the ISSUE: Whether or not holiday pay on in sustaining Undersecretary Español who Petitioners alleged that they demanded for
employees on account of work Muslim holidays is applicable even to non- stated: Assuming arguendo that the a salary increase considering that the
interruptions is defeated when a regular Muslims in the area covered by its respondent’s position is correct, then by business of Lhuillier was making good and
class day is cancelled on account of a observance. the same token, Muslims throughout the was evading payment of taxes by making
special public holiday and class hours are Philippines are also not entitled to holiday false entries in the records of accounts.
held on another working day to make up HELD: Yes. Muslim holidays are pays on Christian holidays declared by law Lhuillier became angry and threatened
for time lost in the school calendar. provided under Articles 169 and 170, Title as regular holidays. We must remind the them that something would happen in their
Otherwise stated, the faculty member, I, Book V, of Presidential Decree No. 1083. respondent-appellant that wages and employment if they reported her to the BIR
although forced to take a rest, does not Article 169 enumerates the Muslim other emoluments granted by law to the and if they joined ALU or Association of
earn what he should earn on that day. Be it holidays as follows: (a) ‘Amun Jadīd (New working man are determined on the basis Labor Union. Thereafter, they were
noted that when a special public holiday is Year), which falls on the first day of the of the criteria laid down by laws and informed not to report for work as they had
declared, the faculty member paid by the first lunar month of Muharram; (b) Maulid- certainly not on the basis of the worker’s been terminated. The Labor Arbiter ruled
hour is deprived of expected income, and un-Nabī (Birthday of the Prophet faith or religion. in petitioners favor and part of the award is
it does not matter that the school calendar Muhammad), which falls on the twelfth day the accumulated service incentive leave of
is extended in view of the days or hours of the third lunar month of Rabi-ul-Awwal; At any rate, Article 3(3) of the employees based on their length of
lost, for their income that could be earned (c) Lailatul Isrā Wal Mi’rāj (Nocturnal Presidential Decree No. 1083 also tenure ranging from 6 years to 33 years.
from other sources is lost during the Journey and Ascension of the Prophet declares that "x x x nothing herein shall be Upon appeal to the NLRC, the latter
extended days. Similarly, when classes Muhammad), which falls on the twenty- construed to operate to the prejudice of a reversed the Labor Arbiter. Hence, the
are called off or shortened on account of seventh day of the seventh lunar month of non-Muslim." In addition, the 1999 case reached the SC via petition for
typhoons, floods, rallies, and the like, Rajab; (d) ‘Īd-ul-Fitr (Hari Raya Puasa), Handbook on Workers’ Statutory Benefits, certiorari. Though recommending for the
these faculty members must likewise be which falls on the first day of the tenth approved by then DOLE Secretary reinstatement of the Labor Arbiter’s
paid, whether or not extensions are lunar month of Shawwal, commemorating Bienvenido E. Laguesma on 14 December decision, the Solicitor General argued that
ordered. the end of the fasting season; and (e) ‘Īd- 1999 categorically stated: Considering that the award for SIL shall be limited to 3
ūl-Adhā (Hari Raya Haji),which falls on the all private corporations, offices, agencies, years only pursuant to Art. 291 of the
c. Muslim holidays tenth day of the twelfth lunar month of and entities or establishments operating Labor Code which provides, “All money
Dhū’l-Hijja. Article 170 provides, “(1) within the designated Muslim provinces claims arising from employer-employee
San Miguel Corp. (SMC) vs. CA, G.R. Muslim holidays shall be officially and cities are required to observe Muslim relations accruing during the effectivity of
No. 146775, 375 SCRA 311, January 30, observed in the Provinces of Basilan, holidays, both Muslim and Christians this Code shall be filed within three (3)
2002, Kapunan, J. Lanao del Norte, Lanao del Sur, working within the Muslim areas may years from the time the cause of action
Maguindanao, North Cotabato, Iligan, not report for work on the days accrued; otherwise they shall be forever
FACTS: DOLE Iligan District Office Marawi, Pagadian, and Zamboanga and in designated by law as Muslim holidays. barred.”
conducted a routine inspection in the such other Muslim provinces and cities as
premises of SMC in Sta. Filomena, Iligan may hereafter be created; (2) Upon d. Service Incentive ISSUE: Whether or not the computation
City and it was discovered that there was proclamation by the President of the Leave (Art. 95); Vacation and of the SIL is limited only to 3 years.
an underpayment of Muslim holidays to its Philippines, Muslim holidays may also be Sick Leave
employees; the result of which was sent to officially observed in other provinces and HELD: No. The clear policy of the Labor
Personnel Officer Elena dela Puerta. SMC cities.” These provisions shall be read in i. Code is to grant service incentive leave
contested the findings; hence, DOLE relation to Article 94 of the Labor Code. When demandable; commutation pay to workers in all establishments,
conducted summary hearings. Still, SMC subject to a few exceptions. Section 2,
failed to submit proof that it was paying its Petitioner asserts that Article 3(3) Fernandez vs. NLRC, G.R. No. 105892, Rule V, Book III of the Implementing Rules
employees for holiday pay on Muslim of Presidential Decree No. 1083 provides January 28, 1998, Panganiban, J. and Regulations provides that "[e]very
holidays prompting Director Macaraya to that "(t)he provisions of this Code shall be employee who has rendered at least one
issue a compliance order. SMC appealed applicable only to Muslims x x x." FACTS: Petitioners herein Fernandez et year of service shall be entitled to a yearly
to DOLE Manila but the latter dismissed However, there should be no distinction al. filed a consolidated complaint against service incentive leave of five days with
the same initially on technicality (late between Muslims and non-Muslims as Agencia Cebuana-H. Lhuillier and/or pay." Service incentive leave is a right
appeal) and later on for lack of merit. regards payment of benefits for Muslim Margueritte Lhuillier for illegal dismissal which accrues to every employee who has
served "within 12 months, whether — An employee who is unjustly dismissed employer" must not be understood as a assigned by JPL even before the lapse of
continuous or broken reckoned from the from work shall be entitled to separate classification of employees to 6 months provided by law to JPL reassign
date the employee started working, reinstatement without loss of seniority which service incentive leave shall not be them. Upon appeal, the NLRC agreed
including authorized absences and paid rights and other privileges and to his full granted. Rather, it serves as an with the ELA but awarded a separation
regular holidays unless the working days backwages, inclusive of allowances, and amplification of the interpretation of the pay to Gonzales et al. as it found that
in the establishment as a matter of to his other benefits or their monetary definition of field personnel under the despite its effort to look for clients to whom
practice or policy, or that provided in the equivalent computed from the time his Labor Code as those "whose actual hours they can reassign Gonzales et al., it failed
employment contracts, is less than 12 compensation is withheld from him up to of work in the field cannot be determined to do so. Included in the separation pay is
months, in which case said period shall be the time of his actual reinstatement. with reasonable certainty." the service incentive leave. JPL went to
considered as one year." It is also CA but the latter affirmed the NLRC.
"commutable to its money equivalent if not ii. The same is true with respect to Hence, the case reached the SC.
used or exhausted at the end of the year." Employees the phrase "those who are engaged on
In other words, an employee who has not entitled task or contract basis, purely commission ISSUE: Whether or not Gonzales et al.
served for one year is entitled to it. He basis." Said phrase should be related with are entitled to SIL.
may use it as leave days or he may collect David vs. Macasio, G.R. No. 195466, "field personnel," applying the rule on
its monetary value. To limit the award to July 2, 2014, Brion, J. ejusdem generis that general and HELD: Nonetheless, JPL cannot escape
three years, as the solicitor general unlimited terms are restrained and limited the payment of 13th month pay and
recommends, is to unduly restrict such Doctrine. In short, the payment by the particular terms that they follow. service incentive leave pay to private
right. The law indeed does not prohibit its of an employee on task or pakyaw basis respondents. Said benefits are mandated
commutation. alone is insufficient to exclude one from iii. At by law and should be given to employees
the coverage of SIL and holiday pay. They least one year of service; reckoning as a matter of right.
Moreover, the solicitor general's are exempted from the coverage of Title I period
recommendation is contrary to the ruling of (including the holiday and SIL pay) only if Presidential Decree No. 851, as
the Court in Bustamante et al. vs. NLRC et they qualify as "field personnel." The IRR JPL Marketing Promotions vs. CA, G.R. amended, requires an employer to pay its
al., lifting the three-year restriction on the therefore validly qualifies and limits the No. 151966, July 8, 2005, Tinga, J. rank and file employees a 13th month pay
amount of backwages and other general exclusion of "workers paid by not later than 24 December of every year.
allowances that may be awarded an results" found in Article 82 from the FACTS: JPL was engaged in the However, employers not paying their
illegally dismissed employee, thus: coverage of holiday and SIL pay. This is business of recruitment and placement of employees a 13th month pay or its
Therefore, in accordance with R.A. No. the only reasonable interpretation since workers. Gonzales et al. were employed equivalent are not covered by said law.
6715, petitioners are entitled to their full the determination of excluded workers by JPL as merchandisers on separate The term "its equivalent" was defined by
backwages, inclusive of allowances and who are paid by results from the coverage dates and assigned at different the law’s implementing guidelines as
other benefits or their monetary of Title I is "determined by the Secretary of establishments in Naga City and Daet, including Christmas bonus, mid-year
equivalent, from the time their actual Labor in appropriate regulations." Camarines Norte as attendants to the bonus, cash bonuses and other payment
compensation was withheld from them up display of California Marketing Corporation amounting to not less than 1/12 of the
to the time of their actual reinstatement. In one case, the SC held that a (CMC). Thereafter, Gonzales et al. were basic salary but shall not include cash and
careful perusal of said provisions of law notified by JPL that CMC would stop its stock dividends, cost-of-living-allowances
Since a service incentive leave is will result in the conclusion that the grant direct merchandising activity at the Bicol and all other allowances regularly enjoyed
clearly demandable after one year of of service incentive leave has been area and other areas and they were by the employee, as well as non-monetary
service — whether continuous or broken delimited by the Implementing Rules and advised to wait until further notice as they benefits.
— or its equivalent period, and it is one of Regulations of the Labor Code to apply will be transferred to other clients.
the "benefits" which would have accrued if only to those employees not explicitly However, Gonzales et al. filed an illegal On the other hand, service
an employee was not otherwise illegally excluded by Section 1 of Rule V. dismissal case before the Regional incentive leave, as provided in Art. 95 of
dismissed, it is fair and legal that its According to the Implementing Rules, Arbitration Branch of the NLRC. The the Labor Code, is a yearly leave benefit
computation should be up to the date of Service Incentive Leave shall not apply to Executive Labor Arbiter dismissed the of five (5) days with pay, enjoyed by an
reinstatement as provided under Section employees classified as "field personnel." complaint as it found that Gonzales and employee who has rendered at least one
279 of the Labor Code, as amended, The phrase "other employees whose Abesa applied with and were employed by year of service. Unless specifically
which reads: Art. 279. Security of Tenure. performance is unsupervised by the the store where they were originally excepted, all establishments are required
to grant service incentive leave to their Besides, it would be unfair to require JPL hours of work daily plus tips of two U.S. more prompt service. A tip may range from
employees. The term "at least one year of to pay private respondents the said dollars (U.S. $2.00) per passenger per pure gift out of benevolence or friendship,
service" shall mean service within twelve benefits beyond 15 August 1996 when day. He, was also entitled to 2.5 days of to a compensation for a service measured
(12) months, whether continuous or they did not render any service to JPL vacation leave with pay each month. The by its supposed value but not fixed by an
broken reckoned from the date the beyond that date. These benefits are given contract was to last for one (1) year. After agreement, although usually the word is
employee started working. The Court has by law on the basis of the service actually the expiration of the contract, Orlando applied to what is paid to a servant in
held in several instances that "service rendered by the employee, and in the returned to the Philippines and demanded addition to the regular compensation for
incentive leave is clearly demandable after particular case of the service incentive from Ace Navigation his vacation leave his service in order to secure better
one year of service." leave, is granted as a motivation for the pay. Ace Navigation did not pay him service or in recognition of it. It has been
employee to stay longer with the employer. immediately as it reasoned that Conning said that a tip denotes a voluntary act, but
Admittedly, private respondents There is no cause for granting said did not remit for his VL pay but Ace it also has been said that from the very
were not given their 13th month pay and incentive to one who has already Navigation promised him that it will verify beginning of the practice of tipping it was
service incentive leave pay while they terminated his relationship with the the matter and asked him to ruturn. evident that, whether considered from the
were under the employ of JPL. Instead, employer. Orlando filed a complaint before the Labor standpoint of the giver or the recipient, a
JPL provided salaries which were over and Arbiter (LA) for the payment of VL and tip lacked the essential element of a gift,
above the minimum wage. The Court rules R.A. No. 10361 (Domestic Workers Act unpaid tips. The LA ordered Ace namely, the free bestowing of a gratuity
that the difference between the minimum or Batas Kasambahay) Navigation and Conning to pay Orlando without a consideration, and that, despite
wage and the actual salary received by jointly and severally of VL but dismissed its apparent voluntariness, there is an
private respondents cannot be deemed as Section 29. Leave Benefits. – A the claim for tips for lack of merit. Upon element of compulsion in tipping.
their 13th month pay and service incentive domestic worker who has rendered at appeal to NLRC, the latter modified the
leave pay as such difference is not least one (1) year of service shall be LA’s decision by saying that Orlando is Tipping is done to get the
equivalent to or of the same import as the entitled to an annual service incentive entitled to unpaid tips. The CA affirmed attention and secure the immediate
said benefits contemplated by law. Thus, leave of five (5) days with the NLRC. Hence, the case reached the services of a waiter, porter or others for
as properly held by the Court of Appeals pay: Provided, That any unused portion of SC. their services. Since a tip is considered a
and by the NLRC, private respondents are said annual leave shall not be cumulative pure gift out of benevolence or friendship,
entitled to the 13th month pay and service or carried over to the succeeding years. ISSUE: Whether or not Orlando is entitled it cannot be demanded from the customer.
incentive leave pay. Unused leaves shall not be convertible to for unpaid tips. Whether or not tips will be given is
cash. (Possible Bar Problem) dependent on the will and generosity of
However, the Court disagrees HELD: No. The word ["tip"] has several the giver. Although a customer may give a
with the Court of Appeals’ ruling that the f. Service charges; meanings, with origins more or less tip as a consideration for services
13th month pay and service incentive Tips (Art. 96; Secs. 1-5, Rule IV, obscure, connected with "tap" and with rendered, its value still depends on the
leave pay should be computed from the Book III, Rules) "top." In the sense of a sum of money giver. They are given in addition to the
start of employment up to the finality of the given for good service, other languages compensation by the employer. A gratuity
NLRC resolution. While computation for i. are more specific, e.g., Fr. pourboire, for given by an employer in order to inspire
the 13th month pay should properly begin Tips, defined drink. It is suggested that [the word] is the employee to exert more effort in his
from the first day of employment, the formed from the practice, in early 18th c. work is more appropriately called a bonus.
service incentive leave pay should start a Ace Navigation Co. vs. CA, G.R. No. London coffeehouses, of having a box in
year after commencement of service, for it 140364, August 15, 2000, Puno, J. which persons in a hurry would drop a The contract of employment
is only then that the employee is entitled to small coin, to gain immediate attention. between petitioners and Orlando is
said benefit. On the other hand, the FACTS: Ace Navigation recruited Orlando The box was labelled To Insure categorical that the monthly salary of
computation for both benefits should only Alonsagay as a bartender on the vessel Promptness; then just with the initials T.I.P. Orlando is US$450.00 flat rate. This
be up to 15 August 1996, or the last day MV Orient Express owned by its principal already included his overtime pay which is
that private respondents worked for JPL. Conning Shipping Ltd. Under their POEA It is more frequently used to integrated in his 12 hours of work. The
To extend the period to the date of finality approved contract of employment, Orlando indicate additional compensation, and in words "plus tips of US$2.00 per passenger
of the NLRC resolution would negate the shall receive a monthly basic salary of four this sense "tip" is defined as meaning a per day" were written at the line for
absence of illegal dismissal, or to be more hundred fifty U.S. dollars (U.S. $450.00), gratuity; a gift; a present; a fee; money overtime. Since payment for overtime was
precise, the want of dismissal in this case. flat rate, including overtime pay for 12 given, as to a servant to secure better or included in the monthly salary of Orlando,
the supposed tips mentioned in the However, Orlando should be paid awarding a separation pay instead of
contract should be deemed included his vacation leave pay. Petitioners denied reinstatement. The case reached the SC. f. 13th Month Pay
thereat. this liability by raising the defense that the
usual practice is that vacation leave pay is ISSUES: (1.) Whether or not Damalerio is Presidential Decree No. 851 (13th Month
The actuations of Orlando during given before repatriation. But as the labor illegally dismissed. Pay Law)
his employment also show that he was arbiter correctly observed, petitioners did (2.) Whether or not Damalerio
aware his monthly salary is only not present any evidence to prove that is entitled for service charges and/or tips. i.
US$450.00, no more no less. He did not they already paid the amount. The burden Employees not entitled
raise any complaint about the non- of proving payment was not discharged by HELD: (1.) Yes. Although it was not
payment of his tips during the entire the petitioners. completely proper for Damalerio to be David vs. Macasio, G.R. No. 195466,
duration of his employment. After the touching the things of a hotel guest while July 2, 2014, Brion, J.
expiration of his contract, he demanded ii. cleaning the hotel rooms, personal
payment only of his vacation leave pay. He When not belongings of hotel guests being off-limits Doctrine. Section 3 of the Rules
did not immediately seek the payment of entitled to roomboys, under the attendant facts and Regulations Implementing P.D. No.
tips. He only asked for the payment of tips and circumstances, we believe that the 851 enumerates the exemptions from the
when he filed this case before the labor Maranaw Hotels vs. NLRC, G.R. No. dismissal of Damalerio was unwarranted. coverage of 13th month pay benefits.
arbiter. This shows that the alleged non- 123880, 303 SCRA 540, February 23, To be sure, the investigation held by the Under Section 3(e), "employers of those
payment of tips was a mere afterthought to 1999, Purisima, J. hotel security people did not unearth who are paid on xxx task basis, and those
bloat up his claim. The records of the case enough evidence of culpability. It bears who are paid a fixed amount for
do not show that Orlando was deprived of FACTS: Eddie Damalerio was a room repeating that subject hotel guest lost performing a specific work, irrespective of
any monthly salary. It will now be unjust to attendant of the Century Park Hotel nothing. Albeit petitioner may have the time consumed in the performance
impose a burden on the employer who operated by Maranaw Hotel and Resort reasons to doubt the honesty and thereof" are exempted.
performed the contract in good faith. Corporation. He was seen by a hotel trustworthiness of Damalerio, as a result of
Furthermore, it is presumed that the guest Jamie Glaser with his left hand in what happened, absent sufficient proof of Note that unlike the IRR of the
parties were aware of the plain, ordinary the latter’s suitcase. Not satisfied with guilt, he (Damalerio), who is a rank-and- Labor Code on holiday and SIL pay,
and common meaning of the word "tip." As Damalerio’s explanation upon file employee, cannot be legally dismissed. Section 3(e) of the Rules and Regulations
a bartender, Orlando cannot feign confrontation, Glaser lodged a written Unsubstantiated suspicions and baseless Implementing PD No. 851 exempts
ignorance on the practice of tipping and complaint before Shift In Charge of conclusions by employers are not legal employees "paid on task basis" without
that tips are normally paid by customers Security Despuig. The complaint was justification for dismissing employees. The any reference to "field personnel." This
and not by the employer. brought later by Despuig to Chief Security burden of proving the existence of a valid could only mean that insofar as payment
Buluran. Later on, Damalerio was given a and authorized cause of termination is on of the 13th month pay is concerned, the
It is also absurd that petitioners Disciplinary Action Notice and an the employer. Any doubt should be law did not intend to qualify the exemption
intended to give Orlando a salary higher administrative hearing was conducted. resolved in favor of the employee, in from its coverage with the requirement that
than that of the ship captain. As petitioners Damalerio denied the allegations and keeping with the principle of social justice the task worker be a "field personnel" at
point out, the captain of M/V "Orient explained that he was just fixing the room enshrined in the Constitution. the same time.
Princess" receives US$3,000.00 per as there were several items scattered
month while Orlando will receive around. Subsequently, he was found to (2.) Yes. As regards the share of House of Sara Lee vs. Rey, G.R. No.
US$3,450.00 per month if the tip of have committed qualified theft and served Damalerio in the service charges collected 149013, August 31, 2006, Austria-
US$2.00 per passenger per day will be with notice of termination. He filed a during the period of his preventive Martinez, J.
given in addition to his US$450.00 monthly complaint for illegal dismissal. The Labor suspension, the same form part of his
salary. It will be against common sense for Arbiter ruled in his favor and ordered his earnings, and his dismissal having been Doctrine. In the present case,
an employer to give a lower ranked reinstatement with backwages during the adjudged to be illegal, he is entitled not the respondent is not an ordinary rank-
employee a higher compensation than an period of preventive suspension. Included only to full backwages but also to other and-file employee. The nature of her work
employee who holds the highest position in the backwages is his share in the benefits, including a just share in the requires a substantial amount of trust and
in an enterprise. service charges and/or tips. Upon appeal, service charges, to be computed from the confidence on the part of the employer.
the NLRC modified the decision by start of his preventive suspension until his Being the Credit Administration Supervisor
reinstatement. of the Cagayan de Oro and Butuan City
branches of the petitioner, respondent working masses so they may properly ii.
occupied a highly sensitive and critical celebrate Christmas and New Year. Basis for computation For employees receiving regular
position and may thus be dismissed on the wage, we have interpreted "basic salary"
ground of loss of trust and confidence. The PD 851 contemplates the Honda Phils. vs. Samahan ng to mean, not the amount actually
duties of the respondent included the strict situation of land-based workers, and not of Malalayang Mangagawa sa Honda, G.R. received by an employee, but 1/12 of their
monitoring of the 38- or 52-day "rolling due seafarers who generally earn more than No. 145561, June 15, 2005, Ynarez- standard monthly wage multiplied by their
date" of each of its IBMs and IGSs, as well domestic land-based workers. Santiago, J. length of service within a given calendar
as the supervision of the credit and year. Thus, we exclude from the
collection of payments and outstanding Tanchico’s employment is Doctrine. Presidential Decree computation of "basic salary" payments for
accounts due to the petitioner from its governed by his Contract of Enlistment No. 851, otherwise known as the 13th sick, vacation and maternity leaves, night
dealers. More importantly, respondent has ("Contract"). The Contract has been Month Pay Law, which required all differentials, regular holiday pay and
a direct hand in the preparation and approved by the POEA in accordance with employers to pay their employees a premiums for work done on rest days and
computation of the Service Fees or sales Title I, Book One of the Labor Code and 13th month pay, was issued to protect the special holidays. In Hagonoy Rural Bank
commissions accruing to each dealer. The the POEA Rules Governing level of real wages from the ravages of v. NLRC, St. Michael Academy v. NLRC,
computation of these commissions Employment. The coverage of the worldwide inflation. It was enacted on Consolidated Food Corporation v.
depends on whether the dealer concerned Contract includes Compensation, December 16, 1975 after it was noted that NLRC, and similar cases, the 13th month
was able to remit the sales proceeds Overtime, Sundays and Holidays, there had been no increase in the pay due an employee was computed
within the 38-day or 52-day rolling Vacations, Living Allowance, Sickness, minimum wage since 1970 and the based on the employee’s basic monthly
deadline. Injury and Death, Transportation and Christmas season was an opportune time wage multiplied by the number of months
Travel Expense, Subsistence and Living for society to show its concern for the worked in a calendar year prior to
The award of 13th month pay Quarters. It does not provide for the plight of the working masses so that they separation from employment.
must be deleted. Respondent is not a payment of 13th month pay. The Contract may properly celebrate Christmas and
rank-and-file employee and is, therefore, of Employment, which is the standard New Year. The revised guidelines also
not entitled to thirteenth-month pay. employment contract of the POEA, provided for a pro-ration of this benefit
likewise does not provide for the payment Under the Revised Guidelines on only in cases of resignation or separation
Petroleum Shipping Limited vs. NLRC, of 13th month pay. the Implementation of the 13th month pay from work. As the rules state, under these
G.R. No. 148130, June 16, 2006, Caprio, issued on November 16, 1987, the salary circumstances, an employee is entitled to
J. In Coyoca v. NLRC which ceiling of P1,000.00 under P.D. No. 851 a pay in proportion to the length of time he
involves a claim for separation pay, this was removed. It further provided that the worked during the year, reckoned from the
ISSUE: Are seafarers entitled to 13th Court held: Furthermore, petitioner’s minimum 13th month pay required by law time he started working during the
month pay? contract did not provide for separation shall not be less than one-twelfth (1/12) of calendar year. The Court of Appeals thus
benefits. In this connection, it is important the total basic salary earned by an held that: Considering the foregoing, the
HELD: No. The WHEREAS clauses of to note that neither does POEA standard employee within a calendar year. The computation of the 13th month pay should
PD 851 provides: employment contract for Filipino seamen guidelines pertinently provides: be based on the length of service and not
provide for such benefits. on the actual wage earned by the worker.
WHEREAS, it is necessary to The "basic salary" of an In the present case, there being no gap in
further protect the level of real wages from As a Filipino seaman, petitioner is employee for the purpose of computing the service of the workers during the
ravages of world-wide inflation; governed by the Rules and Regulations the 13th month pay shall include calendar year in question, the computation
Governing Overseas Employment and the all remunerations or earnings paid by of the 13th month pay should not be pro-
WHEREAS, there has been no said Rules do not provide for separation or his employer for services rendered but rated but should be given in full.
increase in the legal minimum wage rates termination pay. x x x does not include allowances and monetary
since 1970; Hence, in the absence of any provision in benefits which are not considered or iii.
his Contract governing the payment of integrated as part of the regular or basic Bonus
WHEREAS, the Christmas 13th month pay, Tanchico is not entitled to salary, such as the cash equivalent of
season is an opportune time for society to the benefit. unused vacation and sick leave credits, United CMC Textile Workers Union vs.
show its concern for the plight of the overtime premium, night differential and Valenzuela, G.R. No. 70763, April 30,
holiday pay, and cost-of-living allowances. 1987, Paras, J.
 13th month pay, for the years 1979 and an enlightened employer to spur the With respect to backwages, the
Doctrine. We find the 1980. The Page 431 collective bargaining employee to greater efforts for the success principle of a "fair day’s wage for a fair
contentions of petitioner more meritorious agreement in question took effect on of the business and realization of bigger day’s labor" remains as the basic factor in
than the contentions of respondents. November 1, 1978, 3 years after the profits. The granting of a bonus is a determining the award thereof. If there is
When We dismissed the petition for review promulgation of P.D. No. 851. If the management prerogative, something given no work performed by the employee there
of private respondents in G.R. No. 58666 Christmas bonus was included in the 13th in addition to what is ordinarily received by can be no wage or pay unless, of course,
on January 20,1982, for lack of merit, We month pay, then there would be no need or strictly due the recipient. Thus, a bonus the laborer was able, willing and ready to
did so upon the doctrine laid down in the for having a specific provision on is not a demandable and enforceable work but was illegally locked out,
Marcopper Case which was promulgated Christmas bonus in the CBA. But it did obligation, except when it is made part of suspended or dismissed or otherwise
on June 11, 1981. Before the dismissal of provide for a bonus in graduated amounts the wage, salary or compensation of the illegally prevented from working. xxx In
said case became final and executory, We depending on the length of service of the employee. Philippine Marine Officers’ Guild v.
decided the La Carlota case on May 31, employee. The intention is clear therefore Compañia Maritima, as affirmed in
1982 wherein We ruled that employees that the bonus provided in the CBA was However, an employer cannot be Philippine Diamond Hotel and Resort v.
are no longer entitled to an additional meant to be in addition to the legal forced to distribute bonuses which it can Manila Diamond Hotel Employees Union,
Christmas bonus or other Christmas requirement. Moreover, why exclude the no longer afford to pay. To hold otherwise the Court stressed that for this exception
benefits if they are already entitled to a payment of the 1978 Christmas bonus and would be to penalize the employer for his to apply, it is required that the strike be
13th month pay. Meanwhile in Case No. pay only the 1979-1980 bonus. The past generosity. legal, a situation that does not obtain in
58666 the company filed their motion for classification of the company's workers in the case at bar.
reconsideration of the dismissal of their the CBA according to their years of service In Traders Royal Bank v. NLRC, it
petition which We denied as per Our supports the allegation that the reason for was held that the decrease in the mid-year The petitioners herein do not
resolution on August 18, the payment of bonus was to give bigger and year-end bonuses constituted a deny their participation in the June 15,
1982. Subsequently, said dismissal reward to the senior employees — a diminution of the employees' salaries, is 1993 strike. As such, they did not suffer
became final and executory as per Entry purpose which is not found in P.D. 851. A not correct, for bonuses are not part of any loss of earnings during their absence
of Judgment dated September 22, bonus under the CBA is an obligation labor standards in the same class as from work. Their reinstatement sans
1982. Thus, it can be seen that despite the created by the contract between the salaries, cost of living allowances, holiday backwages is in order, to conform to the
La Carlota ruling, We denied the management and workers while the 13th pay, and leave benefits, which are policy of a fair day’s wage for a fair day’s
company's Motion for reconsideration and month pay is mandated by the law (P.D. provided by the Labor Code. labor.
We reiterated Our previous dismissal of 851).
the petition for review for lack of merit. 3. Chapter III, Arts. 97- Under the principle of a fair day’s
This only goes to show that We refused to Producers Bank vs. NLRC, G.R. No. 96; Title II, Arts. 97-105, 110-119, 123- wage for a fair day’s labor, the petitioners
apply or did not choose to apply the La 100701, March 28, 2001, Gonzaga- 129 were not entitled to the wages during the
Carlota doctrine to the case at bar. And Reyes, J. period of the strike (even if the strike might
We have consistently held in a number of a. No work, be legal), because they performed no work
Our decisions that judgments which had FACTS: Producers Bank was placed no pay during the strike. Verily, it was neither fair
long become final and executory can no under conservatorship by the Monetary nor just that the dismissed employees
longer be amended or modified by the Board, pursuant to its authority under Escario vs. NLRC, G.R. No. 160302, should litigate against their employer on
courts. Such is the doctrine known as "the Section 28-A of Republic Act No. 265. October 10, 2010, Bersamin, J. the latter’s time. Thus, the Court deleted
law of the case." the award of backwages and held that the
ISSUE: Is Producers Bank obliged to give Doctrine. That backwages are striking workers were entitled only to
Furthermore, the findings of the bonuses to its employees? not granted to employees participating in reinstatement in Philippine Diamond Hotel
NLRC as stated in its decision show that an illegal strike simply accords with the and Resort, Inc. (Manila Diamond Hotel) v.
the claim is for Christmas bonus for the HELD: No. A bonus is an amount reality that they do not render work for the Manila Diamond Hotel Employees
year 1978 only. It appears from the granted and paid to an employee for his employer during the period of the illegal Union, considering that the striking
records that the employees of the industry and loyalty which contributed to strike. According to G&S Transport employees did not render work for the
respondent company had been paid their the success of the employer's business Corporation v. Infante: employer during the strike.
bonuses in accordance with the collective and made possible the realization of
bargaining agreement, in addition to the profits. It is an act of generosity granted by
 b. salaries. It also failed to provide proof of its workers while they were working at
Wages/Salary, Facilities, Supplement SLL International Cables vs. NLRC, the employees’ written authorization, much their respective projects.
G.R. No. 172161, March 2, 2011, less show how they arrived at their
DOLE Department Order No. 118-12 s Mendoza, J. valuations. At any rate, it is not even clear Millares vs. NLRC, G.R. No. 122827,
2012 whether private respondents actually March 29, 1999, Bellosillo, J.
Doctrine. Section 3, Rule VII of enjoyed said facilities.
Labor Advisory on Payment of Salaries the Rules to Implement the Labor Doctrine. "Pay" is not defined
thru ATM, November 25, 1996 Code specifically enumerates those who The Court, at this point, makes a therein but "wage." In Songco the Court
are not covered by the payment of distinction between "facilities" and explained that both words (as well as
Conditions for the adoption of minimum wage. Project employees are not "supplements." It is of the view that the salary) generally refer to one and the
ATM: among them. food and lodging, or the electricity and same meaning, i.e., a reward or
water allegedly consumed by private recompense for services performed.
1.) The ATM system payment is On whether the value of the respondents in this case were not facilities Specifically, "wage" is defined in letter (f)
with the written consent of the employees facilities should be included in the but supplements. In the case of Atok-Big as the remuneration or earnings, however
concerned; computation of the "wages" received by Wedge Assn. v. Atok-Big Wedge Co., the designated, capable of being expressed in
private respondents, Section 1 of DOLE two terms were distinguished from one terms of money, whether fixed or
2.) The employees are given Memorandum Circular No. 2 provides that another in this wise: ascertained on a time, task, piece, or
reasonable time to withdraw their wages an employer may provide subsidized commission basis, or other method of
from the bank facility which time, if done meals and snacks to his employees "Supplements," therefore, calculating the same, which is payable by
during working hours, shall be considered provided that the subsidy shall not be less constitute extra remuneration or special an employer to an employee under a
compensable hours worked; that 30% of the fair and reasonable value privileges or benefits given to or received written or unwritten contract of
of such facilities. In such cases, the by the laborers over and above their employment for work done or to be done,
3.) The system shall allow employer may deduct from the wages of ordinary earnings or wages. "Facilities," on or for services rendered or to be
workers to receive their wages within the the employees not more than 70% of the the other hand, are items of expense rendered and includes the fair and
period or frequency and in the amount value of the meals and snacks enjoyed by necessary for the laborer's and his family's reasonable value, as determined by the
prescribed under the Labor Code, as the latter, provided that such deduction is existence and subsistence so that by Secretary of Labor, of board, lodging, or
amended; with the written authorization of the express provision of law (Sec. 2[g]), they other facilities customarily furnished by the
employees concerned. form part of the wage and when furnished employer to the employee.
4.) There is a bank or ATM facility by the employer are deductible therefrom,
within a radius of one kilometer to the Moreover, before the value of since if they are not so furnished, the We invite attention to the above-
place of work; facilities can be deducted from the laborer would spend and pay for them just underlined clause. Stated differently, when
employees’ wages, the following requisites the same. an employer customarily furnishes his
5.) Upon request of the must all be attendant: first, proof must be employee board, lodging or other facilities,
concerned employee/s the employer shall shown that such facilities are customarily In short, the benefit or privilege the fair and reasonable value thereof, as
issue a record of payment of wages, furnished by the trade; second, the given to the employee which constitutes determined by the Secretary of Labor and
benefits and deductions for particular provision of deductible facilities must be an extra remuneration above and over his Employment, is included in "wage." In
period; voluntarily accepted in writing by the basic or ordinary earning or wage is order to ascertain whether the subject
employee; and finally, facilities must be supplement; and when said benefit or allowances form part of petitioner's
6.) There shall be no additional charged at reasonable value. Mere privilege is part of the laborers' basic "wages," we divide the discussion on the
expenses and no diminution of benefits availment is not sufficient to allow wages, it is a facility. The distinction lies following — "customarily furnished;"
and priveleges as a result of the ATM deductions from employees’ wages. not so much in the kind of benefit or item "board, lodging or other facilities;" and,
system of payment; (food, lodging, bonus or sick leave) given, "fair reasonable value as determined by
These requirements, however, but in the purpose for which it is given. In the Secretary of Labor."
7.) The employer shall assume have not been met in this case. SLL failed the case at bench, the items provided
responsibility in cae the wage protection to present any company policy or guideline were given freely by SLL for the purpose "Customary" is founded on long-
provisions of the law and regulations are showing that provisions for meals and of maintaining the efficiency and health of established and constant
not complied with under the arrangement. lodging were part of the employee’s practice connoting regularity. The receipt
of an allowance on a monthly basis does exist, the allowance reached the cutoff paid or incurred by the Staff/Manager's allowance and
not ipso facto characterize it as regular point. The finding of the NLRC along the employee in the pursuit transportation allowance were amounts
and forming part of salary because the same line likewise merits of the trade or business given by respondent company in lieu of
nature of the grant is a factor worth concurrence, i.e., petitioners' continuous of the employer, and actual provisions for housing and
considering. We agree with the enjoyment of the disputed allowances was transportation needs whereas the Bislig
observation of the Office of the Solicitor based on contingencies the occurrence of (b) The employee is allowance was given in consideration of
General that the subject allowances were which wrote finis to such enjoyment. required to, and does, being assigned to the hostile environment
temporarily, not regularly, received by make an then prevailing in Bislig.
petitioners because — Although it is quite easy to accounting/liquidation
comprehend "board" and "lodging," it is not for such expense in The inevitable conclusion is that,
In the case of the so with "facilities." Thus Sec. 5, Rule VII, accordance with the as reached by the NLRC, subject
housing allowance, once Book III, of the Rules Implementing the specific requirements of allowances did not form part of petitioners'
a vacancy occurs in the Labor Code gives meaning to the term as substantiation for such wages.
company-provided including articles or services for the benefit category or expense.
housing of the employee or his family but excluding Our Haus Realty vs. Parian, G.R. No.
accommodations, the tools of the trade or articles or service Board and lodging 204651, August 6, 2014, Brion, J.
employee concerned primarily for the benefit of the employer or allowances furnished to
transfers to the necessary to the conduct of the employer's an employee not in FACTS: Our Haus Realty argued that
company premises and business. The Staff/Manager's allowance excess of the latter's they are complying with the minimum
his housing allowance is may fall under "lodging" but the needs and given free of wage law since aside from paying the
discontinued . . . . transportation and Bislig allowances are charge, constitute monetary amount of the respondents’
On the other hand, the not embraced in "facilities" on the main income to the latter wages, it also subsidized their meals (3
transportation allowance consideration that they are granted as well except if such times a day), and gave them free lodging
is in the form of as the Staff/Manager's allowance for allowances or benefits near the construction project they were
advances for actual respondent PICOP's benefit and are furnished to the assigned to. In determining the total
transportation expenses convenience, i.e., to insure that petitioners employee for the amount of the respondents’ daily wages,
subject to liquidation . . . render quality performance. In determining convenience of the the value of these benefits should be
given only to employees whether a privilege is a facility, the criterion employer and as considered, in line with Article 97(f) of the
who have personal cars. is not so much its kind but its necessary incident to Labor Code.
purpose. That the assailed allowances proper performance of
The Bislig allowance is were for the benefit and convenience of his duties in which case ISSUE: Whether or not Our Haus’
given to Division respondent company was supported by such benefits or argument is correct.
Managers and corporate the circumstance that they were not allowances do not
officers assigned in subjected to withholding tax. Revenue constitute taxable HELD: No. The facility must be
Bislig, Surigao del Audit Memo Order No. 1-87 pertinently income. customarily furnished by the trade. Our
Norte. Once the officer provides — Haus could not really be expected to prove
is transferred outside The Secretary of Labor and compliance with the first requirement since
Bislig, the allowance 3.2. . . . transportation, Employment under Sec. 6, Rule VII, Book the living accommodation of workers in the
stops. representation or III, of the Rules Implementing the Labor construction industry is not simply a matter
entertainment expenses Code may from time to time fix in of business practice. Peculiar to the
We add that in the availment of shall not constitute appropriate issuances the "fair and construction business are the occupational
the transportation allowance, respondent taxable compensation if: reasonable value of board, lodging and safety and health (OSH) services which
PICOP set another requirement that the other facilities customarily furnished by an the law itself mandates employers to
personal cars be used by the employees (a) It is for necessary employer to his employees." Petitioners' provide to their workers. This is to ensure
in the performance of their duties. When travelling and allowances do not represent such fair and the humane working conditions of
the conditions for availment ceased to representation or reasonable value as determined by the construction employees despite their
entertainment expenses proper authority simply because the constant exposure to hazardous working
environments. Under Section 16 of DOLE purpose why it was given by the employer. order to finish the project on the
Department Order (DO) No. 13, series of If it is primarily for the employee’s gain, designated turn-over date. Thus, it will be The facility must be charged at
1998, construction industries are required then the benefit is a facility; if its provision more convenient to the employer if its a fair and reasonable value. Our Haus
to provide welfare ameneties. is mainly for the employer’s advantage, workers are housed near the construction never explained how it came up with the
then it is a supplement. Again, this is to site to ensure their ready availability during valuesit assigned for the benefits it
Moreover, DOLE DO No. 56, ensure that employees are protected in urgent or emergency circumstances. Also, provided; it merely listed its supposed
series of 2005, which sets out the circumstances where the employer productivity issues like tardiness and expenses without any supporting
guidelines for the implementation ofDOLE designates a benefit as deductible from unexpected absences would be document. Since Our Haus is using these
DO No. 13, mandates that the cost of the the wages even though it clearly works to minimized. This observation strongly bears additional expenses (cook’s salary, water
implementation of the requirements for the the employer’s greater convenience or in the present case since three of the and LPG) to support its claim that it did not
construction safety and health of workers, advantage. respondents are not residents of the withhold the full amount of the meals’
shall be integrated to the overall project National Capital Region. The board and value, Our Haus is burdened to present
cost. The rationale behind this is to ensure Under the purpose test, lodging provision might have been a evidence to corroborate its claim. The
that the living accommodation of the substantial consideration must be given to substantial consideration in their records however, are bereft of any
workers is not substandard and is strictly the nature of the employer’s business in acceptance of employment in a place evidence to support Our Haus’ meal
compliant with the DOLE’s OSH criteria. relation to the character or type of work distant from their provincial residences. expense computation. Even the value it
performed by the employees involved. assigned for the respondents’ living
The Purpose Test. Even if a Based on these considerations, accommodations was not supported by
benefit is customarily provided by the Our Haus is engaged in the we conclude that even under the purpose any documentary evidence. Without any
trade, it must still pass the purpose test set construction business, a labor intensive test, the subsidized meals and free lodging corroborative evidence, it cannot be said
by jurisprudence. Under this test, if a enterprise. The success of its projects is provided by Our Haus are actually that Our Haus complied with this third
benefit or privilege granted to the largely a function of the physical strength, supplements. Although they also work to requisite.
employee is clearly for the employer’s vitality and efficiency of its laborers. Its benefit the respondents, an analysis of the
convenience, it will not be considered as a business will be jeopardized if its workers nature of these benefits in relation to Our i.
facility but a supplement. Here, careful are weak, sickly, and lack the required Haus’ business shows that they were Bonus included/not included; a
consideration is given to the nature of the energy to perform strenuous physical given primarily for Our Haus’ greater demandable obligation
employer’s business in relation to the work activities. Thus, by ensuring that the convenience and advantage. If weighed
performed by the employee. This test is workers are adequately and well fed, the on a scale, the balance tilts more towards Metro Transit Organizations, Inc. vs.
used to address inequitable situations employer is actually investing on its Our Haus’ side. Accordingly, their values NLRC, G.R. No. 116008, July 11, 1995,
wherein employers consider a benefit business. cannot be considered in computing the Feliciano, J.
deductible from the wages even if the total amount of the respondents’ wages.
factual circumstances show that it clearly Unlike in office enterprises where Under the circumstances, the daily wages Doctrine. Basically, Metro's
redounds to the employers’ greater the work is focused on desk jobs, the paid to the respondents are clearly below argument is that such increase was merely
advantage. construction industry relies heavily and the prescribed minimum wage rates in the a bonus given to supervisory employees. A
directly on the physical capacity and years 2007-2010. "bonus" is an amount granted and paid to
While the rules serve as the initial endurance of its workers. This is not to say an employee for his industry and loyalty
test in characterizing a benefit as a facility, that desk jobs do not require muscle The provision of deductible which contributed to the success of the
the purpose test additionally recognizes strength; we simply emphasize that in the facilities must be voluntarily accepted employer's business and made possible
that the employer and the employee do construction business, bulk of the work in writing by the employee. These five the realization of profits. It is something
not stand at the same bargaining positions performed are strenuous physical kasunduans were also undated, making us given in addition to what is ordinarily
on benefits that must or must not form part activities. wonder if they had really been executed received by or strictly due to the recipient.
of an employee’s wage. In the ultimate when respondents first assumed their
analysis, the purpose test seeks to prevent Moreover, in the construction jobs. Moreover, in the earlier sinumpaang The general rule is that a bonus
a circumvention of the minimum wage law. business, contractors are usually faced salaysay by Our Haus’ four employees, it is a gratuity or an act of liberality which the
with the problem of meeting target was not mentioned that they also executed recipient has no right to demand as a
Ultimately, the real difference lies deadlines. More often than not, work is a kasunduan for their board and lodging matter of right. A bonus, however, is a
not on the kind of the benefit but on the performed continuously, day and night, in benefits. demandable or enforceable obligation
when it is made part of the wage or salary employees had the right to expect contract. Verily, by virtue of its
or compensation of the We conclude that the supervisory rectification of that distortion. incorporation in the CBA Side Agreements,
employee. Whether or not a bonus forms employees, who then (i.e., on 17 April the grant of 14th, 15th and 16th month
part of wages depends upon the 1989) had, unlike the rank-and-file Eastern Telecoms Philippines, Inc. vs. bonuses has become more than just an
circumstances and conditions for its employees, no CBA governing the terms Eastern Telecoms Employees Union, act of generosity on the part of ETPI but a
payment. If it is additional compensation and conditions of their employment, had G.R. No. 185665, February 8, 2012, contractual obligation it has undertaken.
which the employer promised and agreed the right to rely on the company practice of Mendoza, J. Moreover, the continuous conferment of
to give without any conditions imposed for unilaterally correcting the wage distortion bonuses by ETPI to the union members
its payment, such as success of effects of a salary increase given to the Doctrine. A reading of the CBA from 1998 to 2002 by virtue of the Side
business or greater production or output, rank-and-file employees, by giving the provision reveals that the same provides Agreements evidently negates its
then it is part of the wage. But if it is paid supervisory employees a corresponding for the giving of 14th, 15th and 16th month argument that the giving of the subject
only if profits are realized or if a certain salary increase plus a premium. For bonuses without qualification. The wording bonuses is a management prerogative.
level of productivity is achieved, it can not reasons, however, shortly to be stated in of the provision does not allow any other
be considered part of the wage. Where it the disposition of the second issue, we interpretation. There were no conditions Granting arguendo that the CBA
is not payable to all but only to some hold that the P550.00 increase is specified in the CBA Side Agreements for Side Agreement does not contractually
employees and only when their labor demandable by SEAM only in respect of the grant of the benefits contrary to the bind petitioner ETPI to give the subject
becomes more efficient or more the period beginning 17 April 1989 and claim of ETPI that the same is justified bonuses, nevertheless, the Court finds
productive, it is only an inducement for ending on 30 November 1989. only when there are profits earned by the that its act of granting the same has
efficiency, a prize therefor, not a part of the company. Terse and clear, the said become an established company practice
wage. It is true enough that, in the provision does not state that the subject such that it has virtually become part of
present case, the wage distortion to be bonuses shall be made to depend on the the employees’ salary or wage. A bonus
In the case at bar, the increase of corrected by the award of P550.00 ETPI’s financial standing or that their may be granted on equitable consideration
P550.00 sought by private respondent increase for supervisory employees payment was contingent upon the when the giving of such bonus has been
SEAM was neither an inducement nor was beginning 17 April 1989, was due to the realization of profits. Neither does it state the company’s long and regular practice.
it contingent on (a) the success of the time gap between the effectivity date (17 that if the company derives no profits, no
business of petitioner Metro; or (b) the April 1989) of the increase of P500.00 per bonuses are to be given to the employees. ii.
increased production or work output of the month given to rank-and-file employees In fine, the payment of these bonuses was Sales commissions
company or (c) the realization of profits. under their CBA and the effectivity date (1 not related to the profitability of business
The demand for this increase was based December 1989) of the P800.00 increase operations. Philippine Duplicators, Inc. vs. NLRC,
on a company practice, admitted by Metro, given to supervisory employees under G.R. No. 110068, February 15, 1995,
of granting a salary increase (and a their own CBA. It is also true that had the The records are also bereft of Feliciano, J.
premium) to supervisory employees P800.00 increase to supervisory any showing that the ETPI made it clear
whenever rank-and-file employees were employees been made retroactive to 17 before or during the execution of the Side Doctrine. In other words, the
granted a salary increase. That those April 1989 by an appropriate synchronizing Agreements that the bonuses shall be sales commissions received for every
increases were precisely designed to provision in the Metro-SEAM CBA, no subject to any condition. Indeed, if ETPI duplicating machine sold constituted part
correct or minimize the wage distortion wage distortion would have arisen. The and ETEU intended that the subject of the basic compensation or remuneration
effects of increases given to rank-and-file fact, however, remains that Metro and bonuses would be dependent on the of the salesmen of Philippine Duplicators
employees (under their CBA or under SEAM did not agree upon such remedy in company earnings, such intention should for doing their job. The portion of the
Wage Orders), highlights the fact that their CBA and that the CBA increase given have been expressly declared in the Side salary structure representing commissions
those increases were part of the wage to rank-and-file employees did produce a Agreements or the bonus provision should simply comprised an automatic increment
structure of supervisory employees. The distortion effect by obliterating or have been deleted altogether. In the to the monetary value initially assigned to
demanded increase therefore is not a drastically reducing the previous gap absence of any proof that ETPI’s consent each unit of work rendered by a salesman.
bonus that is generally not demandable as between the salary rates of rank-and-file was vitiated by fraud, mistake or duress, it Especially significant here also is the fact
a matter of right. The demanded increase, and supervisory employees. The point to is presumed that it entered into the Side that the fixed or guaranteed portion of the
in this instance, is an enforceable be stressed is that considering the prior Agreements voluntarily, that it had full wages paid to the Philippine Duplicators'
obligation so far as the supervisory practice of petitioner Metro, its supervisory knowledge of the contents thereof and that salesmen represented only 15%-30% of
employees of Metro are concerned. it was aware of its commitment under the an employee's total earnings in a year.
 Doctrine. We hold that such employees. If We are to follow the theory
The Third Division held, correctly, deductions are not authorized. In the In short, the benefit or privilege of the herein petitioners, then a crew
that the sales commissions were an coastwise business of transportation of given to the employee which constitutes member, who used to receive a monthly
integral part of the basic salary structure of passengers and freight, the men who an extra remuneration above and over his wage of P100.00, before August 4, 1951,
Philippine Duplicators' employees compose the complement of a vessel are basic or ordinary earning or wage, is with no deduction for meals, after said
salesmen. These commissions are not provided with free meals by the supplement; and when said benefit or date, would receive only P86.00 monthly
overtime payments, nor profit-sharing shipowners, operators or agents, because privilege is part of the laborers' basic (after deducting the cost of his meals at
payments nor any other fringe benefit. they hold on to their work and duties, wages, it is a facility. The criterion is not so P.40 per meal), which would be very much
Thus, the salesmen's commissions, regardless of "the stress and strain much with the kind of the benefit or item less than the P122.00 monthly minimum
comprising a pre-determined percent of concomitant of a bad weather, unmindful (food, lodging, bonus or sick leave) given, wage, fixed in accordance with the
the selling price of the goods sold by each of the dangers that lurk ahead in the midst but its purpose. Considering, therefore, as Minimum Wage Law. Instead of benefiting
salesman, were properly included in the of the high seas." definitely found by the respondent court him, the law will adversely affect said crew
term "basic salary" for purposes of that the meals were freely given to crew member. Such interpretation does not
computing their 13th month pay. It is argued that the food or meals members prior to August 4, 1951, while conform with the avowed intention of
given to the deck officers, marine they were on the high seas "not as part of Congress in enacting the said law.
We recognize that both engineers and unlicensed crew members their wages but as a necessary matter in
productivity bonuses and sales in question, were mere "facilities" which the maintenance of the health and One should not overlook a fact
commissions may have an incentive effect. should be deducted from wages, and not efficiency of the crew personnel during the fully established, that only unlicensed crew
But there is reason to distinguish one from "supplements" which, according to said voyage", the deductions therein made for members were made to pay for their
the other here. Productivity bonuses are section 19, should not be deducted from the meals given after August 4, 1951, meals or food, while the deck officers and
generally tied to the productivity or profit such wages, because it is provided should be returned to them, and the marine engineers receiving higher pay and
generation of the employer corporation. therein: "Nothing in this Act shall deprive operator of the coastwise vessels affected provided with better victuals, were not.
Productivity bonuses are not directly an employee of the right to such fair should continue giving the same benefit. This pictures in no uncertain terms, a great
dependent on the extent an individual wage ... or in reducing supplements and unjust discrimination obtaining in the
employee exerts himself. A productivity furnished on the date of enactment." In the In the case of Cebu Autobus present case.
bonus is something extra for which no case of Atok-Big Wedge Assn. v. Atok-Big Company v. United Cebu Autobus
specific additional services are rendered Wedge Co., the two terms are defined as Employees Assn., the company used to c. Equal pay for work
by any particular employee and hence not follows — pay to its drivers and conductors, who of equal value
legally demandable, absent a contractual were assigned outside of the City limits,
undertaking to pay it. Sales commissions, "Supplements", therefore, aside from their regular salary, a certain International School Alliance of
on the other hand, such as those paid constitute extra remuneration or percentage of their daily wage, as Educators vs. Quisumbing, G.R. No.
in Duplicators, are intimately related to or special privileges or benefits allowance for food. Upon the effectivity of 128845, June 1, 2000, Kapunan, J.
directly proportional to the extent or given to or received by the the Minimum Wage Law, however, that
energy of an employee's endeavors. laborers over and above their privilege was stopped by the company. Doctrine. The foregoing
Commissions are paid upon the specific ordinary earnings or wages. The order CIR to the company to continue provisions (general principles of law and
results achieved by a salesman-employee. "Facilities", on the other hand, granting this privilege, was upheld by this the Constitution) impregnably
It is a percentage of the sales closed by a are items of expense necessary Court. institutionalize in this jurisdiction the long
salesman and operates as an integral part for the laborer's and his family's honored legal truism of "equal pay for
of such salesman's basic pay. existence and subsistence so The shipping companies argue equal work." Persons who work with
that by express provision of law that the furnishing of meals to the crew substantially equal qualifications, skill,
iii. (Sec. 2[g]), they form part of the before the effectivity of Rep. Act No. 602, effort and responsibility, under similar
Meal coupons wage and when furnished by the is of no moment, because such conditions, should be paid similar
employer are deductible circumstance was already taken into salaries. This rule applies to the School, its
States Marine Corp. vs. Cebu therefrom, since if they are not so consideration by Congress, when it stated "international character" notwithstanding.
Seamen’s Asso., Inc., G.R. No. L-12444, furnished, the laborer would that "wage" includes the fair and
February 28, 1963, Paredes, J. spend and pay for them just the reasonable value of boards customarily The School contends that
same. furnished by the employer to the petitioner has not adduced evidence that
local-hires perform work equal to that of with it the fundamental idea of does not deserve the sympathy of this (c) In cases where the
foreign-hires. The Court finds this compensation for services Court. employer is authorized by law
argument a little cavalier. If an employer rendered. or regulations issued by the
accords employees the same position and d. Withholding of Secretary of Labor.
rank, the presumption is that these While we recognize the need of wages
employees perform equal work. This the School to attract foreign-hires, salaries As correctly pointed out by the
presumption is borne by logic and human should not be used as an enticement to SHS Perforated Materials vs. Diaz, G.R. LA, "absent a showing that the withholding
experience. If the employer pays one the prejudice of local-hires. The local-hires No. 185814, October 13, 2010, Mendoza, of complainant’s wages falls under the
employee less than the rest, it is not for perform the same services as foreign-hires J. exceptions provided in Article 113, the
that employee to explain why he receives and they ought to be paid the same withholding thereof is thus unlawful."
less or why the others receive more. That salaries as the latter. For the same reason, Doctrine. ART. 116. Withholding
would be adding insult to injury. The the "dislocation factor" and the foreign- of wages and kickbacks prohibited. – It Milan vs. NLRC, G.R. No. 202961,
employer has discriminated against that hires' limited tenure also cannot serve as shall be unlawful for any person, directly or February 4, 2015, Leonen, J. (*This is a
employee; it is for the employer to explain valid bases for the distinction in salary indirectly, to withhold any amount from the possible Bar problem)
why the employee is treated unfairly. rates. The dislocation factor and limited wages of a worker or induce him to give
tenure affecting foreign-hires are up any part of his wages by force, stealth, ISSUE: Is the refusal to return company’s
The employer in this case has adequately compensated by certain intimidation, threat or by any other means property a valid reason under Art. 113(c) to
failed to discharge this burden. There is no benefits accorded them which are not whatsoever without the worker’s consent. withhold employee’s separation benefits?
evidence here that foreign-hires perform enjoyed by local-hires, such as housing,
25% more efficiently or effectively than the transportation, shipping costs, taxes and Any withholding of an employee’s HELD: Yes. The Civil Code provides that
local-hires. Both groups have similar home leave travel allowances. wages by an employer may only be the employer is authorized to withhold
functions and responsibilities, which they allowed in the form of wage deductions wages for debts due:
perform under similar working conditions. The Constitution enjoins the under the circumstances provided in
State to "protect the rights of workers and Article 113 of the Labor Code, as set forth Article 1706. Withholding of the
The School cannot invoke the promote their welfare," "to afford labor full below: wages, except for a debt due, shall not be
need to entice foreign-hires to leave their protection." The State, therefore, has the made by the employer
domicile to rationalize the distinction in right and duty to regulate the relations ART. 113. Wage Deduction. – No .
salary rates without violating the principle between labor and capital. These employer, in his own behalf or in behalf of "Debt" in this case refers to any
of equal work for equal pay. relations are not merely contractual but any person, shall make any deduction obligation due from the employee to the
are so impressed with public interest that from the wages of his employees, except: employer. It includes any accountability
"Salary" is defined in Black's Law labor contracts, collective bargaining that the employee may have to the
Dictionary (5th ed.) as "a reward or agreements included, must yield to the (a) In cases where the worker employer. There is no reason to limit its
recompense for services performed." common good. Should such contracts is insured with his consent by scope to uniforms and equipment, as
Similarly, the Philippine Legal contain stipulations that are contrary to the employer, and the petitioners would argue.
Encyclopedia states that "salary" is the public policy, courts will not hesitate to deduction is to recompense
"[c]onsideration paid at regular intervals for strike down these stipulations. the employer for the amount More importantly, respondent
the rendering of services." In Songco paid by him as premium on the Solid Mills and NAFLU, the union
v. National Labor Relations In this case, we find the point-of- insurance; representing petitioners, agreed that the
Commission, we said that: hire classification employed by respondent release of petitioners’ benefits shall be
School to justify the distinction in the (b) For union dues, in cases "less accountabilities."
"salary" means a recompense or salary rates of foreign-hires and local hires where the right of the worker
consideration made to a person to be an invalid classification. There is no or his union to check-off has "Accountability," in its ordinary
for his pains or industry in reasonable distinction between the been recognized by the sense, means obligation or debt. The
another man's business. Whether services rendered by foreign-hires and employer or authorized in ordinary meaning of the term
it be derived from "salarium," or local-hires. The practice of the School of writing by the individual "accountability" does not limit the definition
more fancifully from "sal," the pay according higher salaries to foreign-hires worker concerned; and of accountability to those incurred in the
of the Roman soldier, it carries contravenes public policy and, certainly, worksite. As long as the debt or obligation
was incurred by virtue of the employer- recognized this right of the employer when e. Direct payment deserves scant consideration. No doubtful
employee relationship, generally, it shall it ruled that the employee in that case was principle or difficult question of law is involved in
be included in the employee’s not constructively dismissed. Thus: this case. The guidelines set by the law
accountabilities that are subject to d. Non-diminution of are not difficult to decipher. The
clearance procedures. There was valid reason for benefits principle voluntariness of the grant of the benefit
respondents’ withholding of petitioner’s was manifested by the number of years
It may be true that not all salary for the month of February 2000. Central Azucarera de Tarlac vs. Central the employer had paid the benefit to its
employees enjoyed the privilege of staying Petitioner does not deny that he is Azucarera de Tarlac Labor Union-NLU, employees. Petitioner only changed the
in respondent Solid Mills’ property. indebted to his employer in the amount of G.R. No. 188949, July 26, 2010, formula in the computation of the 13th-
However, this alone does not imply that around 95,000.00. Respondents explained Nachura, J. month pay after almost 30 years and only
this privilege when enjoyed was not a that petitioner’s salary for the period of after the dispute between the
result of the employer-employee February 1-15, 2000 was applied as partial Doctrine. As correctly ruled by management and employees erupted.
relationship. Those who did avail of the payment for his debt and for withholding the CA, the practice of petitioner in giving This act of petitioner in changing the
privilege were employees of respondent taxes on his income; while for the period of 13th-month pay based on the employees’ formula at this time cannot be sanctioned,
Solid Mills. Petitioners’ possession should, February 15-28, 2000, petitioner was gross annual earnings which included the as it indicates a badge of bad faith.
therefore, be included in the term already on absence without leave, hence, basic monthly salary, premium pay for
"accountability." was not entitled to any pay. work on rest days and special holidays, g. Preferential right in
night shift differential pay and holiday pay case of bankruptcy
Accountabilities of employees are The law does not sanction a continued for almost thirty (30) years and
personal. They need not be uniform situation where employees who do not has ripened into a company policy or DBP vs. NLRC, G.R. Nos. 100264-81,
among all employees in order to be even assert any claim over the employer’s practice which cannot be unilaterally January 29, 1993, Gutierrez, J. (*This
included in accountabilities incurred by property are allowed to take all the withdrawn. was asked in the 2016 Jurist Mock Bar
virtue of an employer-employee benefits out of their employment while they Examination)
relationship. Petitioners do not simultaneously withhold possession of Article 100 of the Labor Code,
categorically deny respondent Solid Mills’ their employer’s property for no rightful otherwise known as the Non-Diminution Doctrine. We have repeatedly stressed
ownership of the property, and they do not reason. Withholding of payment by the Rule, mandates that benefits given to that before the workers' preference
claim superior right to it. What can be employer does not mean that the employees cannot be taken back or provided by Article 110 may be invoked,
gathered from the findings ofthe Labor employer may renege on its obligation to reduced unilaterally by the employer there must first be a declaration of
Arbiter, National Labor Relations pay employees their wages, termination because the benefit has become part of bankruptcy or a judicial liquidation of the
Commission, and the Court ofAppeals is payments, and due benefits. The the employment contract, written or employer's business.
that respondent Solid Mills allowed the use employees’ benefits are also not being unwritten. The rule against diminution of
of its property for the benefit of petitioners reduced. It is only subjected to the benefits applies if it is shown that the grant In DBP v. Santos, supra, the
as its employees. Petitioners were merely condition that the employees return of the benefit is based on an express Court discussed the import of Article 110
allowed to possess and use it out of properties properly belonging to the policy or has ripened into a practice over a and Section 10 of Rule VIII, Book III and
respondent Solid Mills’ liberality. The employer. This is only consistent with the long period of time and that the practice is stated:
employer may, therefore, demand the equitable principle that "no one shall be consistent and deliberate. Nevertheless,
property at will. unjustly enriched or benefited at the the rule will not apply if the practice is due It is quite clear from the
expense of another." to error in the construction or application of provisions that a declaration of bankruptcy
The return of the property’s a doubtful or difficult question of law. But or a judicial liquidation must be present
possession became an obligation or For these reasons, we cannot even in cases of error, it should be shown before the worker's preference may be
liability on the part of the employees when hold that petitioners are entitled to interest that the correction is done soon after enforced. Thus, Article 110 of the Labor
the employer-employee relationship of their withheld separation benefits. discovery of the error. Code and its implementing rule cannot be
ceased. Thus, respondent Solid Mills has These benefits were properly withheld by invoked by the respondents in this case
the right to withhold petitioners’ wages and respondent Solid Mills because of their The argument of petitioner that absent a formal declaration of bankruptcy
benefits because of this existing debt or refusal to return its property. the grant of the benefit was not voluntary or a liquidation order.
liability. In Solas v. Power and Telephone and was due to error in the interpretation xxx xxx xxx
Supply Phils., Inc., et al., this court of what is included in the basic salary
 Moreover, the reason behind the Code although it considers claims and preference in the discharge of the funds of although its impact is to move it from
necessity for a judicial proceeding or a credits under Article 2242 as statutory the judgment debtor. second priority to first priority in the order
proceeding in rem before the concurrence liens. Neither does the De of preference established by Article 2244
and preference of credits may be applied Barreto case . . . . In the words of Republic v. of the Civil Code.
was explained by this Court in the case Peralta, Article 110 of the Labor Code
of Philippines Savings Bank v. Lantin. We The claims of all creditors does not purport to create a lien in favor of Clearly, even if DBP and the
said: whether preferred or non-preferred, the workers or employees for unpaid wages private respondents assert their preferred
identification of the preferred ones and the either upon all of the properties or upon credits in a judicial proceeding, the
The proceedings in the court totality of the employer's asset should be any particular property owned by their former's claim must first be satisfied.
below do not partake of the nature of the brought into the picture. There can then be employer. Claims for unpaid wages do not
insolvency proceedings or settlement of a an authoritative, fair, and binding therefore fall at all within the category of Article 110 of the Labor Code has
decedent's estate. The action filed by adjudication instead of the piece meal specially preferred claims established been amended by R.A. No. 6715 and now
Ramos was only to collect the unpaid cost settlement which would result from the under Articles 2241 and 2242 of the Civil reads: Worker preference in case of
of the construction of the duplex questioned decision in this case. Code, except to the extent that such bankruptcy. — In the event of bankruptcy
apartment. It is far from being a general claims for unpaid wages are already or liquidation of an employer's business,
liquidation of the estate of the Tabligan The NLRC, therefore, committed covered Article 2241, number 6: "claims his workers shall enjoy first preference as
spouses. grave abuse of discretion when it affirmed for laborers" wages, on the goods regards their unpaid wages and other
the labor arbiter's ruling that the workers' manufactured or the work done; or by monetary claims, any provision of law to
Insolvency proceedings and preference espoused in Article 110 may be Article 2242, number 3: "claims of laborers the contrary notwithstanding. Such unpaid
settlement of a decedent's estate are both applied even in the absence of a and other workers engaged in the wages, and monetary claims shall be paid
proceedings in rem which are binding declaration of bankruptcy or a liquidation construction, reconstruction or repair of in full before the claims of the Government
against the whole world. All persons order. buildings, canals and other works, upon and other creditors may be paid.
having interest in the subject matter said buildings, canals and other works. To
involved, whether they were notified or We must also emphasize that the extent that claims for unpaid wages fall We ruled in DBP v. NLRC, supra,
not, are equally bound. Consequently, a DBP's lien on RHI's mortgaged assets, outside the scope of Article 2241, number that the amendment "expands worker
liquidation of similar import or other being a mortgage credit, is a special 6 and 2242, number 3, they would come preference to cover not only unpaid wages
equivalent general liquidation must also preferred credit under Article 2242 of the within the ambit of the category of ordinary but also other monetary claims to which
necessarily be a proceeding in rem so that Civil Code while the workers' preference is preferred credits under Article 2244. even claims of the Government must be
all interested persons whether known to an ordinary preferred credit under Article deemed subordinate." Hence, under the
the parties or not may be bound by such 2244. The DBP anchors its claim on a new law, even mortgage credits are
proceeding. mortgage credit. A mortgage directly and subordinate to workers' claims.
Thus, in DBP v. NLRC, it was immediately subjects the property upon
In the case at bar, although the held: A distinction should be made which it is imposed, whoever the In this connection, respondent
lower court found that "there were no between a preference of credit and a lien. possessor may be, to the fulfillment of the NLRC ruled: Lastly, while we are
known creditors other than the plaintiff and A preference applies only to claims which obligation for whose security it was cognizant of the pronouncement of the
the defendant herein", this cannot be do not attach to specific properties. A lien constituted (Article 2176, Civil Code). It Supreme Court with respect to Art. 110
conclusive. It will not bar other creditors in creates a charge on a particular property. creates a real right which is enforceable and while we hold in respect said
the event they show up and present their The right of first preference as regards against the whole world. It is a lien on an pronouncements, we are of the earnest
claims against the petitioner bank, unpaid wages recognized by Article 110 identified immovable property, which a view that considering that Art. 110 has
claiming that they also have preferred does not constitute a lien on the property preference is not. A recorded mortgage been amended by RA 6715, complainants'
liens against the property involved. of the insolvent debtor in favor of workers. credit is a special preferred credit under preference over government claims and
Consequently, Transfer Certificate of Title It is but a preference of credit in their favor, Article 2242 (5) of the Civil Code on other creditors be adhered to.
No. 101864 issued in favor of the bank a preference in application. It is a method classification of credits. The preference
which is supposed to be indefeasible adopted to determine and specify the given by Article 110, when not falling within R.A. No. 6715, however, took
would remain constantly unstable and order in which credits should be paid in the Article 2241 (6) and Article 2242 (3) of the effect only on March 21, 1989. The
questionable. Such could not have been final distribution of the proceeds of the Civil Code and not attached to any specific amendment cannot therefore be
the intention of Article 2243 of the Civil insolvent's assets. It is a right to a first property, is an ordinary preferred credit retroactively applied to, nor can it affect,
the mortgage credit which was secured by losing party in a litigation. The basis of this differentials in NLRC-NCR Certified Case file a claim for fees in the same action only
the petitioner several years prior to its is any of the cases provided by law where No. 0466, private respondent's present before the judgment is reviewed by a
effectivity. such award can be made, such as those claim for attorney's fees may be filed higher tribunal would deprive him of his
authorized in Article 2208, Civil Code, and before the NLRC even though or, better aforestated options and render ineffective
This was our pronouncement is payable not to the lawyer but to the stated, especially after its earlier decision the foregoing pronouncements of this
in DBP v. NLRC: Even if Article 110 and client, unless they have agreed that the had been reviewed and partially affirmed. Court.
its Implementing Rule, as amended, award shall pertain to the lawyer as It is well settled that a claim for attorney's Assailing the rulings of the labor arbiter
should be interpreted to mean "absolute additional compensation or as part thereof. fees may be asserted either in the very and the NLRC, petitioner union insists that
preference," the same should be given action in which the services of a lawyer it is not guilty of unjust enrichment
only prospective effect in line with the It is the first type of attorney's had been rendered or in a separate action. because all attorney's fees due to private
cardinal rule that laws shall have no fees which private respondent demanded respondent were covered by the retainer
retroactive effect, unless the contrary is before the labor arbiter. Also, the present With respect to the first situation, fee of P3,000.00 which it has been
provided (Article 4, Civil Code). Thereby, controversy stems from petitioner's the remedy for recovering attorney's fees regularly paying to private respondent
any infringement on the constitutional apparent misperception that the NLRC has as an incident of the main action may be under their retainer agreement. To be
guarantee on non-impairment of the jurisdiction over claims for attorney's fees availed of only when something is due to entitled to the additional attorney's fees as
obligation of contracts (Section 10, Article only before its judgment is reviewed and the client. Attorney's fees cannot be provided in Part D (Special Billings) of the
III, 1987 Constitution) is also avoided. In ruled upon by the Supreme Court, and that determined until after the main litigation agreement, it avers that there must be a
point of fact, DBP's mortgage credit thereafter the former may no longer has been decided and the subject of the separate mutual agreement between the
antedated by several years the entertain claims for attorney's fees. recovery is at the disposition of the court. union and the law firm prior to the
amendatory law, RA No. 6715. To give The issue over attorney's fees only arises performance of the additional services by
Article 110 retroactive effect would be to It will be noted that no claim for when something has been recovered from the latter. Since there was no agreement
wipe out the mortgage in DBP's favor and attorney's fees was filed by private which the fee is to be paid. as to the payment of the additional
expose it to a risk which it sought to respondent before the NLRC when it acted attorney's fees, then it is considered
protect itself against by requiring a on the money claims of petitioner, nor While a claim for attorney's fees waived.
collateral in the form of real property. before the Supreme Court when it may be filed before the judgment is
reviewed the decision of the NLRC. It was rendered, the determination as to the It is elementary that an attorney
h. Attorney’s Fees only after the High Tribunal modified the propriety of the fees or as to the amount is entitled to have and receive a just and
judgment of the NLRC awarding the thereof will have to be held in abeyance reasonable compensation for services
Traders Royal Bank vs. NLRC, G.R. No. differentials that private respondent filed until the main case from which the lawyer's performed at the special instance and
120592, March 14, 1997, Regalado, J. his claim before the NLRC for a claim for attorney's fees may arise has request of his client. As long as the lawyer
(2016 Bar) percentage thereof as attorney's fees. become final. Otherwise, the was in good faith and honestly trying to
determination to be made by the courts represent and serve the interests of the
Doctrine. There are two It would obviously have been will be premature. Of course, a petition for client, he should have a reasonable
commonly accepted concepts of attorney's impossible, if not improper, for the NLRC attorney's fees may be filed before the compensation for such services. It will thus
fees, the so-called ordinary and in the first instance and for the Supreme judgment in favor of the client is satisfied be appropriate, at this juncture, to
extraordinary. In its ordinary concept, an Court thereafter to make an award for or the proceeds thereof delivered to the determine if private respondent is entitled
attorney's fee is the reasonable attorney's fees when no claim therefor was client. to an additional remuneration under the
compensation paid to a lawyer by his pending before them. Courts generally rule retainer agreement entered into by him
client for the legal services he has only on issues and claims presented to It is apparent from the foregoing and petitioner.
rendered to the latter. The basis of this them for adjudication. Accordingly, when discussion that a lawyer has two options
compensation is the fact of his the labor arbiter ordered the payment of as to when to file his claim for professional The parties subscribed therein to
employment by and his agreement with attorney's fees, he did not in any way fees. Hence, private respondent was well the following stipulations:
the client. modify the judgment of the Supreme within his rights when he made his claim xxx xxx xxx
Court. and waited for the finality of the judgment The Law Firm shall handle cases
In its extraordinary concept, an for holiday pay differential, instead of filing and extend legal services under the
attorney's fee is an indemnity for damages As an adjunctive episode of the it ahead of the award's complete parameters of the following terms and
ordered by the court to be paid by the action for the recovery of bonus resolution. To declare that a lawyer may conditions:
A. GENERAL legal matter referred to 6. Represent any reproduction or
SERVICES the Law Firm. member of the Union in authentication of
1. Assurance that an any proceeding provided documents related to
Associate of the Law B. SPECIAL LEGAL that the particular any matter referred to
Firm shall be designated SERVICES member must give the Law Firm or that
and be available on a 1. Documentation of any his/her assent and that which redound to the
day-to-day basis contract and other legal prior consent be granted benefit of the Union.
depending on the instrument/documents by the principal officers.
Union's needs; arising and/or required Further, the member D. SPECIAL BILLINGS
2. Legal consultation, by your Union which do must conform to the In the event that the
advice and render not fall under the rules and policies of the Union avails of the
opinion on any actual category of its ordinary Law Firm. services duly
and/or anticipatory course of business enumerated in Title B,
situation confronting any activity but requires a C. FEE STRUCTURE the Union shall pay the
matter within the client's special, exhaustive or In consideration of our Law Firm an amount
normal course of detailed study and commitment to render mutually agreed upon
business; preparation; the services enumerated PRIOR to the
3. Proper documentation 2. Conduct or undertake above when required or performance of such
and notarization of any researches and/or necessary, your Union services. The sum
or all transactions studies on special shall pay a monthly agreed upon shall be
entered into by the projects of the Union; retainer fee of THREE based on actual time
Union in its day-to-day 3. Render active and THOUSAND PESOS and effort spent by the
course of business; actual participation or (PHP 3,000.00), payable counsel in relation to the
4. Review all contracts, assistance in in advance on or before importance and
deeds, agreements or conference table the fifth day of every magnitude of the matter
any other legal negotiations with TRB month. referred to by the Union.
document to which the management or any However, charges may
union is a party other third person(s), An Appearance Fee be WAIVED by the Law
signatory thereto but juridical or natural, which shall be Firm if it finds that time
prepared or caused to wherein the presence of negotiable on a case-to- and efforts expended on
be prepared by any counsel is not for mere case basis. the particular services
other third party; consultation except CBA Any and all Attorney's are inconsequential but
5. Represent the Union negotiations which shall Fees collected from the such right of waiver is
in any case wherein the be subject to a specific adverse party by virtue duly reserved for the
Union is a party litigant agreement (pursuant to of a successful litigation Law Firm.
in any court of law or PD 1391 and in relation shall belong exclusively xxx xxx xxx
quasi-judicial body to BP 130 & 227); to the Law Firm.
subject to certain fees 4. Preparation of It is further understood The provisions of the above
as qualified hereinafter; Position Paper(s), that the foregoing shall contract are clear and need no further
6. Lia(i)se with and/or Memoranda or any other be without prejudice to interpretation; all that is required to be
follow-up any pending pleading for and in our claim for done in the instant controversy is its
application or any behalf of the Union; reimbursement of all application. The P3,000.00 which
papers with any 5. Prosecution or out-of-pocket expenses petitioner pays monthly to private
government agency defense of any case covering filing fees, respondent does not cover the services
and/or any private instituted by or against transportation, the latter actually rendered before the
institution which is the Union; and, publication costs, labor arbiter and the NLRC in behalf of the
directly related to any expenses covering former. As stipulated in Part C of the
agreement, the monthly fee is intended payment has no relation We, therefore, cannot favorably
merely as a consideration for the law There is in legal practice to the obligation of the consider the suggestion of petitioner that
firm's commitment to render the services what is called a client to pay his attorney private respondent had already waived his
enumerated in Part A (General Services) "retaining fee," the for the services for right to charge additional fees because of
and Part B (Special Legal Services) of the purpose of which stems which he has retained their failure to come to an agreement as to
retainer agreement. from the realization that him to perform." its payment.
the attorney is disabled
The difference between a from acting as counsel Evidently, the P3,000.00 monthly Firstly, there is no showing that
compensation for a commitment to render for the other side after fee provided in the retainer agreement private respondent unequivocally opted to
legal services and a remuneration for legal he has given between the union and the law firm refers waive the additional charges in
services actually rendered can better be professional advice to to a general retainer, or a retaining fee, as consonance with Part D of the agreement.
appreciated with a discussion of the two the opposite party, even said monthly fee covers only the law firm's Secondly, the prompt actions taken by
kinds of retainer fees a client may pay his if he should decline to pledge, or as expressly stated therein, its private respondent, i.e., serving notice of
lawyer. These are a general retainer, or a perform the "commitment to render the legal services charging lien and filing of motion to
retaining fee, and a special retainer. contemplated services enumerated." The fee is not payment for determine attorney's fees, belie any
on behalf of the latter. It private respondent's execution or intention on his part to renounce his right
A general retainer, or retaining is to prevent undue performance of the services listed in the to compensation for prosecuting the labor
fee, is the fee paid to a lawyer to secure hardship on the attorney contract, subject to some particular case instituted by the union. And, lastly, to
his future services as general counsel for resulting from the rigid qualifications or permutations stated there. adopt such theory of petitioner may
any ordinary legal problem that may arise observance of the rule frustrate private respondent's right to
in the routinary business of the client and that a separate and Generally speaking, where the attorney's fees, as the former may simply
referred to him for legal action. The future independent fee for employment of an attorney is under an and unreasonably refuse to enter into any
services of the lawyer are secured and consultation and advice express valid contract fixing the special agreement with the latter and
committed to the retaining client. For this, was conceived and compensation for the attorney, such conveniently claim later that the law firm
the client pays the lawyer a fixed retainer authorized. "A retaining contract is conclusive as to the amount of had relinquished its right because of the
fee which could be monthly or otherwise, fee is a preliminary fee compensation. We cannot, however, apply absence of the same.
depending upon their arrangement. The given to an attorney or the foregoing rule in the instant petition
fees are paid whether or not there are counsel to insure and and treat the fixed fee of P3,000.00 as full The fact that petitioner and
cases referred to the lawyer. The reason secure his future and sufficient consideration for private private respondent failed to reach a
for the remuneration is that the lawyer is services, and induce respondent's services, as petitioner would meeting of the minds with regard to the
deprived of the opportunity of rendering him to act for the client. have it. payment of professional fees for special
services for a fee to the opposing party or It is intended to services will not absolve the former of civil
other parties. In fine, it is a compensation remunerate counsel for We have already shown that the liability for the corresponding remuneration
for lost opportunities. being deprived, by being P3,000.00 is independent and different therefor in favor of the latter.
retained by one party, of from the compensation which private
A special retainer is a fee for a the opportunity of respondent should receive in payment for Obligations do not emanate only
specific case handled or special service rendering services to the his services. While petitioner and private from contracts. One of the sources of
rendered by the lawyer for a client. A client other and of receiving respondent were able to fix a fee for the extra-contractual obligations found in our
may have several cases demanding pay from him, and the latter's promise to extend services, they Civil Code is the quasi-contract premised
special or individual attention. If for every payment of such fee, in were not able to come into agreement as on the Roman maxim that nemo cum
case there is a separate and independent the absence of an to the law firm's actual performance of alterius detrimento locupletari protest. As
contract for attorney's fees, each fee is express understanding services in favor of the union. Hence, the embodied in our law, certain lawful,
considered a special retainer. to the contrary, is retainer agreement cannot control the voluntary and unilateral acts give rise to
neither made nor measure of remuneration for private the juridical relation of quasi-contract to
As to the first kind of fee, the received in payment of respondent's services. the end that no one shall be unjustly
Court has had the occasion to expound on the services enriched or benefited at the expense of
its concept in Hilado vs. David in this wise: contemplated; its another.
 As early as 1903, we allowed the Article 111 of the Labor Code alone. Said The measure of compensation for
A quasi-contract between the payment of reasonable professional fees article provides: private respondent's services as against
parties in the case at bar arose from to an interpreter, notwithstanding the lack his client should properly be addressed by
private respondent's lawful, voluntary and of understanding with his client as to his Art. 111. Attorney's fees. the rule of quantum meruit long adopted in
unilateral prosecution of petitioner's cause remuneration, on the basis of quasi- — (a) In cases of this jurisdiction. Quantum meruit, meaning
without awaiting the latter's consent and contract. Hence, it is not necessary that unlawful withholding of "as much as he deserves," is used as the
approval. Petitioner cannot deny that it did the parties agree on a definite fee for the wages the culpable basis for determining the lawyer's
benefit from private respondent's efforts as special services rendered by private party may be assessed professional fees in the absence of a
the law firm was able to obtain an award of respondent in order that petitioner may be attorney's fees contract, but recoverable by him from his
holiday pay differential in favor of the obligated to pay compensation to the equivalent to ten percent client.
union. It cannot even hide behind the former. Equity and fair play dictate that of the amount of the
cloak of the monthly retainer of P3,000.00 petitioner should pay the same after it wages recovered. Where a lawyer is employed
paid to private respondent because, as accepted, availed itself of, and benefited xxx xxx xxx without a price for his services being
demonstrated earlier, private respondent's from private respondent's services. agreed upon, the courts shall fix the
actual rendition of legal services is not The implementing provision of amount on quantum meruit basis. In such
compensable merely by said amount. We are not unaware of the old the foregoing article further a case, he would be entitled to receive
ruling that a person who had no states: what he merits for his services.
Private respondent is entitled to knowledge of, nor consented to, or Sec. 11. Attorney's fees.
an additional remuneration for pursuing protested against the lawyer's — Attorney's fees in any It is essential for the proper
legal action in the interest of petitioner representation may not be held liable for judicial or administrative operation of the principle that there is an
before the labor arbiter and the NLRC, on attorney's fees even though he benefited proceedings for the acceptance of the benefits by one sought
top of the P3,000.00 retainer fee he from the lawyer's services. But this recovery of wages shall to be charged for the services rendered
received monthly from petitioner. The law doctrine may not be applied in the present not exceed 10% of the under circumstances as reasonably to
firm's services are decidedly worth more case as petitioner did not object to private amount awarded. The notify him that the lawyer performing the
than such basic fee in the retainer respondent's appearance before the fees may be deducted task was expecting to be paid
agreement. Thus, in Part C thereof on NLRC in the case for differentials. from the total amount compensation therefor. The doctrine
"Fee Structure," it is even provided that all due the winning party. of quantum meruit is a device to prevent
attorney's fees collected from the adverse Viewed from another aspect, undue enrichment based on the equitable
party by virtue of a successful litigation since it is claimed that petitioner obtained In the first place, the fees postulate that it is unjust for a person to
shall belong exclusively to private respondent's legal services and assistance mentioned here are the extraordinary retain benefit without paying for it.
respondent, aside from petitioner's liability regarding its claims against the bank, only attorney's fees recoverable as indemnity
for appearance fees and reimbursement of they did not enter into a special contract for damages sustained by and payable to Over the years and through
the items of costs and expenses regarding the compensation therefor, there the prevailing part. In the second place, numerous decisions, this Court has laid
enumerated therein. is at least the innominate contract of facio the ten percent (10%) attorney's fees down guidelines in ascertaining the real
ut des (I do that you may give). This rule of provided for in Article 111 of the Labor worth of a lawyer's services. These factors
A quasi-contract is based on the law, likewise founded on the principle Code and Section 11, Rule VIII, Book III of are now codified in Rule 20.01, Canon 20
presumed will or intent of the obligor against unjust enrichment, would also the Implementing Rules is the maximum of of the Code of Professional Responsibility
dictated by equity and by the principles of warrant payment for the services of private the award that may thus be and should be considered in fixing a
absolute justice. Some of these principles respondent which proved beneficial to granted. Article 111 thus fixes only the limit reasonable compensation for services
are: (1) It is presumed that a person petitioner's members. In any case, on the amount of attorney's fees the rendered by a lawyer on the basis
agrees to that which will benefit him; (2) whether there is an agreement or not, the victorious party may recover in any judicial of quantum meruit. These are: (a) the time
Nobody wants to enrich himself unjustly at courts can fix a reasonable compensation or administrative proceedings and it does spent and the extent of services rendered
the expense of another; and (3) We must which lawyers should receive for their not even prevent the NLRC from fixing an or required; (b) the novelty and difficulty of
do unto others what we want them to do professional services. However, the value amount lower than the ten percent (10%) the questions involved; (c) the importance
unto us under the same circumstances. of private respondent's legal services ceiling prescribed by the article when of the subject matter; (d) the skill
should not be established on the basis of circumstances warrant it. demanded; (e) the probability of losing
other employment as a result of
acceptance of the proffered case; (f) the be used therefore, as the lone standard in reasonable and fair compensation for the distortion occurred due to the
customary charges for similar services and fixing the exact amount payable to legal services rendered by private implementation of R.A. No. 6640.
the schedule of fees of the IBP chapter to the lawyer by his client for the legal respondent to petitioner before the labor
which the lawyer belongs; (g) the amount services he rendered. Also, while it limits arbiter and the NLRC Notably, the implementation of
involved in the controversy and the the maximum allowable amount of R.A. No. 6640 resulted in the increase
benefits resulting to the client from the attorney's fees, it does not direct the i. Wage Order of P10.00 in the wage rates
services; (h) the contingency or certainty instantaneous and automatic award of of Alcantara, supervisor,
of compensation; (i) the character of the attorney's fees in such maximum limit. j. Wage distortion and Morales and Salvo, both
employment, whether occasional or foremen. They are petitioner’s lowest
established; and (j) the professional It, therefore, behooves the P.I. Manufacturing vs. P.P. paid supervisor and foremen. As a
standing of the lawyer. adjudicator in questions and Manufacturing Supervisors and consequence, the increased wage rates
circumstances similar to those in the case Foremen Association, G.R. No. 167217, of foremen Morales and Salvo exceeded
Here, then, is the flaw we find in at bar, involving a conflict between lawyer February 4, 2008, Sandoval-Gutierrez, that of supervisor Buencuchillo. Also,
the award for attorney's fees in favor of and client, to observe the above guidelines J. the increased wage rate of supervisor
private respondent. Instead of adopting in cases calling for the operation of the Alcantara exceeded those of supervisors
the above guidelines, the labor arbiter principles of quasi-contract and quantum FACTS: The President signed into Buencuchillo and Del Prado.
forthwith but erroneously set the amount of meruit, and to conduct a hearing for the law Republic Act (R.A.) No. Consequently, the P9.79 gap or difference
attorney's fees on the basis of Article 111 proper determination of attorney's fees. 6640 providing, among others, an increase between the wage rate of supervisor Del
of the Labor Code. He completely relied The criteria found in the Code of in the statutory minimum wage and salary Prado and that of supervisor Alcantara
on the operation of Article 111 when he Professional Responsibility are to be rates of employees and workers in the was eliminated. Instead, the latter gained
fixed the amount of attorney's fees at considered, and not disregarded, in private sector. a P.21 lead over Del Prado. Like a domino
P17,574.43. Observe the conclusion assessing the proper amount. Here, the effect, these gaps or differences between
stated in his order. records do not reveal that the parties were ISSUE: Is wage distortion present in this and among the wage rates of all the above
duly heard by the labor arbiter on the case? employees have been substantially
xxx xxx xxx matter and for the resolution of private altered and reduced. It is therefore
FIRST. Art. 111 of the respondent's fees. HELD: Yes. R.A. No. 6727 (Wage undeniable that the increase in the wage
Labor Code, as Rationalization Act) explicitly defines rates by virtue of R.A. No. 6640 resulted in
amended, clearly It is axiomatic that the "wage distortion" as: x x x a situation wage distortion or the elimination of the
declares movant's right reasonableness of attorney's fees is a where an increase in prescribed wage intentional quantitative differences in
to a ten (10%) per cent question of fact. Ordinarily, therefore, we rates results in the elimination or severe the wage rates of the above employees.
of the award due its would have remanded this case for further contraction of intentional quantitative
client. In addition, this reception of evidence as to the extent and differences in wage or salary rates However, while we find the
right to ten (10%) per value of the services rendered by private between and among employee groups in presence of wage distortions, we are
cent attorney's fees is respondent to petitioner. However, so as an establishment as to effectively convinced that the same were cured or
supplemented by Sec. not to needlessly prolong the resolution of obliterate the distinctions embodied in remedied when respondent PIMASUFA
111, Rule VIII, Book III of a comparatively simple controversy, we such wage structure based on skills, entered into the 1987 CBA with petitioner
the Omnibus Rules deem it just and equitable to fix in the length of service, or other logical bases of after the effectivity of R.A. No. 6640. The
Implementing the Labor present recourse a reasonable amount of differentiation. 1987 CBA increased the monthly salaries
Code, as amended. attorney's fees in favor of private of the supervisors by P625.00 and the
xxx xxx xxx respondent. For that purpose, we have Otherwise stated, wage distortion foremen, by P475.00, effective May 12,
duly taken into account the accepted means the disappearance or virtual 1987. These increases re-
As already stated, Article 111 of guidelines therefor and so much of the disappearance of pay differentials established and broadened the gap, not
the Labor Code regulates the amount pertinent data as are extant in the records between lower and higher positions in an only between the supervisors and the
recoverable as attorney's fees in the of this case which are assistive in that enterprise because of compliance with a foremen, but also between them and the
nature of damages sustained by and regard. On such premises and in the wage order. In this case, the Court of rank-and-file employees. Significantly, the
awarded to the prevailing party. It may not exercise of our sound discretion, we hold Appeals correctly ruled that a wage 1987 CBA wage increases
that the amount of P10,000.00 is a almost doubled that of
the P10.00 increase under R.A. No. 6640. or legitimate basis. This classification is The claim of wage distortion
The P625.00/month means P24.03 increa reflected in a differing wage rate for each Petitioner argues that a wage shall also be denied on other reason.
se per day for the supervisors, while of the existing classes of employees" distortion exists, because the The difference in wages between
the P475.00/month means P18.26 increas implementation of the two Wage Orders employees in the same pay scale in
e per day for the foremen. These Wage distortion involves four has resulted in the discrepancy in the different regions is not the mischief sought
increases were to be observed every year, elements: compensation of employees of similar pay to be banished by the law. In fact,
starting May 12, 1987 until July 26, 1989. classification in different regions. Hence, Republic Act No. 6727 (the Wage
Clearly, the gap between the wage rates of 1. An existing petitioner maintains that, as a result of the Rationalization Act), recognizes "existing
the supervisors and those of the foremen hierarchy of positions two Wage Orders, the employees in the regional disparities in the cost of living."
was inevitably re-established. It continued with corresponding affected regions have higher
to broaden through the years. salary rates; compensation than their counterparts of From the above-quoted rationale
the same level in other regions. Several of the law, as well as the criteria
Interestingly, such gap as re- 2. A significant change tables are presented by petitioner to enumerated, a disparity in wages between
established by virtue of the CBA is more in the salary rate of a illustrate that the employees in the regions employees with similar positions in
than a substantial compliance with R.A. lower pay class covered by the Wage Orders are receiving different regions is necessarily expected.
No. 6640. without a concomitant more than their counterparts in the same In insisting that the employees of the same
increase in the salary pay scale in other regions. pay class in different regions should
Prubankers Association vs. Prudential rate of a higher one; receive the same compensation, petitioner
Bank & Trust Company, G.R. No. The Court is not persuaded. has apparently misunderstood both the
131247, January 25, 1999, Panganiban, 3. The elimination of A wage parity between employees meaning of wage distortion and the intent
J. the distinction in different rungs, is not at issue here, but of the law to regionalize wage rates.
between the two a wage disparity between employees in
ISSUE: Is wage distortion present in this levels; and the same rung but located in different It must be understood that
case? regions of the country. varying in each region of the country are
4. The existence of the controlling factors such as the cost of
HELD: No. Elaborating on this statutory distortion in the same Contrary to petitioner's living; supply and demand of basic goods,
definition, this Court ruled: "Wage region of the country. postulation, a disparity in wages between services and necessities; and the
distortion presupposes a classification of employees holding similar positions but in purchasing power of the peso. Other
positions and ranking of these positions at In the present case, it is clear that different regions does not constitute wage considerations underscore the necessity of
various levels. One visualizes a hierarchy no wage distortion resulted when distortion as contemplated by law. As the law. Wages in some areas may be
of positions with corresponding ranks respondent implemented the subject Wage previously enunciated, it is the hierarchy of increased in order to prevent migration to
basically in terms of wages and other Orders in the covered branches. In the positions and the disparity of their the National Capital Region and, hence, to
emoluments. Where a significant change said branches, there was an increase in corresponding wages and other decongest the metropolis. Therefore, what
occurs at the lowest level of positions in the salary rates of all pay classes. emoluments that are sought to be the petitioner herein bewails is precisely
terms of basic wage without a Furthermore, the hierarchy of positions preserved by the concept of wage what the law provides in order to achieve
corresponding change in the other level in based on skills, lengh of service and other distortion. Put differently, a wage distortion its purpose.
the hierarchy of positions, negating as a logical bases of differentiation was arises when a wage order engenders
result thereof the distinction between one preserved. In other words, the quantitative wage parity between employees Petitioner claims that it "does not
level of position from the next higher level, difference in compensation between in different rungs of the organizational insist that the Regional Wage Boards
and resulting in a parity between the different pay classes remained the same in ladder of the same establishment. It bears created pursuant to RA 6727 do not have
lowest level and the next higher level or all branches in the affected region. Put emphasis that wage distortion involves a the authority to issue wage orders based
rank, between new entrants and old hires, differently, the distinction between Pay parity in the salary rates of different pay on the distinctive situations and needs
there exists a wage distortion. . . . . The Class 1 and Pay Class 2, for example, classes which, as a result, eliminates the existing in each region. So also, . . . it
concept of a wage distortion assumes an was not eliminated as a result of the distinction between the different ranks in does not insist that the [B]ank should not
existing grouping or classification of implementation of the two Wage Orders in the same region. implement regional wage orders. Neither
employees which establishes distinctions the said region. Hence, it cannot be said does it seek to penalize the Bank for
among such employees on some relevant that there was a wage distortion. following Wage Order VII-03. . . . What it
simply argues is that it is wrong for the ISSUE: Can NWPC grant wage increase On the other hand, in the "salary-ceiling" administrative regulation cannot extend
Bank to peremptorily abandon a national across the board? (*This was asked in the method, the wage adjustment was to be the law and amend a legislative
wage structure and replace the same with 2016 Jurist Mock Bar Examination) applied to employees receiving a certain enactment. It is axiomatic that the clear
a regionalized structure in violation of the denominated salary ceiling. In other letter of the law is controlling and cannot
principle of equal pay for equal work. And, HELD. No. NWPC has authority to set words, workers already being paid more be amended by a mere administrative rule
it is wrong to say that its act of abandoning minimum wage only. It cannot grant wage than the existing minimum wage (up to a issued for its implementation. Indeed,
its national wage structure is mandated by increase to those already earning above certain amount stated in the Wage Order) administrative or executive acts, orders,
law." minimum wage. R.A. No. 6727 declared it are also to be given a wage increase. and regulations shall be valid only when
a policy of the State to rationalize the they are not contrary to the laws or the
As already discussed above, we fixing of minimum wages and to promote To illustrate: under the "floor Constitution.
cannot sustain this argument. Petitioner productivity-improvement and gain-sharing wage method", it would have been
contradicts itself in not objecting, on the measures to ensure a decent standard of sufficient if the Wage Order simply Where the legislature has
one hand, to the right of the regional wage living for the workers and their families; to set P15.00 as the amount to be added to delegated to an executive or
boards to impose a regionalized wage guarantee the rights of labor to its just the prevailing statutory minimum wage administrative officers and boards
scheme; while insisting, on the other hand, share in the fruits of production; to rates, while in the "salary-ceiling method", authority to promulgate rules to carry out
on a national wage structure for the whole enhance employment generation in the it would have been sufficient if the Wage an express legislative purpose, the rules of
Bank. To reiterate, a uniform national wage countryside through industrial dispersal; Order states a specific salary, such administrative officers and boards, which
structure is antithetical to the purpose of and to allow business and industry as P250.00, and only those earning below have the effect of extending, or which
RA 6727. reasonable returns on investment, it shall be entitled to the salary increase. conflict with the authority-granting statute,
expansion and growth. do not represent a valid exercise of the
The objective of the law also In the present case, the RTWPB rule-making power but constitute an
explains the wage disparity in the example In line with its declared policy, did not determine or fix the minimum wage attempt by an administrative body to
cited by petitioner: Armae Librero, though R.A. No. 6727 created the NWPC, vested rate by the "floor-wage method" or the legislate.
only in Pay Class 4 in Mabolo, was, as a with the power to prescribe rules and "salary-ceiling method" in issuing the
result of the Wage Order, receiving more guidelines for the determination of Wage Order. The RTWPB did not set a It has been said that when the
than Bella Cristobal, who was already in appropriate minimum wage and wage level nor a range to which a wage application of an administrative issuance
Pay Class 5 in Subic. RA 6727 recognizes productivity measures at the regional, adjustment or increase shall be added. modifies existing laws or exceeds the
that there are different needs for the provincial or industry levels; and Instead, it granted an across-the-board intended scope, as in this case, the
different situations in different regions of authorized the RTWPB to determine and wage increase of P15.00 to all employees issuance becomes void, not only for being
the country. The fact that a person is fix the minimum wage rates applicable in and workers of Region 2. In doing so, the ultra vires, but also for being
receiving more in one region does not their respective regions, provinces, or RTWPB exceeded its authority by unreasonable.
necessarily mean that he or she is better industries therein and issue the extending the coverage of the Wage Order
off than a person receiving less in another corresponding wage orders, subject to the to wage earners receiving more than the Thus, the Court finds that Section
region. We must consider, among others, guidelines issued by the NWPC. Pursuant prevailing minimum wage rate, without a 1, Wage Order No. R02-03 is void insofar
such factors as cost of living, fulfillment of to its wage fixing authority, the RTWPB denominated salary ceiling. As correctly as it grants a wage increase to employees
national economic goals, and standard of may issue wage orders which set the daily pointed out by the OSG, the Wage Order earning more than the minimum wage
living. In any event, this Court, in its minimum wage rates, based on the granted additional benefits not rate; and pursuant to the separability
decisions, merely enforces the law. It has standards or criteria set by Article 124 of contemplated by R.A. No. 6727. clause of the Wage Order, Section 1 is
no power to pass upon its wisdom or the Labor Code. declared valid with respect to employees
propriety. In no uncertain terms must it be earning the prevailing minimum wage rate.
In ECOP, the Court declared that stressed that the function of promulgating
Metrobank vs. National Wages and there are two ways of fixing the minimum rules and regulations may be legitimately Prior to the passage of the Wage
Productivity Commission, G.R. No. wage: the "floor-wage" method and the exercised only for the purpose of carrying Order, the daily minimum wage rates in
144322, February 6, 2007, Austria- "salary-ceiling" method. The "floor-wage" out the provisions of a law. The power of Region II was set at P104.00 for the
Martinez, J. method involves the fixing of a administrative agencies is confined to Province of Isabela, P103.00 for the
determinate amount to be added to the implementing the law or putting it into Province of Cagayan, P101.00 for the
prevailing statutory minimum wage rates. effect. Corollary to this guideline is that Province of Nueva Vizcaya, and P100.00
for the Provinces of Quirino and than the cash wage as provided for under Bay Haven vs. Abuan, G.R. No. 160859, enforcement powers of the DOLE
Batanes. Only employees earning the this Act. July 30, 2008, Austria-Martinez, J. (2016 Secretary. Under the former rule, the
above-stated minimum wage rates are Bar Examination) DOLE Secretary had jurisdiction only in
entitled to the P15.00 mandated increase The domestic worker is entitled to cases where the amount of the claim does
under the Wage Order. a thirteenth month pay as provided for by FACTS: Upon complaint of one of the not exceed P5,000.00.
law. respondents, Florentino Abuan, the DOLE,
R.A. No. 10361 (Domestic Workers Act in the exercise of its visitorial, inspection The allegations of Abuan
or Batas Kasambahay) Section 26. Pay Slip. – The and enforcement powers, through its regarding illegal dismissal does not divest
employer shall at all times provide the Regional Director (RD) for the National the DOLE-NCR of its jurisdiction since it
Section 24. Minimum Wage. – domestic worker with a copy of the pay Capital Region (NCR), issued an Order does not hold for other respondents.
The minimum wage of domestic workers slip containing the amount paid in cash commanding petitioners to pay Under Art. 128, the Regional Director can
shall not be less than the following: every pay day, and indicating all respondents a total of P638,187.15 conduct inspections and check all
deductions made, if any. The copies of the corresponding to the latter's claims for violations of labor laws, and enforce
(a) Two thousand five hundred pay slip shall be kept by the employer for a underpayment as petitioners' workers. compliance measures for the benefit of all
pesos (P2,500.00) a month for period of three (3) years. The order was based on the results the employees, without being compelled to
those employed in the National inspection conducted by one of the rely on a complaint that has been filed or
Capital Region (NCR); Section 27. Prohibition on inspectors of the RD showing that New its allegations. In fact, the article is silent
(b) Two thousand pesos Interference in the Disposal of Wages. – It Bay Haven Restaurant committed violation on whether the filing of a complaint is even
(P2,000.00) a month for those shall be unlawful for the employer to of Labor Standards Law (underpayment of required to initiate the exercise of the
employed in chartered cities and interfere with the freedom of any domestic minimum wage, 13th moth pay, regular inspection and enforcement powers.
first class municipalities; and worker to dispose of the latter’s wages. holiday, special holiday, night-shift
(c) One thousand five hundred The employer shall not force, compel or differential) and Occupational Safety and Moreover, the exception clause
pesos (P1,500.00) a month for oblige the domestic worker to purchase Health Standards (non-registration of the under Art. 128(b) is not applicable in this
those employed mother merchandise, commodities or other firm under Rule 1020 of OSHS). The case. In order for the said clause to apply,
municipalities. properties from the employer or from any order of the RD was eventually affirmed by the following elements must concur: (a)
other person, or otherwise make use of the DOLE Secretary. Petitioners went to that the employer contests the findings of
After one (1) year from the any store or services of such employer or CA via petition for certiorari. Hence, the the labor regulations officer and raises
effectivity of this Act, and periodically any other person. case reached the SC. One of the issues thereon; (b) that in order to resolve
thereafter, the Regional Tripartite and contentions of the petitioners is that it is such issues, there is a need to examine
Productivity Wage Boards (RTPWBs) shall Section 28. Prohibition Against the NLRC which has jurisdiction over the evidentiary matters; and (c) that such
review, and if proper, determine and adjust Withholding of Wages. – It shall be case and not the DOLE-NCR considering matters are not verifiable in the normal
the minimum wage rates of domestic unlawful for an employer, directly or the amount of the claims involved. course of inspection. In the present case,
workers. indirectly, to withhold the wages of the the alleged pieces of evidence of petitioner
domestic worker. If the domestic worker ISSUE: Whether or not the DOLE-NCR e.g. contract of lease, payroll sheets, and
Section 25. Payment of leaves without any justifiable reason, any has jurisdiction over this case pursuant to quitclaims were all verifiable in the normal
Wages. – Payment of wages shall be unpaid salary for a period not exceeding its visitorial and enforcement power. course of inspection and, granting that
made on time directly to the domestic fifteen (15) days shall be forfeited. they were not examined by the labor
worker to whom they are due in cash at Likewise, the employer shall not induce HELD: Yes. The visitorial and inspector, they have nevertheless been
least once a month. The employer, unless the domestic worker to give up any part of enforcement powers of the Secretary, thoroughly examined by the Regional
allowed by the domestic worker through a the wages by force, stealth, intimidation, exercised through his representatives, Director and the DOLE Secretary.
written consent, shall make no deductions threat or by any other means whatsoever. encompass compliance with all labor
from the wages other than that which is standards laws and other labor legislation, Ex-Bataan Veterans vs. Sec. of Labor,
mandated by law. No employer shall pay k. Visitorial and regardless of the amount of the claims G.R. No. 152396, November 20, 2007,
the wages of a domestic worker by means enforcement power filed by workers. This has been the rule Carpio, J.
of promissory notes, vouchers, coupons, since R.A. No. 7730 was enacted on June
tokens, tickets, chits, or any object other l. Adjudicatory power 2, 1994, amending Article 128(b) of the FACTS: Private respondents led by
Labor Code, to expand the visitorial and Alexander Pocding (Pocding) instituted a
complaint for underpayment of wages orders to give effect to the labor standards otherwise have been entitled to, and the
against Ex-Bataan Veterans Security provisions of said Code and other labor "(a) That the employee shall have SSS shall in turn pay such amount to the
Agency, Inc. (EBVSAI) before the Regional legislation based on the findings of labor notified her employer of her pregnancy employee concerned."
Office of the Department of Labor and employment and enforcement officer or and the probable date of her childbirth
Employment (DOLE). The Regional Office industrial safety engineer made in the which notice shall be transmitted to the Sec. 2. Nothing in this Act shall be
conducted a complaint inspection and course of inspection. SSS in accordance with the rules and construed as to diminish existing maternity
noted certain violations (non-presentation regulations it may provide; benefits under present laws and
of records, non-payment of holiday pay, Also, this case does not fall to the collective bargaining agreements.
non-payment of rest day premium, exception clause of Art. 128(b) which will "(b) That the payment shall be
underpayment of night shift differential warrant the endorsement of the case to advanced by the employer in two equal R.A. No. 8187 (Paternity Leave Act)
pay, non-payment of service incentive the appropriate Arbitration Branch of the installments within thirty (30) days from the
leave, underpayment of 13th month pay, no NLRC. In order for the said clause to filing of the maternity leave application: Sec. 2. Notwithstanding any law,
registration, no annual medical report, no apply, the following elements must concur: rules and regulations to the contrary, every
annual work accidental report, no safety (a) that the employer contests the findings "(c) That in case of caesarian delivery, married male employee in the private and
committee, and no trained first aider). The of the labor regulations officer and raises the employee shall be paid the daily public sectors shall be entitled to a
Regional Director issued an order ordering issues thereon; (b) that in order to resolve maternity benefit for seventy-eight (78) paternity leave of seven (7) days with full
EBVSAI to pay the affected employees the such issues, there is a need to examine days; pay for the first four (4) deliveries of the
total amount of P763,997-85. Upon evidentiary matters; and (c) that such legitimate spouse with whom he is
appeal to the Secretary of Labor, the latter matters are not verifiable in the normal "(d) That payment of daily maternity cohabiting. The male employee applying
affirmed the RD. When the case reached course of inspection. The rules also benefits shall be a bar to the recovery of for paternity leave shall notify his employer
the CA via petition for certiorari, the latter provide that the employer shall raise such sickness benefits provided by this Act for of the pregnancy of his legitimate spouse
agreed with the ruling of RD and the objections during the hearing of the case the same compensable period of sixty (60) and the expected date of such delivery.
Secretary of Labor. Hence, the case or at any time after receipt of the notice of days for the same childbirth, abortion, or
reached the SC. It is the contention of inspection results. miscarriage; For purposes, of this Act, delivery shall
EBVSAI that RD has no jurisdiction over include childbirth or any miscarriage.
the case since the claims exceeds P5,000. 4. Title III, Arts. 122- "(e) That the maternity benefits
155 provided under this Section shall be paid Sec 3. Definition of Term. - For
ISSUE: Whether or not this case falls only for the first four deliveries after March purposes of this Act, Paternity Leave
within the visitorial and enforcement power RA No. 7322 (Maternity Leave Act) 13, 1973; refers to the benefits granted to a married
of the Secretary of Labor or his duly male employee allowing him not to report
authorized representative. Sec. 1. Section 14-A of Republic "(f) That the SSS shall immediately for work for seven (7) days but continues
Act No. 1161, as amended, is further reimburse the employer of one hundred to earn the compensation therefor, on the
HELD: Yes. In Allied Investigation amended to read as follows: percent (100%) of the amount of condition that his spouse has delivered a
Bureau, Inc. vs. Sec. of Labor, the SC held maternity benefits advanced to the child or suffered a miscarriage for
that Articles 129 and 217 of the Labor "SEC. 14-A. Maternity Leave Benefit. - employee by the employer upon receipt of purposes of enabling him to effectively
Code do not contemplate nor cover the A covered female employee who has paid satisfactory proof of such payment and lend support to his wife in her period of
visitorial and enforcement powers of the at least three monthly maternity legality thereof; and recovery and/or in the nursing of the
Secretary of Labor or his duly authorized contributions in the twelve-month period newly-born child.
representatives. Moreover, RA No. 7730 preceding the semester of her childbirth, "(g) That if an employee should give
explicitly excludes from its coverage abortion or miscarriage and who is birth or suffer abortion or miscarriage R.A. No. 8282 (SSS Law)
Articles 129 and 217 of the Labor Code by currently employed shall be paid a daily without the required contributions having
the phrase "Notwithstanding the provisions maternity benefit equivalent to one been remitted for her by her employer to "SEC. 14. Sickness Benefit. - (a) A
of Articles 129 and 217of this Code to the hundred percent (100%) of her present the SSS, or without the latter having been member who has paid at least three (3)
contrary x x x" thereby retaining and basic salary, allowances and other benefits previously notified by the employer of the monthly contributions in the twelve-month
further strengthening the power of the or the cash equivalent of such benefits for time of the pregnancy, the employer shall period immediately preceding the
Secretary of Labor or his duly authorized sixty (60) days subject to the following pay to the SSS damages equivalent to the semester of sickness or injury and is
representatives to issue compliance conditions: benefits which said employee would confined therefor for more than three (3)
days in a hospital or elsewhere with the "(b) The compensable confinement shall reimbursement within the period
approval of the SSS, shall, for each day of begin on the first day of sickness, and the prescribed in this section resulting in the "(c) That payment of daily maternity
compensable confinement or a fraction payment of such allowances shall be reduction of the benefit or denial of the benefits shall be a bar to the recovery of
thereof, be paid by his employer, or the promptly made by the employer every claim, such employer shall have no right to sickness benefits provided by this Act for
SSS, if such person is unemployed or self- regular payday or on the fifteenth and last recover the corresponding daily allowance the same period for which daily maternity
employed, a daily sickness benefit day of each month, and similarly in the he advanced to the employee member as benefits have been received;
equivalent to ninety percent (90%) of his case of direct payment by the SSS, for as required in this section.
average daily salary credit, subject to the long as such allowances are due and "(d) That the maternity benefits provided
following conditions: payable: Provided, That such allowance "(e)The claim of reimbursement shall be under this section shall be paid only for the
shall begin only after all sick leaves of adjudicated by the SSS within a period of first four (4) deliveries or miscarriages;
"(1) In no case shall the daily sickness absence with full pay to the credit of the two (2) months from receipt thereof:
benefit be paid longer than one hundred employee member shall have been Provided, That should no payment be "(e) That the SSS shall immediately
twenty (120) days in one (1) calendar year, exhausted. received by the employer within one (1) reimburse the employer of one hundred
nor shall any unused portion of the one month after the period prescribed herein percent (100%) of the amount of maternity
hundred twenty (120) days of sickness "(c) One hundred percent (100%) of the for adjudication, the reimbursement shall benefits advanced to the employee by the
benefit granted under this section be daily benefits provided in the preceding thereafter earn simple interest of one employer upon receipt of satisfactory proof
carried forward and added to the total paragraph shall be reimbursed by the SSS percent (1%) per month until paid. of such payment and legality thereof; and
number of compensable days allowable in to said employer upon receipt of
the subsequent year; satisfactory proof of such payment and "(f) The provisions regarding the "(f) That if an employee member should
legality thereof: Provided, That the notification required of the member and give birth or suffer miscarriage without the
"(2) The daily sickness benefit shall not be employer has notified the SSS of the the employer as well as the period within required contributions having been
paid for more than two hundred forty (240) confinement within five (5) calendar days which the claim for benefit or remitted for her by her employer to the
days on account of the same confinement; after receipt of the notification from the reimbursement may be filed shall apply to SSS, or without the latter having been
and employee member: Provided, further, That all claims filed with the SSS. previously notified by the employer of the
if the notification to the SSS is made by time of the pregnancy, the employer shall
"(3) The employee member shall notify his the employer beyond five (5) calendar "SEC. 14-A. Maternity Leave pay to the SSS damages equivalent to the
employer of the fact of his sickness or days after receipt of the notification from Benefit. - A female member who has paid benefits which said employee member
injury within five (5) calendar days after the employee member, said employer at least three (3) monthly contributions in would otherwise have been entitled to.
the start of his confinement unless such shall be reimbursed only for each day of the twelve-month period immediately
confinement is in a hospital or the confinement starting from the tenth preceding the semester of her childbirth or Sec. 43, RA No. 9262 (Anti-Violence
employee became sick or was injured calendar day immediately preceding the miscarriage shall be paid a daily maternity Against Women and their Children Act)
while working or within the premises of the date of notification to the SSS: Provided, benefit equivalent to one hundred percent
employer in which case, notification to the finally, That the SSS shall reimburse the (100%) of her average daily salary credit Entitled to Leave. – Victims under
employer is necessary: Provided, That if employer or pay the unemployed member for sixty (60) days or seventy-eight (78) this Act shall be entitled to take a paid
the member is unemployed or self- only for confinement within the one-year days in case of caesarian delivery, subject leave of absence up to ten (10) days in
employed, he shall directly notify the SSS period immediately preceding the date the to the following conditions: addition to other paid leaves under the
of his confinement within five (5) calendar claim for benefit or reimbursement is Labor Code and Civil Service Rules and
days after the start thereof unless such received by the SSS, except confinement "(a) That the employee shall have notified Regulations, extendible when the
confinement is in a hospital in which case in a hospital in which case the claim for her employer of her pregnancy and the necessity arises as specified in the
notification is also not necessary: benefit or reimbursement must be filed probable date of her childbirth, which protection order.
Provided, further, That in cases where within one (1) year from the last day of notice shall be transmitted to the SSS in
notification is necessary, the confinement confinement. accordance with the rules and regulations Any employer who shall prejudice
shall be deemed to have started not earlier it may provide; the right of the person under this section
than the fifth day immediately preceding "(d) Where the employee member has shall be penalized in accordance with the
the date of notification. given the required notification but the "(b) The full payment shall be advanced by provisions of the Labor Code and Civil
employer fails to notify the SSS of the the employer within thirty (30) days from Service Rules and Regulations. Likewise,
confinement or to file the claim for the filing of the maternity leave application; an employer who shall prejudice any
person for assisting a co-employee who is of the education sector, including the other person who, having authority, offensive environment
a victim under this Act shall likewise be private sector, churches, and faith groups influence or moral ascendancy over for the employee.
liable for discrimination. shall be encouraged. another in a work or training or education
environment, demands, requests or (b) In an education or training
RA No. 9710 (Magna Carta of Women) (b) Enrollment of women in otherwise requires any sexual favor from environment, sexual harassment
nontraditional skills training in vocational the other, regardless of whether the is committed:
Sec. 4(b). "Discrimination and tertiary levels shall be encouraged. demand, request or requirement for
Against Women" refers to any gender- submission is accepted by the object of (1) Against one who is
based distinction, exclusion, or restriction (c) Expulsion and non- said Act. under the care, custody
which has the effect or purpose of readmission of women faculty due to or supervision of the
impairing or nullifying the recognition, pregnant; outside of marriage shall be (a) In a work-related or offender;
enjoyment, or exercise by women, outlawed. No school shall turn out or employment environment, sexual
irrespective of their marital status, on a refuse admission to a female student harassment is committed when: (2) Against one whose
basis of equality of men and women, of solely on the account of her having education, training,
human rights and fundamental freedoms contracted pregnancy outside of marriage (1) The sexual favor is apprenticeship or
in the political, economic, social, cultural, during her term in school. made as a condition in tutorship is entrusted to
civil, or any other field. the hiring or in the the offender;
Sec. 18. Special Leave Benefits employment, re-
It includes any act or omission, for Women. - A woman employee having employment or (3) When the sexual
including by law; policy, administrative rendered continuous aggregate continued employment favor is made a
measure, or practice, that directly or employment service of at least six (6) of said individual, or in condition to the giving of
indirectly excludes or restricts women in months for the last twelve (12) months granting said individual a passing grade, or the
the recognition and promotion of their shall be entitled to a special leave benefit favorable compensation, granting of honors and
rights and their access to and enjoyment of two (2) months with full pay based on terms of conditions, scholarships, or the
of opportunities, benefits, or privileges. her gross monthly compensation following promotions, or payment of a stipend,
surgery caused by gynecological privileges; or the refusal allowance or other
Sec. 12. Equal Treatment disorders. to grant the sexual favor benefits, privileges, or
Before the Law. - The State shall take results in limiting, consideration; or
steps to review and, when necessary, Sec. 8, RA No. 8972 (Solo Parent Act) segregating or
amend and/or repeal existing laws that are classifying the employee (4) When the sexual
discriminatory to women within three (3) Parental Leave. - In addition to which in any way would advances result in an
years from the effectivity of this Act. leave privileges under existing laws, discriminate, deprive or intimidating, hostile or
parental leave of not more than seven (7) diminish employment offensive environment
Sec. 13. Equal Access and working days every year shall be granted opportunities or for the student, trainee
Elimination of Discrimination in to any solo parent employee who has otherwise adversely or apprentice.
Education, Scholarships, and rendered service of at least one (1) year. affect said employee;
Training. - (a) The State shall ensure that Any person who directs
gender stereotypes and images in RA No. 7877 (Anti-Sexual Harrassment (2) The above acts or induces another to commit any
educational materials and curricula are Act) would impair the act of sexual harassment as
adequately and appropriately revised. employee's rights or herein defined, or who
Gender-sensitive language shall be used Sec. 3. Work, Education or privileges under existing cooperates in the commission
at all times. Capacity-building on gender Training -Related, Sexual Harassment labor laws; or thereof by another without which
and development (GAD), peace and Defined. - Work, education or training- it would not have been
human rights, education for teachers, and related sexual harassment is committed by (3) The above acts committed, shall also be held
all those involved in the education sector an employer, employee, manager, would result in an liable under this Act.
shall be pursued toward this end. supervisor, agent of the employer, teacher, intimidating, hostile, or
Partnerships between and among players instructor, professor, coach, trainor, or any
 Sec. 4. Duty of the Employer or incidents of sexual harassment. It action for damages and other affirmative contract is concluded by
Head of Office in a Work-related, shall also conduct the relief. the child's parents or
Education or Training Environment. - It investigation of alleged cases legal guardian, with the
shall be the duty of the employer or the constituting sexual harassment. RA No. 7610, Section 12, as amended express agreement of
head of the work-related, educational or by RA No. 7658 and RA 9231 the child concerned, if
training environment or institution, to In the case of a work- possible, and the
prevent or deter the commission of acts of related environment, the Sec. 2. Section 12 of the same approval of the
sexual harassment and to provide the committee shall be composed of Act, as amended, is hereby further Department of Labor
procedures for the resolution, settlement at least one (1) representative amended to read as follows: and
or prosecution of acts of sexual each from the management, the Employment: Provided,
harassment. Towards this end, the union, if any, the employees from "Sec. 2. Employment of further, That the
employer or head of office shall: the supervisory rank, and from Children - Children below fifteen following requirements
the rank and file employees. (15) years of age shall not be in all instances are
(a) Promulgate appropriate rules employed except: strictly complied with:
and regulations in consultation In the case of the
with and joint1y approved by the educational or training institution, "1) When a child works "(a) The
employees or students or the committee shall be composed directly under the sole employer shall
trainees, through their duly of at least one (1) representative responsibility of his/her ensure the
designated representatives, from the administration, the parents or legal protection,
prescribing the procedure for the trainors, instructors, professors or guardian and where only health, safety,
investigation of sexual coaches and students or members of his/her morals and
harassment cases and the trainees, as the case may be. family are normal
administrative sanctions therefor. employed: Provided, development of
The employer or head of however, That his/her the child;
Administrative sanctions office, educational or training employment neither
shall not be a bar to prosecution institution shall disseminate or endangers his/her life, "(b) The
in the proper courts for unlawful post a copy of this Act for the safety, health, and employer shall
acts of sexual harassment. information of all concerned. morals, nor impairs institute
his/her normal measures to
The said rules and Sec. 5. Liability of the Employer, development: Provided, prevent the
regulations issued pursuant to Head of Office, Educational or Training further, That the parent child's
this subsection (a) shall include, Institution. - The employer or head of or legal guardian shall exploitation or
among others, guidelines on office, educational or training institution provide the said child discrimination
proper decorum in the workplace shall be solidarily liable for damages with the prescribed taking into
and educational or training arising from the acts of sexual harassment primary and/or account the
institutions. committed in the employment, education secondary education; or system and
or training environment if the employer or level of
(b) Create a committee on head of office, educational or training "2) Where a child's remuneration,
decorum and investigation of institution is informed of such acts by the employment or and the
cases on sexual harassment. The offended party and no immediate action is participation in public duration and
committee shall conduct taken. entertainment or arrangement of
meetings, as the case may be, information through working time;
with officers and employees, Sec. 6. Independent Action for cinema, theater, radio, and
teachers, instructors, professors, Damages. - Nothing in this Act shall television or other forms
coaches, trainors, and students preclude the victim of work, education or of media is "(c) The
or trainees to increase training-related sexual harassment from essential: Provided, employer shall
understanding and prevent instituting a separate and independent That the employment formulate and
 implement, than four (4) hours at any given incapacitated, the order of
subject to the day; preference on parental authority "(2) The use, procuring,
approval and as provided for under the Family offering or exposing of a
supervision of "(2) A child fifteen (15) years of Code shall apply. child for prostitution, for
competent age but below eighteen (18) shall the production of
authorities, a not be allowed to work for more "Sec. 12-C. Trust Fund pornography or for
continuing than eight (8) hours a day, and in to Preserve Part of the Working pornographic
program for no case beyond forty (40) hours a Child's Income. - The parent or performances; or
training and week; legal guardian of a working child
skills below eighteen (18) years of age "(3) The use, procuring
acquisition of "(3) No child below fifteen (15) shall set up a trust fund for at or offering of a child for
the child. years of age shall be allowed to least thirty percent (30%) of the illegal or illicit activities,
work between eight o'clock in the earnings of the child whose including the production
"In the above- evening and six o'clock in the wages and salaries from work and trafficking of
exceptional cases where morning of the following day and and other income amount to at dangerous drugs and
any such child may be no child fifteen (15) years of age least two hundred thousand volatile substances
employed, the employer but below eighteen (18) shall be pesos (P200,000.00) annually, for prohibited under existing
shall first secure, before allowed to work between ten which he/she shall render a semi- laws; or
engaging such child, a o'clock in the evening and six annual accounting of the fund to
work permit from the o'clock in the morning of the the Department of Labor and "(4) Work which, by its
Department of Labor following day." Employment, in compliance with nature or the
and Employment which the provisions of this Act. The circumstances in which
shall ensure observance "Sec. 12-B. Ownership, child shall have full control over it is carried out, is
of the above Usage and Administration of the the trust fund upon reaching the hazardous or likely to be
requirements. Working Child's Income. - The age of majority. harmful to the health,
wages, salaries, earnings and safety or morals of
"For purposes other income of the working child "Sec. 12-D. Prohibition children, such that it:
of this Article, the term shall belong to him/her in Against Worst Forms of Child "a) Debases,
"child" shall apply to all ownership and shall be set aside Labor. - No child shall be degrades or
persons under eighteen primarily for his/her support, engaged in the worst forms of demeans the
(18) years of age." education or skills acquisition and child labor. The phrase "worst intrinsic worth
secondarily to the collective forms of child labor" shall refer to and dignity of a
Sec. 3. The same Act, as needs of the any of the following: child as a
amended, is hereby further amended by family: Provided, That not more human being;
adding new sections to be denominated as than twenty percent (20%) of the "(1) All forms of slavery, or
Sections 12-A, 12-B, 12-C, and 12-D to child's income may be used for as defined under the
read as follows: the collective needs of the family. "Anti-trafficking in "b) Exposes
Persons Act of 2003", or the child to
"Sec. 2-A. Hours of Work of a "The income of the practices similar to physical,
Working Child. - Under the working child and/or the property slavery such as sale and emotional or
exceptions provided in Section 12 acquired through the work of the trafficking of children, sexual abuse,
of this Act, as amended: child shall be administered by debt bondage and or is found to
"(1) A child below fifteen (15) both parents. In the absence or serfdom and forced or be highly
years of age may be allowed to incapacity of either of the compulsory labor, stressful
work for not more than twenty parents, the other parent shall including recruitment of psychologically
(20) hours a week: Provided, administer the same. In case children for use in or may
That the work shall not be more both parents are absent or armed conflict; or
prejudice substances, Buddhist Temple of Manila and Baguio (2.) Whether or not Barcenas
morals; or co-agents or City and as President and Chairman of the claim for unpaid wages since May 1982
processes Board of Directors of the Poh Toh Buddhist and filed in 1986 is proper.
"c) Is involving Association of the Phils. Inc. hired the
performed ionizing, petitioner Filomena Barcenas who speaks HELD: (1.) No. Initially, Barcenas is a
underground, radiation, fire, the Chinese language as secretary and regular employee as secretary and
underwater or flammable interpreter. Barcenas duties include interpreter of the Head Monk. The By-
at dangerous substances, receiving and assisting Chinese visitors to Laws of the Association authorized the
heights; or noxious the temple, act as tourist guide for foreign President, in this case Su, to hire
components Chinese visitors, attending to the callers of Barcenas. The approval of the Board is
"d) Involves the and the like, or the Head Monk as well as to the food for required only when the President is
use of to extreme the temple visitors, running errands for the representing the association “in all its
dangerous temperatures, Head Monk such as paying the Meralco, dealings with the public”. Assuming that
machinery, noise levels, or PLDT, MWSS bills and acting as liaison in approval is required, it was tacitly given
equipment and vibrations; or some government offices. Aside from her since no protest was raised until the
tools such as pay and allowances under the law, she present controversy. However, her status
power-driven or "g) Is received an amount of P500.00 per month as regular employee ended when she
explosive performed plus free board and lodging in the temple. returned to Bicol. As found by the NLRC,
power-actuated under Also, Su assumed the responsibility of it was only when Su died when she
tools; or particularly paying the education of Barcenas’ nephew returned to the temple. There was no
difficult as it is alleged that Su has an amorous proof that she was re-hired by the new
"e) Exposes conditions; or relationship with Barcenas. Thereafter, Head Monk.
the child to Barcenas went to Bicol in order to give
physical "h) Exposes birth to her alleged child with Su. Upon (2.) No. the said claim has
danger such the child to death of Su, Barcenas went back to the already prescribed. Under Article 292 of
as, but not biological temple and remained and continued with the Labor Code, all money claims arising
limited to the agents such as her job. However, when Manuel Chua from employer-employee relations must be
dangerous bacteria, fungi, was elected as President and Chairman of filed within three years from the time the
feats of viruses, the Board of Poh Toh Buddhist and Rev. cause of action accrued, otherwise they
balancing, protozoans, Sim Dee was elected as Head Buddhist shall forever be barred.
physical nematodes and Priest, they discontinued the payment of
strength or other parasites; monthly allowance and additional P500 of Bacsin vs. Wahiman, G.R. No. 146053,
contortion, or or Barcenas. Also, she and her son was April 30, 2008, Velasco, Jr. J.
which requires evicted from the temple and compelled to
the manual "i) Involves the sign an undertaking not to return at the FACTS: Dioscoro F. Bacsin is a public
transport of manufacture or temple in consideration of P10,000. school teacher of Pandan Elementary
heavy loads; or handling of Hence, Barcenas filed a complaint before School, Pandan, Mabajao, Camiguin while
explosives and the NLRC. The Labor Arbiter (LA) ruled in Eduardo O. Wahiman is the father of an
"f) Is performed other her favor. However, the NLRC reversed elementary school student, AAA. Bacsin
in an unhealthy pyrotechnic the decision of the LA. The case reached was charged with Misconduct with the Civil
environment products." the SC. It is the contention of Chua and Service Commission (CSC). The charge
exposing the Dee that Barcenas is not an employee of arose from an incident wherein Bacsin
child to Barcenas vs. NLRC, G.R. No. 87210, the temple. called AAA to his office to do an errand.
hazardous July 16, 1990, Medialdea, J. However, when AAA was already inside
working ISSUES: (1.) Whether or not Barcenas is the office, Bacsin fondled her breast five
conditions, FACTS: Chua Se Su (Su for brevity), in an employee of the temple at the time she times making AAA afraid at that time. The
elements, his capacity as the Head Monk of the filed the complaint. CSC found Bacsin guilty of Grave
Misconduct (Acts of Sexual Harassment) Bladimir P 1,000 and ordered Silangga to FACTS: Registered nurses Jeromie
specifically an act constituting sexual Bacsin is guilty of grave bring the latter to the nearest hospital. Escasinas and Evan Rigor Singco were
harassment as defined in Sec. 3 of RA No. misconduct. The term "misconduct" Bladimir was confined at Caybiga engaged by Dr. Jessica Joyce R. Pepito to
7877 and dismissed him from the service. denotes intentional wrongdoing or Community Hospital which is one work in her clinic at Shangri-la in Cebu
Bacsin appealed to CA via Rule 43 but the deliberate violation of a rule of law or kilometer away from the company. where the latter is a retained physician.
latter affirmed the decision of the CSC. standard of behavior. In grave Thereafter, Bladimir was transferred by his Escasinas and Singco filed with the NLRC
Hence, the case reached the SC. misconduct, the elements of corruption, parents to the Quezon City General Regional Arbitration Branch a complaint
clear intent to violate the law, or flagrant Hospital but died therein the following day. for regularization and underpayment of
ISSUE: Whether or not Bacsin committed disregard of established rule must be Hence, Bladimir’s parents, Sps. Cubacub, wages and other benefits claiming that
an act of sexual harassment. manifest. The act of petitioner of fondling filed a complaint for damages against Hao they are regular employees of Shangri-la.
one of his students is against a law, RA and Ocean Builders before RTC Br. 66, Shangri-la contended that Escasinas and
HELD: Yes. As held in Domingo vs. 7877, and is doubtless inexcusable. The Tarlac but the latter dismissed the Singco were not its employees but of Dr.
Rayala, it is true that this provision of RA particular act of petitioner cannot in any complaint. Upon appeal, the CA reversed Pepito whom it retained via MOA pursuant
7877 calls for a ‘demand, request or way be construed as a case of simple the lower court reasoning that failure of to Art. 157 of the Labor Code. The Labor
requirement of a sexual favor.’ But it is not misconduct. Sexually molesting a child is, Hao to bring Bladimir to a better-equipped Arbiter ruled in favor of Escasinas and
necessary that the demand, request, or by any norm, a revolting act that it cannot hospital violated Art. 161 of the Labor Singco. Upon appeal to NLRC, the latter
requirement of a sexual favor be but be categorized as a grave offense. Code. Hence, the case reached the SC. reversed the ruling of the Labor Arbiter.
articulated in a categorical oral or written Parents entrust the care and molding of The CA affirmed the decision of the NLRC.
statement. It may be discerned, with equal their children to teachers, and expect them ISSUE: Whether or not Art. 157 and Art. Hence, the case reached the SC.
certitude, from the acts of the offender. to be their guardians while in school. 161 of the Labor Code are violated in this
The CSC found, as did the CA, that even Petitioner has violated that trust. The case. ISSUE: Whether or not Art. 157 requires
without an explicit demand from petitioner charge of grave misconduct proven the hiring of full-time nurses as regular
his act of mashing the breast of AAA was against petitioner demonstrates his HELD: No. In the present case, there is employees.
sufficient to constitute sexual harassment. unfitness to remain as a teacher and no allegation that the company premises
Moreover, under Section 3 (b) (4) of RA continue to discharge the functions of his are hazardous. Neither is there any HELD: No. Art. 157 does not require the
7877, sexual harassment in an education office. allegation on the number of employees the engagement of full-time nurses as regular
or training environment is committed company has. If Hao’s testimony would be employees of a company employing not
"(w)hen the sexual advances result in an 5.) Book Four, Arts. 156-161 believed, the company had only seven less than 50 workers. Under the foregoing
intimidating, hostile or offensive regular employees and 20 contractual provision, Shangri-la, which employs more
environment for the student, trainee or Ocean Builders Construction Corp. vs. employees ─ still short of the minimum 50 than 200 workers, is mandated to "furnish"
apprentice. Sps. Cubacub, G.R. No. 150898, April workers that an establishment must have its employees with the services of a full-
13, 2011, Carpio-Morales, J. for it to be required to have a full-time time registered nurse, a part-time
NOTES: Pertaining to the issue that registered nurse. physician and dentist, and an emergency
Bacsin was charged with Misconduct but FACTS: Bladimir Cubacub was employed clinic which means that it should provide
convicted with Grave Misconduct. As held as maintenance man by Ocean Builders As found by the trial court and or make available such medical and allied
in Dadubo vs. CSC, the charge against the Construction Corp. at its office in Caloocan borne by the records, petitioner Hao’s services to its employees, not necessarily
respondent in an administrative case need City. Then, he was afflicted with chicken advice for Bladimir to, as he did, take a 3- to hire or employ a service provider.
not be drafted with the precision of an prompting the company’s general day rest and to later have him brought to
information in a criminal prosecution. It is manager, Dennis Hao, to advise him to the nearest hospital constituted "adequate As held, in Philippine Global
sufficient that he is apprised of the rest for three days at the company’s and immediate medical" attendance that Communications vs. De Vera, while it is
substance of the charge against him; what barracks where he lives free of charge. he is mandated, under Art. 161, to provide true that the provision requires employers
is controlling is the allegation of the acts Thereafter, he went about his usual chores to a sick employee in an emergency. to engage the services of medical
complained of, not the designation of the of manning the gate and cleaning practitioners in certain establishments
offense. In the present case, Bacsin was company vehicles. Then, he asked his co- Escasinas vs. Shangri-La’s Mactan depending on the number of their
sufficiently informed of the basis of the worker Silangga to accompany him to his Island Resort, G.R. No. 178827, March employees, nothing is there in the law
charge against him, which was his act of house in Capas, Tarlac; so, he could rest. 4, 2009, Carpio-Morales, J. which says that medical practitioners so
improperly touching one of his students. Upon learning the same, Hao gave engaged be actually hired as employees,
adding that the law, as written, only which are not directly related to Shangri- forklift operators, motor pool and machine subcontractor perform activities which are
requires the employer "to retain", not la’s principal business – operation of shop workers, technicians, trailer drivers, directly related to the main business of the
employ, a part-time physician who needed hotels and restaurants. and mechanics. Six years later, LSC principal. On the other hand, permissible
to stay in the premises of the non- entered into another contract with BMSI, job contracting or subcontracting refers to
hazardous workplace for two (2) hours. 6.) Book Six, Post-employment this time, a service contract. Then, an arrangement whereby a principal
petitioners filed with the Labor Arbiter a agrees to put out or farm out with the
The term "full-time" in Art. 157 a.) Termination of employment complaint for regularization against LSC contractor or subcontractor the
cannot be construed as referring to the (Arts. 278-286) and BMSI. Subsequently, LSC terminated performance or completion of a specific
type of employment of the person the Agreement causing petitioners to loss job, work, or service within a definite or
engaged to provide the services, for Article 1.) Classification of employees their employment. BMSI denied liability as predetermined period, regardless of
157 must not be read alongside Art. 280 in it claimed that it is an independent whether such job, work, or service is to be
order to vest employer-employee i.) Contractor, independent contractor. The Labor Arbiter dismissed performed or completed within or outside
relationship on the employer and the contractor, labor-only contractor the complaint but the NLRC reversed the the premises of the principal.
person so engaged. So De Vera teaches: a.) Arts. 106-109, Labor former. BMSI went to CA via petition for
For, we take it that any agreement may Code certiorari and latter ruled in its favor. A person is considered engaged
provide that one party shall render b.) Department Order Hence, the case reached the SC. in legitimate job contracting or
services for and in behalf of another, no No. 18-A s 2011 (November 14, 2011) subcontracting if the following conditions
matter how necessary for the latter’s c.) Department Order ISSUE: Whether or not BMSI is an concur: (a) The contractor carries on a
business, even without being hired as No. 19 s 1993 independent contractor. distinct and independent business and
an employee. This set-up is precisely true (Guideline undertakes the contract work on his
in the case of an independent Governing the HELD: No. The reliance of the CA to the account under his own responsibility
contractorship as well as in an agency Employment of Agreement is misplaced. The parties according to his own manner and method,
agreement. Indeed, Article 280 of the Workers in the cannot dictate by the mere expedience of free from the control and direction of his
Labor Code, quoted by the appellate court, Construction a unilateral declaration in a contract the employer or principal in all matters
is not the yardstick for determining the Industry) character of their business. The language connected with the performance of his
existence of an employment relationship. of a contract is neither determinative nor work except as to the results thereof; (b)
As it is, the provision merely distinguishes Babas vs. Lorenzo Shipping Corp. conclusive of the relationship between the The contractor has substantial capital or
between two (2) kinds of employees, i.e., (LSC), G.R. No. 186091, December 15, parties. In distinguishing between investment; and (c) The agreement
regular and casual. 2015, Nachura, J. prohibited labor-only contracting and between the principal and the contractor or
permissible job contracting, the totality of subcontractor assures the contractual
The phrase "services of a full- FACTS: LSC entered into a General the facts and the surrounding employees' entitlement to all labor and
time registered nurse" should thus be Equipment Maintenance Repair and circumstances of the case are to be occupational safety and health standards,
taken to refer to the kind of services that Management Services Agreement considered. free exercise of the right to self-
the nurse will render in the company’s (Agreement) with Best Manpower organization, security of tenure, and social
premises and to its employees, not the Services, Inc. (BMSI) wherein the latter Labor-only contracting, a welfare benefits.
manner of his engagement. undertook to provide maintenance and prohibited act, is an arrangement where
repair services to LSC's container vans, the contractor or subcontractor merely In this case, BMSI is engaged in
NOTES: Dr. Pepito is an independent heavy equipment, trailer chassis, and recruits, supplies, or places workers to labor-only contracting. First, petitioners
contractor pursuant to DOLE Dept. Order generator sets. BMSI further undertook to perform a job, work, or service for a worked at LSC's premises, and nowhere
No. 10 s 1997. Shangri-la provides the provide checkers to inspect all containers principal. In labor-only contracting, the else. Second, LSC was unable to present
clinic premises and medical supplies for received for loading to and/or unloading following elements are present: (a) the proof that BMSI had substantial capital.
use of its employees and guests does not from its vessels. Also, LSC leased its contractor or subcontractor does not have Third, petitioners performed activities
necessarily prove that respondent doctor equipment, tools, and tractors to BMSI. substantial capital or investment to which were directly related to the main
lacks substantial capital and investment. The period of lease was coterminous with actually perform the job, work, or service business of LSC. Lastly, as found by the
Besides, the maintenance of a clinic and the Agreement. The BMSI hired under its own account and responsibility; NLRC, BMSI had no other client except for
provision of medical services to its petitioners Babas et al. to work at LSC as and (b) the employees recruited, supplied, LSC, and neither BMSI nor LSC refuted
employees is required under Art. 157, checkers, welders, utility men, clerks, or placed by such contractor or this finding, thereby bolstering the NLRC
finding that BMSI is a labor-only HELD: Yes. Among the circumstances which was affirmed by the NLRC. The CA, employment of such employee and not an
contractor. The CA erred in considering that established the status of FVA as a via petition for certiorari, reversed the independent contractor.
BMSI's Certificate of Registration as legitimate contractor are: (1.) FVA is Labor Arbiter and the NLRC. Hence, the
sufficient proof that it is an independent registered with DOLE and DTI; (2.) FVA case reached the SC. San Miguel Corporation vs. Semillano,
contractor. The fact of registration simply has a Contract of Services with Dusit for G.R. No. 164257, July 5, 2010, Mendoza,
prevents the legal presumption of being a the supply of valet parking and door ISSUE: Whether or not petitioners are J.
mere labor-only contractor from arising. attendants services; (3.) FVA has an regular employees of ABS-CBN.
independent business and provides valet Doctrine. Department of Labor
NOTES: As a consequence of the ruling, parking and door attendant services to HELD: Yes. Notwithstanding the and Employment (DOLE) Department
petitioners were regular employees of other clients like Mandarin Hotel, Western nomenclature of their Talent Contracts Order No. 10, Series of 1997, defines "job
LSC. Hence, they were illegally dismissed Philippine Plaza, etc.; and (4.) FVA’s total and/or Project Assignment Forms and the contracting" and "labor-only contracting"
as the termination of the Agreement is not assets from 1997 to 1999 amount to terms and conditions embodied therein, as follows:
one of those just or authorized causes for P1,502,597.70 to P9,021,335.13. In petitioners are regular employees of ABS-
termination of employment. addition, it provides the uniforms and CBN. In addition to the classification of Sec. 8. Job contracting. – There
lockers of its employees. employees under Art. 280 of the Labor is job contracting permissible under the
Oregas vs. NLRC, 559 SCRA 153, G.R. Code into regular, project, seasonal, and Code if the following conditions are met:
No. 166757, July 21, 2008, Quisumbing, Begino vs. ABS-CBN, G.R. No. 199166, casual, jurisprudence has added that of
J. April 20, 2015, Perez, J. (Possible Bar contractual or fixed term employee which, (1) The contractor carries on an
Problem) if not for the fixed term, would fall under independent business and
FACTS: Rommel C. Oregas et al. worked the category of regular employment in undertakes the contract work on
as valet and parking attendants and door FACTS: ABS-CBN engaged the services view of nature of the employee’s his own account under his own
attendants in Dusit Hotel Nikko (Dusit) as of petitioners Begino et al. as cameramen, engagement, which is to perform activity responsibility according to his
evidenced by employment contracts with editors, and reporters through Talent usually necessary or desirable in the own manner and method, free
FVA Manpower Training (FVA). Then, they Contracts which they regularly renewed employer’s business. Time and again, it from the control and direction of
were recalled by FVA from Dusit. Hence, over the years, provided the terms ranging has been ruled that the test to determine his employer or principal in all
Oregas et al. instituted a complaint for from 3 years to 1 year, wherein they were whether employment is regular or not is matters connected with the
illegal dismissal, regularization, and given Project Assignment Forms which the reasonable connection between the performance of the work except
payment of certain benefits against Dusit detailed, among other matters, the activity performed by the employee in as to the results thereof; and
and FVA. Both Dusit and FVA argued that duration of a particular project as well as relation to the business or trade of the (2) The contractor has substantial
the latter is a legitimate contractor; hence, the budget and the daily technical employer. Petitioners herein were capital or investment in the form
Oregas et al. were employees of the latter. requirements thereof. Petitioners were undoubtedly performing functions of tools, equipment, machineries,
The Labor Arbiter (LA) dismissed the tasked with coverage of news items for necessary and essential to ABS-CBN’s work premises, and other
complaint and held that Oregas et al. were subsequent daily airings in respondent’s business of broadcasting television and materials which are necessary in
employees of FVA. It further ruled that TV Patrol Bicol Program. The Talent radio content. the conduct of his business.
they were not dismissed but merely Contracts provide inter alia the
recalled. The NLRC modified the decision performance of petitioners pursuant to This case shall be distinguished Sec. 9. Labor-only contracting. –
of the LA holding that Oregas et al. were ABS-CBN standards and regulations of with Sonza vs. ABS-CBN which involved a (a) Any person who undertakes to supply
constructively dismissed since more than KBP, non-engagement with the competitor, well-known television and radio personality workers to an employer shall be deemed
6 months have elapsed from the time they results-oriented nature of the work without who was legitimately considered a talent to be engaged in labor-only contracting
were recalled and were not given normal or fixed working hours. Claiming and amply compensated as such. Also, in where such person:
assignments. The CA affirmed the NLRC that they were regular employees of ABS- ABS-CBN vs. Nazareno, it was held that
ruling. Hence, the case reached the SC. CBN, petitioners filed a complaint before the presumption is that when the work (1) Does not have
the NLRC Sub-Regional Arbitration done is an integral part of the regular substantial capital or
ISSUE: Whether or not FVA is a legitimate Branch. ABS-CBN denied the existence of business of the employer and when the investment in the form of
contractor. employer-employee relationship between worker, relative to the employer, does not tools, equipment,
them and the petitioners. The Labor furnish an independent business or machineries, work
Arbiter ruled in favor of the petitioners professional service, such work is regular
 premises and other corporations, tools, equipment,
materials; and implements, machineries and work Furthermore, there are no pieces In connection therewith, DOLE
(2) The workers premises, actually and directly used by the of evidence that AMPCO has substantial Department Order No. 10 also states that
recruited and placed by contractor or subcontractor in the capital or investment. An examination its an independent contractor carries on an
such persons are performance or completion of the job work "Statement of Income and Changes in independent business and undertakes the
performing activities or service contracted out. Undivided Savings" show that its income contract work on his own account, under
which are directly for the year 1994 was P2,777,603.46 while his own responsibility, according to his
related to the principal The "right to control" shall refer to its operating expenses for said year own manner and method, and free from
business or operations the right reserved to the person for whom is P2,718,315.33 or a net income the control and direction of his employer or
of the employer in which the services of the contractual workers are of P59,288.13 for the year 1994; that its principal in all matters connected with the
workers are habitually performed, to determine not only the end cash on hand for 1994 is P22,154.80. performance of the work except as to the
employed. to be achieved, but also the manner and results thereof. This embodies what has
means to be used in reaching that end. In fact, the NLRC in its original long been jurisprudentially recognized as
(b) Labor-only contracting as decision likewise stated as follows: In the control test18 to determine the
defined herein is hereby The test to determine the contrast, the (sic) AMPCO’s main business existence of employer-employee
prohibited and the person acting existence of independent contractorship is activity is trading, maintaining a store relationship.
as contractor shall be considered whether or not the one claiming to be an catering to members and the public. Its job
merely as an agent or independent contractor has contracted to contracting with SMC is only a minor In the case at bench, petitioner
intermediary of the employer who do the work according to his own methods activity or sideline. The component of faults the CA for holding that the
shall be responsible to the and without being subject to the control of AMPCO’s substantial capital are [sic]in respondents were under the control of
workers in the same manner and the employer, except only as to the results fact invested and used in the trading petitioner whenever they performed the
extent as if the latter were directly of the work. business. This is palpably shown in the task of loading in the delivery trucks and
employed by him. sizable amount of its accounts receivables unloading from them. It, however, fails to
The existence of an independent amounting to more than P.6M out of its show how AMPCO took "entire charge,
(c) For cases not falling under and permissible contractor relationship is members’ capital of only P.47M in 1994. control and supervision of the work and
this Article, the Secretary of generally established by the following service agreed upon." AMPCO’s Comment
Labor shall determine through criteria: whether or not the contractor is Neither did petitioner prove that on the Petition is likewise utterly silent on
appropriate orders whether or not carrying on an independent business; the AMPCO had substantial equipment, tools, this point. Notably, both petitioner and
the contracting out of labor is nature and extent of the work; the skill machineries, and supplies actually and AMPCO chose to ignore the uniform
permissible in the light of the required; the term and duration of the directly used by it in the performance or finding of the LA, NLRC (in its original
circumstances of each case and relationship; the right to assign the completion of the segregation and piling decision) and the CA that one of the
after considering the operating performance of a specified piece of work; job. In fact, as correctly pointed out by the assigned jobs of respondents was to
needs of the employer and the the control and supervision of the work to NLRC in its original decision, there is "perform other acts as may be ordered by
rights of the workers involved. In another; the employer's power with nothing in AMPCO’s list of fixed assets, SMC’s officers." Significantly, AMPCO,
such case, he may prescribe respect to the hiring, firing and payment of machineries, tools, and equipment which it opted not to challenge the original decision
conditions and restrictions to the contractor's workers; the control of the could have used, actually and directly, in of the NLRC that found it a mere labor-
insure the protection and welfare premises; the duty to supply the premises, the performance or completion of its only contractor.
of the workers. tools, appliances, materials, and labor; contracted job, work or service with
and the mode, manner and terms of petitioner. For said reason, there can be Moreover, the Court is not
Section 5 of Department Order payment. no other logical conclusion but that the convinced that AMPCO wielded "exclusive
No. 18-02 (Series of 2002) of the Rules tools and equipment utilized by discretion in the discharge" of
Implementing Articles 106 to 109 of the Although there may be respondents are owned by petitioner SMC. respondents. As the CA correctly pointed
Labor Code further provides that: indications of an independent contractor It is likewise noteworthy that neither out, Merlyn Polidario, AMPCO’s project
arrangement between petitioner and petitioner nor AMPCO has shown that the manager, even told respondents to "wait
"Substantial capital or AMPCO, the most determinant of factors latter had clients other than petitioner. for further instructions from the SMC’s
investment" refers to capital stocks and exists which indicate otherwise. Therefore, AMPCO has no independent supervisor" after they were prevented from
subscribed capitalization in the case of business. entering petitioner SMC’s premises. Based
on the foregoing, no other logical which were directly related to petitioner’s which calls to make or not to make and (2016 Bar Examination but the facts are
conclusion can be reached than that it was main line of business. Petitioner is cannot control the referee when he blows twisted)
petitioner, not AMPCO, who wielded power primarily engaged in manufacturing and the whistle because such authority
of control. marketing of beer products, and exclusively belongs to the referees. The Doctrine. As correctly held by
respondents’ work of segregating and very nature of petitioner’s job of officiating the Labor Arbiter and the NLRC, the
Despite the fact that the service cleaning bottles is unarguably an a professional basketball game termination of respondents’ employment
contracts contain stipulations which are important part of its manufacturing and undoubtedly calls for freedom of control by with Zytron was brought about by the
earmarks of independent contractorship, marketing process. respondents. cessation of their contracts with the latter.
they do not make it legally so. The We give credence to the Labor Arbiter’s
language of a contract is neither Lastly, petitioner claims that the Moreover, the following conclusion that respondents were the
determinative nor conclusive of the present case is outside the jurisdiction of circumstances indicate that petitioner is an ones who refused to renew their contracts
relationship between the parties. Petitioner the labor tribunals because respondent independent contractor: (1) the referees with Zytron, and the NLRC’s finding that
SMC and AMPCO cannot dictate, by a Vicente Semillano is a member of are required to report for work only when they themselves acquiesced to their
declaration in a contract, the character of AMPCO, not SMC. Precisely, he has PBA games are scheduled, which is three transfer to A.C. Sicat.
AMPCO’s business, that is, whether as joined the others in filing this complaint times a week spread over an average of
labor-only contractor, or job contractor. because it is his position that petitioner only 105 playing days a year, and they By refusing to renew their
AMPCO’s character should be measured SMC is his true employer and liable for all officiate games at an average of two hours contracts with Zytron, respondents
in terms of, and determined by, the criteria his claims under the Labor Code. per game; and (2) the only deductions effectively resigned from the latter.
set by statute. At a closer look, AMPCO’s from the fees received by the referees are Resignation is the voluntary act of
actual status and participation regarding Thus, petitioner SMC, as withholding taxes. employees who are compelled by personal
respondents’ employment clearly belie the principal employer, is solidarily liable with reasons to dissociate themselves from
contents of the written service contract. AMPCO, the labor-only contractor, for all In other words, unlike regular their employment, done with the intention
the rightful claims of respondents. Under employees who ordinarily report for work of relinquishing an office, accompanied by
Petitioner cannot rely either on this set-up, AMPCO, as the "labor-only" eight hours per day for five days a week, the act of abandonment.
AMPCO’s Certificate of Registration as an contractor, is deemed an agent of the petitioner is required to report for work
Independent Contractor issued by the principal (SMC). The law makes the only when PBA games are scheduled or Here, it is obvious that
proper Regional Office of the DOLE to principal responsible over the employees three times a week at two hours per game. respondents were no longer interested in
prove its claim. It is not conclusive of the "labor-only" contractor as if the In addition, there are no deductions for continuing their employment with Zytron.
evidence of such status. The fact of principal itself directly hired the employees contributions to the Social Security Their voluntary refusal to renew their
registration simply prevents the legal System, Philhealth or Pag-Ibig, which are contracts was brought about by their
presumption of being a mere labor-only Bernarte vs. PBA, G.R. No. 192084, the usual deductions from employees’ desire to continue their assignment in
contractor from arising. In distinguishing September 14, 2011, Carpio, J. salaries. These undisputed circumstances Fonterra which could not happen in view
between permissible job contracting and (Possible Bar Problem) buttress the fact that petitioner is an of the conclusion of Zytron’s contract with
prohibited labor-only contracting, the independent contractor, and not an Fonterra. Hence, to be able to continue
totality of the facts and the surrounding Doctrine. We agree with employee of respondents. with their assignment, they applied for
circumstances of the case are to be respondents that once in the playing court, work with A.C. Sicat with the hope that
considered. the referees exercise their own Furthermore, the applicable they will be able to continue rendering
independent judgment, based on the rules foreign case law declares that a referee is services as TMRs at Fonterra since A.C.
Petitioner also argues that among of the game, as to when and how a call or an independent contractor, whose special Sicat is Fonterra’s new manpower
the permissible contracting arrangements decision is to be made. The referees skills and independent judgment are supplier. This fact is even acknowledged
include "work or services not directly decide whether an infraction was required specifically for such position and by the CA in the assailed Decision where it
related or not integral to the main business committed, and the PBA cannot overrule cannot possibly be controlled by the hiring recognized the reason why respondents
or operation of the principal including… them once the decision is made on the party. applied for work at A.C. Sicat. The CA
work related to manufacturing processes playing court. The referees are the only, stated that "[t]o continuously work as
of manufacturing establishments." The absolute, and final authority on the playing Fonterra Brands vs. Largado, G.R. No. merchandisers of Fonterra products,
Court is not persuaded. The evidence is court. Respondents or any of the PBA 205300, March 18, 2015, Velasco, Jr., J. [respondents] submitted their job
clear that respondents performed activities officers cannot and do not determine applications to A.C. Sicat x x x." This is
further bolstered by the fact that subcontracting if the following conditions 2.The contractor does not them, does not establish that Fonterra
respondents voluntarily complied with the concur: exercise the right to control over exercises control over A.C. Sicat. We
requirements for them to claim their the performance of the work of agree with the CA’s conclusion that these
corresponding monetary benefits in 1.The contractor or subcontractor the contractual employee. were imposed only to ensure the
relation to the cessation of their carries on a distinct and effectiveness of the promotion services to
employment contract with Zytron. independent business and The CA correctly found that A.C. be rendered by the merchandisers as it
undertakes to perform the job, Sicat is engaged in legitimate job would be risky, if not imprudent, for any
In short, respondents voluntarily work or service on its own contracting. It duly noted that A.C. Sicat company to completely entrust the
terminated their employment with Zytron account and under its own was able to prove its status as a legitimate performance of the operations it has
by refusing to renew their employment responsibility according to its own job contractor for having presented the contracted out.
contracts with the latter, applying with A.C. manner and method, and free following evidence, to wit:
Sicat, and working as the latter’s from the control and direction of These sufficiently show that A.C.
employees, thereby abandoning their the principal in all matters 1.Certificate of Business Sicat carries out its merchandising and
previous employment with Zytron. Too, it is connected with the performance Registration; promotions business, independent of
well to mention that for obvious reasons, of the work except as to the 2.Certificate of Registration with Fonterra’s business. Thus, having settled
resignation is inconsistent with illegal results thereof; the Bureau of Internal Revenue; that A.C. Sicat is a legitimate job
dismissal. This being the case, Zytron 2.The contractor or subcontractor 3.Mayor’s Permit; contractor, We now determine whether the
cannot be said to have illegally dismissed has substantial capital or 4.Certificate of Membership with termination of respondents’ employment
respondents, contrary to the findings of the investment; and the Social Security System; with the former is valid.
CA. 3.The agreement between the 5.Certificate of Registration with
principal and contractor or the Department of Labor and We agree with the findings of the
As regards respondents’ subcontractor assures the Employment; CA that the termination of respondents’
employment with A.C. Sicat and its contractual employees 6.Company Profile; and employment with the latter was simply
termination via non-renewal of their entitlement to all labor and 7.Certifications issued by its brought about by the expiration of their
contracts, considering that in labor-only occupational safety and health clients. employment contracts.
contracting, the law creates an employer- standards, free exercise of the
employee relationship between the right to self-organization, security Furthermore, A.C. Sicat has Foremost, respondents were
principal and the labor-only contractor’s of tenure, and social and welfare substantial capital, having assets totaling fixed-term employees. As previously held
employee as if such employees are benefits. 5,926,155.76 (in the 2016 Bar Problem, by this Court, fixed-term employment
directly employed by the principal the assets is only 1,000,000) as of contracts are not limited, as they are under
employer, and considers the contractor as On the other hand, contracting is December 31, 2006. Too, its Agreement the present Labor Code, to those by
merely the agent of the principal, it is prohibited when the contractor or with Fonterra clearly sets forth that A.C. nature seasonal or for specific
proper to dispose of the issue on A.C. subcontractor merely recruits, supplies or Sicat shall be liable for the wages and projects with predetermined dates of
Sicat’s status as a job contractor first places workers to perform a job, work or salaries of its employees or workers, completion; they also include those to
before resolving the issue on the legality of service for a principal and if any of the including benefits, premiums, and which the parties by free choice have
the cessation of respondents’ employment. following elements are present, thus: protection due them, as well as remittance assigned a specific date of
to the proper government entities of all termination. The determining factor of
In this regard, We defer to the 1.The contractor or subcontractor withholding taxes, Social Security Service, such contracts is not the duty of the
findings of the CA anent A.C. Sicat’s status does not have substantial capital and Medicare premiums, in accordance employee but the day certain agreed upon
as a legitimate job contractor, seeing that it or investment which relates to the with relevant laws. by the parties for the commencement and
is consistent with the rules on job job, work or service to be termination of the employment
contracting and is sufficiently supported by performed and the employees The appellate court further relationship.
the evidence on record. recruited, supplied or placed by correctly held that Fonterra’s issuance of
such contractor or subcontractor Merchandising Guidelines, stock In the case at bar, it is clear that
A person is considered engaged are performing activities which monitoring and inventory forms, and respondents were employed by A.C. Sicat
in legitimate job contracting or are directly related to the main promo mechanics, for compliance and use as project employees. In their employment
business of the principal; or of A.C. Sicat’s employees assigned to contract with the latter, it is clearly stated
that "[A.C. Sicat is] temporarily employing June 30, 2003. For this purpose, Omni that is within the regular or usual business conclusion is that respondents were not
[respondents] as TMR[s] effective June 6[, hired Bon et al. as garbage truck drivers of the employer company, but which is clearly and knowingly informed of their
2006] under the following terms and and paleros who were then paid on a per distinct and separate, and identifiable as employment status as mere project
conditions: The need for your service trip basis. such, from the other undertakings of the employees, with the duration and scope of
being only for a specific project, your company; or (2) a particular job or the project specified at the time they were
temporary employment will be for the ISSUE: Are Bon et al. project employees? undertaking that is not within the regular engaged. As such, the presumption of
duration only of said project of our client, business of the corporation. In order to regular employment should be accorded in
namely to promote FONTERRA BRANDS HELD: No. Art. 280. Regular and casual safeguard the rights of workers against the their favor pursuant to Article 280 of the
products x x x which is expected to be employment. The provisions of written arbitrary use of the word "project" to Labor Code which provides that
finished on or before Nov. 06, 2006." agreement to the contrary notwithstanding prevent employees from attaining a "[employees] who have rendered at least
Respondents, by accepting the and regardless of the oral agreement of regular status, employers claiming that one year of service, whether such service
conditions of the contract with A.C. Sicat, the parties, an employment shall be their workers are project employees is continuous or broken [– as respondents
were well aware of and even acceded to deemed to be regular where the employee should not only prove that the duration and in this case –] shall be considered as
the condition that their employment thereat has been engaged to perform activities scope of the employment was specified at [regular employees]with respect to the
will end on said pre-determined date of which are usually necessary or desirable the time they were engaged, but also that activity in which [they] are employed and
termination. They cannot now argue that in the usual business or trade of the there was indeed a project. [their] employment shall continue while
they were illegally dismissed by the latter employer, except where the employment such activity actually exists." Add to this
when it refused to renew their contracts has been fixed for a specific project or Even though the absence of a the obvious fact that respondents have
after its expiration. This is so since the undertaking the completion or termination written contract does not by itself grant been engaged to perform activities which
non-renewal of their contracts by A.C. of which has been determined at the time regular status to respondents, such a are usually necessary or desirable in the
Sicat is a management prerogative, and of the engagement of the employee or contract is evidence that respondents usual business or trade of Omni, i.e.,
failure of respondents to prove that such where the work or service to be performed were informed of the duration and scope garbage hauling, thereby confirming the
was done in bad faith militates against is seasonal in nature and the employment of their work and their status as project strength of the aforesaid conclusion.
their contention that they were illegally is for the duration of the season. employees. As held in Hanjin Heavy
dismissed. The expiration of their contract xxxx Industries and Construction Co., Ltd. v. Hacienda Leddy vs. Villegas, G.R.
with A.C. Sicat simply caused the natural Ibañez, citing numerous precedents on the 179654, September 22, 2014, Peralta, J.
cessation of their fixed-term employment A project employee is assigned to matter, where no other evidence was
thereat. We, thus, see no reason to disturb a project which begins and ends at offered, the absence of the employment Doctrine. In the instant case, if
the ruling of the CA in this respect determined or determinable times. Unlike contracts raises a serious question of we are to follow the length of time that
regular employees who may only be whether the employees were properly Villegas had worked with the Gamboas, it
ii. dismissed for just and/or authorized informed of their employment status as should be more than 20 years of service.
Regular employee, project/seasonal causes under the Labor Code, the project employees at the time of their Even Gamboa admitted that by act of
employee, services of employees who are hired as engagement. generosity and compassion, Villegas was
"project employees" may be lawfully given a privilege of erecting his house
probationary, casual (Arts. 280-281, terminated at the completion of the project. In this case, records are bereft of inside the hacienda during his
Labor Code) any evidence to show that respondents employment. While it may indeed be an
According to jurisprudence, the were made to sign employment contracts act of good will on the part of the
Omni Hauling vs. Bon, G.R. No. 199388, principal test for determining whether explicitly stating that they were going to be Gamboas, still, such act is usually done by
September 3, 2014, Perlas-Bernabe, J. particular employees are properly hired as project employees, with the the employer either out of gratitude for the
characterized as "project employees" as period of their employment to be co- employee’s service or for the employer's
FACTS: Omni Hauling Services, Inc. distinguished from "regular employees,"is terminus with the original period of Omni’s convenience as the nature of the work
(Omni), a company owned by petitioners whether or not the employees were service contract with the Quezon City calls for it. Indeed, petitioner's length of
Lolita and Aniceto Franco (petitioners), assigned to carry out a "specific project or government. Neither is petitioners’ service is an indication of the regularity of
was awarded a one (1) year service undertaking," the duration (and scope) of allegation that respondents were duly his employment. Even assuming that he
contract by the local government of which were specified at the time they were apprised of the project-based nature of was doing odd jobs around the farm, such
Quezon City to provide garbage hauling engaged for that project. The project could their employment supported by any other long period of doing said odd jobs is
services for the period July 1, 2002 to either be (1) a particular job or undertaking evidentiary proof. Thus, the logical indicative that the same was either
necessary or desirable to petitioner's trade in the hacienda? More significantly, declarations in the affidavit of his length of time of its performance and its
or business. Owing to the length of service petitioner admitted that Villegas had employee, petitioner did not adduce proof continued existence.
alone, he became a regular employee, by worked in the hacienda until his father's of overt acts of Villegas showing his
operation of law, one year after he was demise. Clearly, even assuming that intention to abandon his work. FVR Skills and Services vs. Seva, G.R.
employed. Villegas' employment was only for a Abandonment is a matter of intention; it No. 200857, October 22, 2014, Brion, J.
specific duration, the fact that he was cannot be inferred or presumed from
Article 280 of the Labor Code, repeatedly re-hired over a long period of equivocal acts. On the contrary, the filing FACTS: The twenty-eight (28)
describes a regular employee as one who time shows that his job is necessary and of the instant illegal dismissal complaint respondents in this case were employees
is either (1) engaged to perform activities indispensable to the usual business or negates any intention on his part to sever of petitioner FVR Skills and Services
which are necessary or desirable in the trade of the employer. their employment relationship. The delay Exponents, Inc., an independent
usual business or trade of the employer; of more than 1 year in filing the instant contractor engaged in the business of
and (2) those casual employees who have Gamboa likewise argued that illegal dismissal case likewise is non-issue providing janitorial and other manpower
rendered at least one year of service, Villegas was paid on a piece-rate considering that the complaint was filed services to its clients.
whether continuous or broken, with basis. However, payment on a piece-rate within a reasonable period during the
respect to the activity in which he is basis does not negate regular three-year period provided under Article ISSUE: Are the respondents regular
employed. employment. "The term ‘wage’ is broadly 291 of the Labor Code. As aptly observed employees?
defined in Article 97 of the Labor Code as by the appellate court, Villegas appeared
In Integrated Contractor and remuneration or earnings, capable of to be without educational attainment. He Doctrine. Under Art. 280, there are two
Plumbing Works, Inc. v. National Labor being expressed in terms of money could not have known that he has rights as kinds of regular employees, namely: (1)
Relations Commission, we held that the whether fixed or ascertained on a time, a regular employee that is protected by those who were engaged to perform
test to determine whether employment is task, piece or commission basis. Payment law. activities which are usually necessary or
regular or not is the reasonable connection by the piece is just a method of desirable in the usual business or trade of
between the particular activity performed compensation and does not define the The Labor Code draws a fine line the employer; and (2) those casual
by the employee in relation to the usual essence of the relations." between regular and casual employees to employees who became regular after one
business or trade of the employer. If the protect the interests of labor. We ruled in year of service, whether continuous or
employee has been performing the job for We are likewise unconvinced that Baguio Country Club Corporation v. broken, but only with respect to the activity
at least one year, even if the performance it was Villegas who suddenly stopped NLRC that "its language evidently for which they have been hired.
is not continuous or merely intermittent, working. Considering that he was manifests the intent to safeguard the
the law deems the repeated and employed with the Gamboas for more than tenurial interest of the worker who may be We distinguish these two types of
continuing need for its performance as 20 years and was even given a place to denied the rights and benefits due a regular employees from a project
sufficient evidence of the necessity, if not call his home, it does not make sense why regular employee by virtue of lopsided employee, or one whose employment was
indispensability of that activity to the Villegas would suddenly stop working agreements with the economically fixed for a specific project or undertaking,
business. Clearly, with more than 20 years therein for no apparent reason. To justify a powerful employer who can maneuver to whose completion or termination had been
of service, Villegas, without doubt, passed finding of abandonment of work, there keep an employee on a casual status for determined at the time of engagement.
this test to attain employment regularity. must be proof of a deliberate and as long as convenient." Thus, A careful look at the factual
unjustified refusal on the part of an notwithstanding any agreements to the circumstances of this case leads us to the
While length of time may not be employee to resume his employment. The contrary, what determines whether a legal conclusion that the respondents are
the controlling test to determine if Villegas burden of proof is on the employer to show certain employment is regular or casual is regular and not project employees.
is indeed a regular employee, it is vital in an unequivocal intent on the part of the not the will and word of the employer, to
establishing if he was hired to perform employee to discontinue employment. which the desperate worker often The primary standard in
tasks which are necessary and Mere absence is not sufficient. It must be accedes, much less the procedure of determining regular employment is the
indispensable to the usual business or accompanied by manifest acts unerringly hiring the employee or the manner of reasonable connection between the
trade of the employer. If it was true that pointing to the fact that the employee paying his salary. It is the nature of the particular activity performed by the
Villegas worked in the hacienda only in the simply does not want to work anymore. activities performed in relation to the employee and the employer's business or
year 1993, specifically February 9, 1993 particular business or trades considering trade. This connection can be ascertained
and February 11, 1993, why would then he Petitioner failed to discharge this all circumstances, and in some cases the by considering the nature of the work
be given the benefit to construct his house burden. Other than the self-serving performed and its relation to the scheme
of the particular business, or the trade in concerted action; and (e) security of the time of the engagement of the functions over several years. Ultimately,
its entirety. tenure. employee. The repeated rehiring was only without a doubt, the functions they
a natural consequence of the experience performed were indeed vital and
Guided by this test, we conclude Manalo vs. TNS Philippines, G.R. No. gained from past service rendered in other necessary to the very business or trade of
that the respondents' work as janitors, 208567, November 26, 2014, Mendoza, projects. TNS.
service crews and sanitation aides, are J.
necessary or desirable to the petitioner's In Maraguinot, Jr. vs. NLRC, the Granting arguendo that
business of providing janitorial and FACTS: Jeanette V. Manalo, Vilma P. Court held that once a project or work pool petitioners were rehired intermittently, a
manpower services to its clients as an Barrios, Lourdes Lynn Michelle employee has been: (1) continuously, as careful review of the project employment
independent contractor. Fernandez, and Leila B. Taiño were hired opposed to intermittently, rehired by the contracts of petitioners reveals some other
by TNS as field personnel on various same employer for the same tasks or vague provisions. Oddly, one of the terms
Also, the respondents had dates starting 1996 for several projects. nature of tasks; and (2) these tasks are and conditions in the said contract stated
already been working for the petitioner as They were made to sign a project-to- vital, necessary and indispensable to the that:
early as 1998. Even before the service project employment contract. Thereafter, usual business or trade of the employer,
contract with Robinsons, the respondents TNS would file the corresponding then the employee must be deemed a 1. The need for your services
were already under the petitioner's termination report with the Department of regular employee. Although it is true that being determinable and for a
employ. They had been doing the same Labor and Employment Regional Office the length of time of the employee’s specific project starting
type of work and occupying the same (DOLE-RO). service is not a controlling determinant of ____________ your employment
positions from the time they were hired project employment, it is vital in will be for the duration of said
and until they were dismissed in January ISSUE: Are Manalo et al. project determining whether he was hired for a project of the Company, namely
2009.The petitioner did not present any employees? specific undertaking or in fact tasked to Project ___________ which is
evidence to refute the respondents' claim perform functions vital, necessary and expected to be finished on
that from the time of their hiring until the HELD: No. Article 280 of the Labor Code, indispensable to the usual business or _____________. The Company
time of their dismissal, there was no gap in as amended, clearly defined a project trade of the employer. shall have the option of renewing
between the projects where they were employee as one whose employment has or extending the period of this
assigned to. The petitioner continuously been fixed for a specific project or Petitioners’ successive re- agreement for such time as it
availed of their services by constantly undertaking the completion or termination engagement in order to perform the same may be necessary to complete
deploying them to its clients. of which has been determined at the time kind of work firmly manifested the the project or because we need
of the engagement of the employee or necessity and desirability of their work in further time to determine your
Lastly, under Department Order where the work or service to be performed the usual business of TNS as a market competence on the job.
(DO) 18-02, the applicable labor issuance is seasonal in nature and the employment research facility. Undisputed also is the
to the petitioner's case, the contractor or is for the duration of the season. fact that the petitioners were assigned To the Court, the phrase
subcontractor is considered as the Additionally, a project employee is one office-based tasks from 9:00 o’clock in the "because we need further time to
employer of the contractual employee for whose termination of his employment morning up to 6:00 o’clock in the evening, determine your competence on the job"
purposes of enforcing the provisions of the contract is reported to the DOLE everytime at the earliest, without any corresponding would refer to a probationary employment.
Labor Code and other social legislation. the project for which he was engaged has remuneration. Such phrase changes the tenor of the
been completed. contract and runs counter to the very
DO 18-02 grants contractual The project employment scheme nature of a project employment. TNS can,
employees all the rights and privileges due TNS contended that the repeated used by TNS easily circumvented the law therefore, extend the contract which was
a regular employee, including the and successive rehiring of project and precluded its employees from already fixed when it deemed it necessary
following: (a) safe and healthful working employees does not qualify petitioners as attaining regular employment status in the to determine whether or not the employee
conditions;(b) labor standards such as regular employees, as length of service is subtlest way possible. Petitioners were was qualified and fit for the job. Corollarily,
service incentive leave, rest days, not the controlling determinant of the rehired not intermittently, but continuously, TNS can likewise pre-terminate the
overtime pay, holiday pay, 13th month pay employment tenure of a project employee, contract after contract, month after month, contract not because the specific project
and separation pay; (c) social security and but whether the employment has been involving the very same tasks. They was completed ahead of time, but
welfare benefits; (d) self-organization, fixed for a specific project or undertaking practically performed exactly the same because of failure to qualify for the job.
collective bargaining and peaceful and its completion has been determined at
Consistently, the terms and conditions of Basan vs. Coca-Cola Bottlers, G.R. contract of employment is impressed with definite period, the termination of which
the contract, reads: Nos. 174365-66, February 4, 2015, public interest. The provisions of occurs upon the expiration of said period
Peralta, J. applicable statutes are deemed written irrespective of the existence of just cause
4. It is expressly agreed and into the contract, and "the parties are not and regardless of the activity the
understood that the Company FACTS: Romeo Basan, Danilo Dizon, at liberty to insulate themselves and their employee is called upon to perform.
may terminate your employment Jaime L. Tumabiao, Jr., Roberto Dela relationships from the impact of labor laws Considering, however, the possibility of
after compliance with procedural Rama,Jr., Ricky S. Nicolas, Crispulo D. and regulations by simply contracting with abuse by employers in the utilization of
requirements of law, without Donor, Galo Falguera were hired as route each other." fixed-term employment contracts, this
benefit of termination pay and helpers of Coca-Cola Bottlers Philippines. Court, in Brent, laid down the following
without any obligation on the part An employment shall be deemed criteria to prevent the circumvention of the
of the Company, in the event of ISSUE: Are Basan et al. regular to be casual if it is not covered under Art. employee’s security of tenure:
any breach of any conditions employees? 280: Provided, That, any employee who
hereof: a) If the project is has rendered at least one year of service, 1) The fixed period of
completed or cancelled before HELD: Yes. The repeated rehiring of whether such service is continuous or employment was knowingly and
the expected date of completion respondent workers and the continuing broken, shall be considered a regular voluntarily agreed upon by the
as specified in paragraph 1 need for their services clearly attest to the employee with respect to the activity in parties without any force, duress,
hereof; necessity or desirability of their services in which he is employed and his employment or improper pressure being
the regular conduct of the business or shall continue while such activity exists. brought to bear upon the
b) If we should find that you are not trade of petitioner company. The Court of Thus, pursuant to Art. 280, there are two employee and absent any other
qualified, competent or efficient in the Appeals has found each of respondents to kinds of regular employees, namely: (1) circumstances vitiating his
above-stated positions for which you are have worked for at least one year with those who are engaged to perform consent; or
hired in accordance with the company petitioner company. While this Court, in activities which are usually necessary or
standards made known to you at the start Brent School, Inc. vs. Zamora, has upheld desirable in the usual business or trade of 2) It satisfactorily appears that
of your employment; the legality of a fixed-term employment, it the employer; and (2) those who have the employer and the employee
xxx has done so, however, with a stern rendered at least one year of service, dealt with each other on more or
For said reason, at the outset, the admonition that where from the whether continuous or broken, with less equal terms with no moral
supposed project employment contract circumstances it is apparent that the respect to the activities in which they are dominance exercised by the
was highly doubtful. In determining the period has been imposed to preclude the employed. Simply stated, regular former or the latter. Unfortunately,
true nature of an employment, the entirety acquisition of tenurial security by the employees are classified into: (1) regular however, the records of this case
of the contract, not merely its designation employee, then it should be struck down employees by nature of work; and (2) is bereft of any proof which will
or by which it was denominated, is as being contrary to law, morals, good regular employees by years of service. show that petitioners freely
controlling. Though there is a rule that customs, public order and public policy. The former refers to those employees who entered into agreements with
conflicting provisions in a contract should The pernicious practice of having perform a particular activity which is respondent to perform services
be harmonized to give effect to all, in this employees, workers and laborers, necessary or desirable in the usual for a specified length of time. In
case, however, harmonization is engaged for a fixed period of few months, business or trade of the employer, fact, there is nothing in the
impossible because project employment short of the normal six-month probationary regardless of their length of service; while records to show that there was
and probationary employment are distinct period of employment, and, thereafter, to the latter refers to those employees who any agreement at all, the
from one another and cannot co-exist with be hired on a day-to-day basis, mocks the have been performing the job, regardless contracts of employment not
each other. Hence, should there be law. Any obvious circumvention of the law of the nature thereof, for at least a year. having been presented. While
ambiguity in the provisions of the contract, cannot be countenanced. The fact that respondent company persistently
the rule is that all doubts, uncertainties, respondent workers have agreed to be Thus, under the above Brent asserted that petitioners
ambiguities and insufficiencies should be employed on such basis and to forego the doctrine, while it was not expressly knowingly agreed upon a fixed
resolved in favor of labor. This is in protection given to them on their security mentioned in the Labor Code, this Court period of employment and
consonance with the constitutional policy of tenure, demonstrate nothing more than has recognized a fixed-term type of repeatedly made reference to
of providing full protection to labor. the serious problem of impoverishment of employment embodied in a contract their contracts of employment,
so many of our people and the resulting specifying that the services of the the expiration thereof being made
unevenness between labor and capital. A employee shall be engaged only for a known to petitioners at the time of
 their engagement, respondent been determined at the time of their employee in relation to the usual business needed. Respondent, therefore, as a farm
failed to present the same in spite engagement, or those whose work or or trade of the employer. The test is worker is only a seasonal employee. Since
of all the opportunities to do so. service is seasonal in nature and is whether the former is usually necessary or petitioners provided that the cultivation of
Notably, it was only at the stage performed for the duration of the season; desirable in the usual business or trade of sugarcane is only for six months,
of its appeal to the CA that and (3) casual employees or those who the employer. The connection can be respondent cannot be considered as
respondent provided an are neither regular nor project employees. determined by considering the nature of regular employee during the months when
explanation as to why it failed to the work performed and its relation to the there is no cultivation.
submit the contracts they Farm workers generally fall under scheme of the particular business or trade
repeatedly spoke of. Even the definition of seasonal employees. It in its entirety. Also, if the employee has Paz vs. Northern Tobacco Redrying,
granting that the contracts of was also consistently held that seasonal been performing the job for at least one G.R. No. 199554, February 18, 2015,
employment were destroyed by employees may be considered as regular year, even if the performance is not Leonen, J.
fire, respondent could have easily employees when they are called to work continuous or merely intermittent, the law
submitted other pertinent files, from time to time. They are in regular deems the repeated and continuing need Doctrine. Article 280 of the
records, remittances, and other employment because of the nature of the for its performance as sufficient evidence Labor Code and jurisprudence identified
similar documents which would job, and not because of the length of time of the necessity if not indispensability of three types of employees, namely: "(1)
show the fixed period of they have worked. However, seasonal that activity to the business. Hence, the regular employees or those who have
employment voluntarily agreed workers who have worked for one season employment is also considered regular, been engaged to perform activities which
upon by the parties. They did not, only may not be considered regular but only with respect to such activity and are usually necessary or desirable in the
however, aid this Court with any employees. while such activity exists. usual business or trade of the employer;
kind of proof which might tend to (2) project employees or those whose
show that petitioners were truly The nature of the services A reading of the records would employment has been fixed for a specific
engaged for specified periods, performed and not the duration thereof, is reveal that petitioners failed to dispute the project or undertaking, the completion or
seemingly content with the determinative of coverage under the law. allegation that the respondent performed termination of which has been determined
convenient excuse that the To be exempted on the basis of casual hacienda work, such as planting at the time of the engagement of the
contracts were destroyed by fire. employment, the services must not merely sugarcane point, fertilizing, weeding, employee or where the work or service to
Indeed, respondent’s failure to be irregular, temporary or intermittent, but replanting dead sugarcane fields and be performed is seasonal in nature and
submit the necessary documents, the same must not also be in connection routine miscellaneous hacienda the employment is for the duration of the
which as employers are in their with the business or occupation of the work. They merely alleged that respondent season; and (3) casual employees or
possession, gives rise to the employer. Thus, it is erroneous for the was a very casual worker because she those who are neither regular nor project
presumption that their petitioners to conclude that the respondent only rendered work for 16 months. Thus, employees."
presentation is prejudicial to its was a very casual worker simply because respondent is considered a regular
cause. the SSS form revealed that she had 16 seasonal worker and not a casual worker This court explained that the
months of contributions. It does not, in any as the petitioners alleged. proviso in the second paragraph of Article
Hacienda Cataywa vs. Lorezo, G.R. No. way, prove that the respondent performed 280 in that "any employee who has
179640, March 18, 2015, Peralta, J. a job which is not in connection with the Petitioners also assert that the rendered at least one year of service,
business or occupation of the employer to sugarcane cultivation covers only a period whether such service is continuous or
Doctrine. Jurisprudence has be considered as casual employee. of six months, thus, disproving the broken, shall be considered a regular
identified the three types of employees allegation of the respondent that she employee" applies only to "casual"
mentioned in the provision of the Labor The test for regular employees to worked for 11 months a year for 25 years. employees and not "project" and regular
Code: (1) regular employees or those who be considered as such has been This Court has classified farm workers as employees in the first paragraph of Article
have been engaged to perform activities thoroughly explained in De Leon v. NLRC, regular seasonal employees who are 280.
that are usually necessary or desirable in viz.: called to work from time to time and the
the usual business or trade of the nature of their relationship with the The primary standard, therefore,
employer; (2) project employees or those The primary standard, therefore, employer is such that during the off of determining regular employment is the
whose employment has been fixed for a of determining a regular employment is the season, they are temporarily laid off; but reasonable connection between the
specific project or undertaking, the reasonable connection between the reemployed during the summer season or particular activity performed by the
completion or termination of which has particular activity performed by the when their services may be employee in relation to the usual trade or
business of the employer. The test is HELD: No. It is well to remind both provisions in a contract are valid only if "project-based and as such is co-terminus
whether the former is usually necessary or parties that, as early as Brent School, Inc. they are not contrary to law, morals, good to the project." In this light, the CA
desirable in the usual business or trade of v. Zamora, we already held that seafarers customs, public order or public policy. correctly ruled that petitioners were indeed
the employer. The connection can be are not covered by the term regular project-based employees, considering
determined by considering the nature of employment, as defined under Article 280 In Millares v. NLRC, this Court that: (a) they were hired to carry out a
the work performed and its relation to the of the Labor Code. This was reiterated had occasion to rule on the use of the specific undertaking, i.e., the Alltel Project;
scheme of the particular business or trade in Coyoca v. National Labor Relations terms "permanent and probationary and (b) the duration and scope of such
in its entirety. Also if the employee has Commission. Instead, they are considered masters and employees" vis-à-vis project were made known to them at the
been performing the job for at least a year, contractual employees whose rights and contracts of enlistment of seafarers. In that time of their engagement, i.e., "co-
even if the performance is not continuous obligations are governed primarily by the case, petitioners made much of the fact terminus with the project."
and merely intermittent, the law deems POEA Standard Employment Contract for that they were continually re-hired for 20
repeated and continuing need for its Filipino Seamen (POEA Standard years by private respondent Esso As regards the second requisite,
performance as sufficient evidence of the Employment Contract), the Rules and International. By such circumstances, they the CA correctly stressed that "[t]he law
necessity if not indispensability of that Regulations Governing Overseas claimed to have acquired regular status and jurisprudence dictate that ‘the duration
activity to the business. Hence, the Employment, and, more importantly, by with all the rights and benefits appurtenant of the undertaking begins and ends at
employment is considered regular, but Republic Act No. 8042, otherwise known thereto. The Court quoted with favor the determined or determinable times’" while
only with respect to such activity, and while as The Migrant Workers and Overseas NLRC's explanation that the reference to clarifying that "[t]he phrase ‘determinable
such activity exists. Filipinos Act of 1995. Even the POEA permanent and probationary masters and times’ simply means capable of being
Standard Employment Contract itself employees was a misnomer. It did not determined or fixed." In this case, Sykes
Thus, the nature of one’s mandates that in no case shall a contract change the fact that the contract for Asia substantially complied with this
employment does not depend solely on of employment concerning seamen employment was for a definite period of requisite when it expressly indicated in
the will or word of the employer. Nor on exceed 12 months. time. In using the terms "probationary" petitioners’ employment contracts that
the procedure for hiring and the manner of and "permanent" vis-à-vis seafarers, their positions were "co-terminus with the
designating the employee, but on the It is an accepted maritime what was really meant was "eligible for project." To the mind of the Court, this
nature of the activities to be performed by industry practice that the employment of re-hire." caveat sufficiently apprised petitioners that
the employee, considering the employer's seafarers is for a fixed period only. The their security of tenure with Sykes Asia
nature of business and the duration and Court acknowledges this to be for the Gadia vs. Sykes Asia, G.R. No. 209499, would only last as long as the Alltel Project
scope of work to be done. mutual interest of both the seafarer and January 28, 2015, Perlas-Bernabe, J. was subsisting. In other words, when the
the employer. Seafarers cannot stay for a Alltel Project was terminated, petitioners
The services petitioner Paz long and indefinite period of time at sea as Doctrine. Verily, for an employee no longer had any project to work on, and
performed as a sorter were necessary and limited access to shore activity during their to be considered project-based, the hence, Sykes Asia may validly terminate
indispensable to respondent NTRCI’s employment has been shown to adversely employer must show compliance with two them from employment. Further, the Court
business of flue-curing and redrying affect them. Furthermore, the diversity in (2) requisites, namely that: (a) the likewise notes the fact that Sykes Asia
tobacco leaves. She was also regularly nationality, culture and language among employee was assigned to carry out a duly submitted an Establishment
rehired as a sorter during the tobacco the crew necessitates the limitation of the specific project or undertaking; and (b) the Employment Report and an Establishment
seasons for 29 years since 1974. These period of employment. duration and scope of which were Termination Report to the Department of
considerations taken together allowed the specified at the time they were engaged Labor and Employment Makati-Pasay
conclusion that petitioner Paz was a While we recognize that for such project. Field Office regarding the cessation of the
regular seasonal employee. petitioner was a registered member of the Alltel Project and the list of employees that
Associated Marine Officers and Seamen's In this case, records reveal that would be affected by such cessation. As
Dela Cruz vs. Maersk Filipinas Crewing, Union of the Philippines which had a CBA Sykes Asia adequately informed correctly pointed out by the CA, case law
Inc., G.R. No. 172038, April 14, 2008, with respondent Elite Shipping A.S. petitioners of their employment status at deems such submission as an indication
Corona, J. providing for a probationary period of the time of their engagement, as that the employment was indeed project-
employment, the CBA cannot override the evidenced by the latter’s employment based.
ISSUE: Are seafarers entitled to regular provisions of the POEA Standard contracts which similarly provide that they
employment? Employment Contract. The law is read were hired in connection with the Alltel Aro vs. NLRC, G.R. No. 174792, March
into, and forms part of, contracts. And Project, and that their positions were 7, 2012, Peralta, J.
 complainants, including herein private employees. And respondents are so by the in the tertiary level, the probationary period
Doctrine. The principal test for respondents, from the said finding. Thus, express provisions of the second shall not be more than six consecutive
determining whether employees are that private respondents are project paragraph of Article 280, thus: regular semesters of satisfactory
"project employees" or "regular employees has already been effectively service. The requisites to acquire
employees" is whether they are assigned established. xxx Provided, That any employee permanent employment, or security of
to carry out a specific project or who has rendered at least one year of tenure, are (1) the teacher is a full-time
undertaking, the duration and scope of Lynvil Fishing Enterprises vs. Ariola, service, whether such service is teacher; (2) the teacher must have
which are specified at the time they are G.R. No. 181974, February 1, 2012, continuous or broken, shall be considered rendered three consecutive years of
engaged for that project. Such duration, as Perez, J. a regular employee with respect to the service; and (3) such service must have
well as the particular work/service to be activity in which he is employed and his been satisfactory.
performed, is defined in an employment Doctrine. Jurisprudence, laid employment shall continue while such
agreement and is made clear to the two conditions for the validity of a fixed- activity exists. As previously held, a part-time
employees at the time of hiring. contract agreement between the employer teacher cannot acquire permanent
and employee: The same set of circumstances status. Only when one has served as a
In this case, petitioners did not indicate clearly enough that it was the full-time teacher can he acquire
have that kind of agreement with First, the fixed period of need for a continued source of income that permanent or regular status. The petitioner
respondents. Neither did they inform employment was knowingly and voluntarily forced the employees’ acceptance of the was a part-time lecturer before she was
respondents of the nature of the latter’s agreed upon by the parties without any "por viaje" provision. appointed as a full-time instructor on
work at the time of hiring. Hence, for force, duress, or improper pressure being probation. As a part-time lecturer, her
failure of petitioners to substantiate their brought to bear upon the employee and Lacuesta vs. Ateneo De Manila, G.R. employment as such had ended when her
claim that respondents were project absent any other circumstances vitiating No. 152777, December 9, 2005, contract expired. Thus, the three
employees, we are constrained to declare his consent; or Quisumbing, J. semesters she served as part-time lecturer
them as regular employees. could not be credited to her in computing
Second, it satisfactorily appears Doctrine. The Manual of the number of years she has served to
This Court agrees with the that the employer and the employee dealt Regulations for Private Schools, and not qualify her for permanent status.
findings of the CA that petitioners were with each other on more or less equal the Labor Code, determines whether or
project employees. It is not disputed that terms with no moral dominance exercised not a faculty member in an educational Petitioner posits that after
petitioners were hired for the construction by the former or the latter. institution has attained regular or completing the three-year probation with
of the Cordova Reef Village Resort in permanent status. In University of Santo an above-average performance, she
Cordova, Cebu. By the nature of the Textually, the provision that: "NA Tomas v. National Labor Relations already acquired permanent status. On
contract alone, it is clear that petitioners' ako ay sumasang-ayon na maglingkod at Commission the Court en banc said that this point, we are unable to agree with
employment was to carry out a specific gumawa ng mga gawain sang-ayon sa under Policy Instructions No. 11 issued by petitioner.
project. Hence, the CA did not commit patakarang "por viaje" na magmumula sa the Department of Labor and Employment,
grave abuse of discretion when it affirmed pagalis sa Navotas papunta sa "the probationary employment of Completing the probation period
the findings of the Labor Arbiter. The CA pangisdaan at pagbabalik sa pondohan ng professors, instructors and teachers shall does not automatically qualify her to
correctly ruled: lantsa sa Navotas, Metro Manila" is for a be subject to the standards established by become a permanent employee of the
fixed period of employment. In the context, the Department of Education and Culture." university. Petitioner could only qualify to
A review of the facts and the however, of the facts that: (1) the Said standards are embodied in paragraph become a permanent employee upon
evidence in this case readily shows that a respondents were doing tasks necessarily 75 (now Section 93) of the Manual of fulfilling the reasonable standards for
finding had been made by Labor Arbiter to Lynvil’s fishing business with positions Regulations for Private Schools. permanent employment as faculty
Ernesto Carreon, in his decision dated ranging from captain of the vessel to member. Consistent with academic
May 28, 1998, that complainants, including bodegero; (2) after the end of a trip, they Section 93 of the 1992 Manual of freedom and constitutional autonomy, an
private respondents, are project will again be hired for another trip with new Regulations for Private Schools provides institution of higher learning has the
employees. They were hired for the contracts; and (3) this arrangement that full-time teachers who have prerogative to provide standards for its
construction of the Cordova Reef Village continued for more than ten years, the satisfactorily completed their probationary teachers and determine whether these
Resort in Cordova, Cebu. We note that no clear intention is to go around the security period shall be considered regular or standards have been met. At the end of
appeal had been made by the of tenure of the respondents as regular permanent. Moreover, for those teaching the probation period, the decision to re-
hire an employee on probation, belongs to In Espiritu Santo Parochial School, we already ceased in March, in accordance outrightly inevitable. Resignation with
the university as the employer alone. held: with the provisions of her employment separation pay was the best option for him
contract. under the circumstances. Rightly so, this
We reiterate, however, that . . . the petitioners was the mode adopted and agreed upon
probationary employees enjoy security of cannot talk of a "three- 2010 Manual of Regulations for Private by the parties, as evidenced by the
tenure, but only within the period of year probationary Schools, Sec. 63 Release and Quitclaim petitioner executed
probation. Likewise, an employee on employment expiring in connection with his resignation.
probation can only be dismissed for just each school year." If it 2008 Manual of Regulations for Private
cause or when he fails to qualify as a expires per school year, Higher Education, Secs. 35-36, 117 Clearly then, the claim of
regular employee in accordance with the it is not a three-year petitioner that he was illegally dismissed
reasonable standards made known by the period. 2. Termination by cannot be sustained, considering that his
employer at the time of his hiring. Upon employee voluntary resignation has been indubitably
expiration of their contract of employment, Then in Colegio San Agustin, we said: established as a fact by the three tribunals
academic personnel on probation cannot a. Just cause below. Indeed, illegal dismissal and
automatically claim security of tenure and . . . As applied to private [Art. 285(b)] voluntary resignation are adversely
compel their employers to renew their school teachers, the opposed modes of terminating
employment contracts. In the instant case, probationary period is b. Without employment relations, in that the presence
petitioner, did not attain permanent status three years as provided cause [Art. 285(a)] of one precludes that of the other.
and was not illegally dismissed. As found in the Manual of
by the NLRC, her contract merely expired. Regulations for Private i. Intertrod Maritime vs. NLRC, G.R. No.
Schools. It must be Resignation 81087, June 19, 1991, Padilla, J.
Mt. Carmel College, Inc. vs. NLRC, G.R. stressed that the law
No. 117514, October 4, 1996, Puno, J. speaks of three years Alfaro vs. CA, G.R. No. 140812, August FACTS: Ernesto de la Cruz signed a
not three school years . . 28, 2001, Panganiban, J. shipboard employment contract with
ISSUE: Does the three-year probationary .. petitioner Troodos Shipping Company as
period for teachers refer to calendar year? Doctrine. Voluntary resignation principal and petitioner Intertrod Maritime,
Needless to say, a is defined as the act of an employee, who Inc., as agent to serve as Third Engineer
HELD: Yes. Private respondent's calendar year consists of twelve finds himself in a situation in which he on board the M/T "BREEDEN" for a period
employment contract stipulated that her (12) months, while a school year believes that personal reasons cannot be of twelve (12) months. While the ship (M/T
employment "shall be deemed to run from consists only of ten (10) months. sacrificed in favor of the exigency of the "Afamis") was at Port Pylos, Greece,
SY 1989-1990 to SY 1991-1992 (day to A school year begins in June of service; thus, he has no other choice but private respondent requested for relief,
day of month to month)". Under Section 48 one calendar year and ends in to disassociate himself from his due to "personal reason." The Master of
of the Manual of Regulations for Private March of the succeeding employment. As discussed above, the ship approved his request but informed
Schools, a school year or academic year calendar year. petitioner negotiated for a resignation with private respondent that repatriation
begins on the second Monday of June and separation pay as the manner in which his expenses were for his account and that he
shall consist of "approximately forty weeks Public respondent therefore erred employment relations with private had to give thirty (30) days notice in view
of normally five school days each, in finding that private respondent's respondent would end. He was already of the Clause 5 of the employment
exclusive of approved vacations and probationary employment was supposed suffering from a lingering illness at the time contract so that a replacement for him
including legal and special holidays, and to end in June 1992. The contract clearly he tendered his resignation. His continued (private respondent) could be arranged.
special activities." states the duration of private respondent's employment would have been detrimental
term — it shall begin at the opening of not only to his health, but also to his ISSUE: Can the resignation be withdrawn
In the cases of Espiritu Santo school year 1989-1990 (i.e., June 1989) performance as an employee of private after it was accepted by the employer?
Parochial School vs. NLRC and Colegio and shall end at the closing of school year respondent.
San Agustin vs. NLRC, the court 1991-1992 (i.e., March, 1992). Hence, HELD: No. Private respondent claims
recognized the distinction between a petitioners are not obliged to pay private Hence, the termination of the that his request for relief was only for the
calendar year and a school year. respondent her salary for the months of employment relations of petitioner with reason of taking care of a fellow member
April, May and June as her employment private respondent was ultimately, if not of the crew so much so that when he was
not allowed to disembark in Port Pylos, of the resignation was their (petitioners') resignation letters. Our review of the 28, 1999, when Mercader and he had in
Greece, the reason no longer existed and, sole prerogative. circumstances surrounding these fact already filed a complaint against Blue
therefore, when he was forced to "sign off" resignation letters does not support Blue Angel with the NLRC regarding illegal
at Port Said, Egypt even when he signified Once an employee resigns and Angel’s contentions that these letters are deductions of their salary eight days
intentions of continuing his work, he was his resignation is accepted, he no longer indications that private respondents had earlier, or on April 20, 1999. Lastly, there is
illegally dismissed. We sympathize with has any right to the job. If the employee voluntarily resigned. We agree with the nothing on record showing that Blue Angel
the private respondent; however, we later changes his mind, he must ask for labor arbiter when he pointed out that the provided any proof that Castillo, Ciriaco,
cannot sustain such contention. approval of the withdrawal of his undated, similarly worded resignation and Garces had indeed committed the
Resignation is the voluntary act of an resignation from his employer, as if he letters tended to show that the guards infractions attributed to them. Blue Angel
employee who "finds himself in a situation were re-applying for the job. It will then be were made to copy the pro-forma letters, merely enumerated the offenses without
where he believes that personal reasons up to the employer to determine whether in their own hand, to make them appear providing particulars as to the date and
cannot be sacrificed in favor of the or not his service would be continued. If more convincing that the guards had place these infractions were committed.
exigency of the service, then he has no the employer accepts said withdrawal, the voluntarily resigned. As the labor arbiter Neither did Blue Angel present written
other choice but to disassociate himself employee retains his job. If the employer noted, the element of voluntariness of the notices, warnings, and affidavits of the OIC
from his employment." The employer has does not, as in this case, the employee resignations is even more suspect to support its allegations against the
no control over resignations and so, the cannot claim illegal dismissal for the considering that the second set of guards.
notification requirement was devised in employer has the right to determine who resignation letters were pre-drafted,
order to ensure that no disruption of work his employees will be. To say that an similarly worded, and with blank spaces We are not unaware that the
would be involved by reason of the employee who has resigned is illegally filled in with the effectivity dates of the execution of the resignation letters was
resignation. This practice has been dismissed, is to encroach upon the right of resignations. In their Comment, private undisputed, but the aforementioned
recognized because "every business employers to hire persons who will be of respondents claimed being forced to sign circumstances of this case and the fact
enterprise endeavors to increase its profits service to them. and copy the pro-forma resignation letters that private respondents filed a complaint
by adopting a device or means designed and quitclaims on pain that they would not for illegal dismissal from employment
towards that goal." Moreover, under the terms of the get their remaining compensations. against Blue Angel completely negate the
employment contract, it is the ship's claim that private respondents voluntarily
Resignations, once accepted and Master who determines where a seaman We are more inclined to believe resigned. Well-entrenched is the rule that
being the sole act of the employee, may requesting relief may be "signed off." It is, the dismissed guards. Other resignation is inconsistent with the filing of
not be withdrawn without the consent of therefore, erroneous for private circumstances have been aptly pointed out a complaint for illegal dismissal. To
the employer. In the instant case, the respondent to claim that his resignation by respondents-guards in their Comment constitute resignation, the resignation
Master had already accepted the was effective only in Greece and that that we are wont to agree that they were must be unconditional with the intent to
resignation and, although the private because he was not immediately allowed forced into a situation where to refuse to operate as such. There must be clear
respondent was being required to serve to disembark in Greece (as the employer sign the resignation letters and quitclaims intention to relinquish the position. In this
the thirty (30) days notice provided in the wanted compliance with the contractual meant loss of money for the immediate case, private respondents actively pursued
contract, his resignation was already conditions for termination on the part of and urgent basic needs of their family. To their illegal dismissal case against Blue
approved. Private respondent cannot the employee), the resignation was to be buttress the conclusion that the Angel such that they cannot be said to
claim that his resignation ceased to be deemed automatically withdrawn. resignation letters were involuntary on the have voluntarily resigned from their jobs.
effective because he was not immediately part of the guards, we find convincing the
discharged in Port Pylos, Greece, for he Blue Angel Manpower and Security circumstances mentioned in the Comment Vicente vs. CA, G.R. No. 175988,
could no longer unilaterally withdraw such Services, Inc. vs. CA, G.R. No. 161196, of respondents-guards. For one, it seemed August 24, 2007, Ynarez-Santiago, J.
resignation. When he later signified his July 28, 2008, Velasco, Jr., J. unlikely and improbable that Garces and
intention of continuing his work, it was Ciriaco would voluntarily resign on April Doctrine. From the totality of
already up to the petitioners to accept his Doctrine. Blue Angel insists that 26, 1999 when they had 15 and 12 days evidence on record, it was clearly
withdrawal of his resignation. The mere the guards had pleaded to be allowed to earlier, or on April 11 and 12, 1999, demonstrated that respondent Cinderella
fact that they did not accept such resign when they were told of the pending already been terminated. Then again, it has sufficiently discharged its burden to
withdrawal did not constitute illegal investigation, and that they eventually was likewise inconsistent and implausible prove that petitioner’s resignation was
dismissal for acceptance of the withdrawal tendered their pro-forma resignation letters that Castillo would voluntarily tender his voluntary. In voluntary resignation, the
followed by their own handwritten resignation and sign a quitclaim on April employee is compelled by personal
reason(s) to disassociate himself from Bare allegations of constructive easily maneuvered or coerced to resign (a) Serious misconduct or willful
employment. It is done with the intention of dismissal, when uncorroborated by the against her will. Thus, we find no disobedience by the employee of
relinquishing an office, accompanied by evidence on record, cannot be given compelling reason to disturb the findings the lawful orders of his employer
the act of abandonment. To determine credence. In St. Michael Academy v. and conclusions of the Court of Appeals or representative in connection
whether the employee indeed intended to National Labor Relations Commission, we that petitioner voluntarily resigned and was with his work;
relinquish such employment, the act of the ruled that mere allegations of threat or not constructively dismissed by
employee before and after the alleged force do not constitute substantial respondent. (b) Gross and habitual neglect by
resignation must be considered. evidence to support a finding of forced the employee of his duties;
resignation. We enumerated the c. Civic or
Petitioner relinquished her requisites for intimidation to vitiate Military duty (Art. 286) (c) Fraud or willful breach by the
position when she submitted the letters of consent as follows: employee of the trust reposed in
resignation. The resignation letter 3. Termination by him by his employer or duly
submitted on February 15, 2000 confirmed (1) that the intimidation caused Employer authorized representative;
the earlier resignation letter she submitted the consent to be given; (2) that the (d) Commission of a crime or
on February 7, 2000. The resignation letter threatened act be unjust or unlawful; (3) a. offense by the employee against
contained words of gratitude which can that the threat be real or serious, there Substantive Due Process the person of his employer or any
hardly come from an employee forced to being evident disproportion between the immediate member of his family
resign. evil and the resistance which all men can 1. or his duly authorized
offer, leading to the choice of doing the act Just causes (Art. 282) representative; and
Subsequently, petitioner stopped which is forced on the person to do as the
reporting for work although she met with lesser evil; and (4) that it produces a well- (e) Other causes analogous to
the officers of the corporation to settle her grounded fear from the fact that the 1.1. Serious Misconduct/Willful the foregoing.
accountabilities but never raised the person from whom it comes has the disobedience
alleged intimidation employed on her. necessary means or ability to inflict the [ Northwest argues that Del
Also, though the complaint was filed within threatened injury to his person or property. Art. 282(a)] Rosario was dismissed on the grounds of
the 4-year prescriptive period, its belated xxx serious misconduct and willful
filing supports the contention of None of the above requisites was Northwest Airlines vs. del Rosario, G.R. disobedience. Misconduct refers to the
respondent that it was a mere established by petitioner. Other than the No. 157633, September 10, 2014, improper or wrong conduct that
afterthought. Taken together, these allegation that Mr. Tecson intimidated Bersamin, J. (Possible Bar Problem) transgresses some established and
circumstances are substantial proof that petitioner into resigning, there were no definite rule of action, a forbidden act, a
petitioner’s resignation was voluntary. other proofs presented to support a finding FACTS: The confrontation between flight dereliction of duty, willful in character, and
of forced resignation to stand against attendant Ma. Concepcion del Rosario and implies wrongful intent and not mere error
Hence, petitioner cannot take respondent’s denial and proof against the other flight attendant escalated into a in judgment. But misconduct or improper
refuge in the argument that it is the dismissal. Neither can we consider the heated argument. Escaño intervened but behavior, to be a just cause for termination
employer who bears the burden of proof conduct of audits and other internal the two ignored her, prompting her to rush of employment, must: (a) be serious; (b)
that the resignation is voluntary and not investigations as a form of harassment outside the aircraft to get Maria Rosario D. relate to the performance of the
the product of coercion or intimidation. against petitioner. Said investigation was Morales, the Assistant Base Manager, to employee’s duties; and (c) show that the
Having submitted a resignation letter, it is legitimate and justified, conducted in view pacify them. employee has become unfit to continue
then incumbent upon her to prove that the of the discovery of the anomalous working for the employer.
resignation was not voluntary but was transaction involving the employees of the ISSUE: Whether or not del Rosario is
actually a case of constructive respondent including petitioner. guilty serious misconduct and willful There is no doubt that the last
dismissal with clear, positive, and disobedience. two elements of misconduct were present
convincing evidence. Petitioner failed to Moreover, we note that petitioner in the case of Del Rosario. The cause of
substantiate her claim of constructive is holding a managerial position with a HELD: Yes. Under Art. 282, an employer her dismissal related to the performance of
dismissal. salary of P27,000.00 a month. Hence, she may terminate an employee for any of the her duties as a flight attendant, and she
is not an ordinary employee with limited following causes: became unfit to continue working for
understanding such that she would be Northwest. Remaining to be determined is,
therefore, whether the misconduct was Based on the foregoing, the degree at the Philippine Women’s the hands, massaging the shoulder and
serious as to merit Del Rosario’s incident involving Del Rosario and University (PWU). Unfortunately, it did not caressing the nape of a secretary); fighting
dismissal. In that respect, the fight Gamboa could not be justly considered as push through so she took up an Old within company premises;12 uttering
between her and Gamboa should be so akin to the fight contemplated by Testament course in a school of religion obscene, insulting or offensive words
seriousthat it entailed the termination of Northwest. In the eyes of the NLRC, Del and at the same time utilized her free against a superior; misrepresenting that a
her employment even if it was her first Rosario and Gamboa were arguing but not hours selling insurance and cookware to student is his nephew and pressuring and
offense. Northwest insists that what fighting. The understanding of fight as one augment her family’s income. However, intimidating a co-teacher to change that
transpired on May 18, 1998 between her that required physical combat was absent during the second semester of her study student’s failing grade to passing.
and Gamboa was obviously a form of fight during the incident of May 18, 1998. leave, she studied and passed 12 units of
that it strictly prohibited, but Del Rosario Moreover, the claim of Morales that Del education subjects at the Golden Gate Assuming arguendo that she did
disputes this by contending that it was only Rosario challenged Gamboa to a brawl Colleges in Batangas City. In response to fail to report for work on April 1, 1996 and
an animated discussion between her and (sabunutan) could not be given credence the letters sent her by petitioner to justify enroll during the first semester, the most
Gamboa. She argues that as settled in by virtue of its being self-serving in favor of her study leave, she submitted a respondent could be charged with was
American jurisprudence fight pertained to Northwest, and of its being an apparent certification from Golden Gate Colleges simple misconduct. In both instances,
combat or battle, like the hostile encounter afterthought on the part of Morales during and a letter explaining why she took up an there was evidence of substantial
or engagement between opposing forces, the investigation of the incident, without Old Testament course instead of enrolling compliance by respondent.
suggesting primarily the notion of a brawl Del Rosario having the opportunity to in her masteral class during the first
or unpremeditated encounter, or of a contest Morales' statement. In that semester. Her alleged failure to report for
pugilistic combat; while argument was a context, the investigation then served only work exactly on April 1, 1996 is not
connected discourse based upon reason, as Northwest's means to establish that the Subsequently, the President and equivalent to "failure to return for work," a
or a course of reasoning tending and grounds of a valid dismissal based on Rector of the School, Fr. Ramonclaro G. sanctionable offense under the Faculty
intended to establish a position and to serious misconduct really existed. Mendez, O. P., wrote her, stating that her Manual. As correctly pointed out by the
induce belief. failure to enroll during the first semester VA, petitioner failed to establish that there
Moreover, even assuming was a violation of the conditions of the was a distinct and definite assignment that
In several rulings where the arguendo that the incident was the kind of study leave and that the reasons she needed to be done personally by
meaning of fight was decisive, the Court fight prohibited by Northwest's Rules of advanced for failure to enroll during the respondent, and specifically on April 1,
has observed that the term fight was Conduct, the same could not be first semester were not acceptable. 1996, which she failed to do on said date.
considered to be different from the term considered as of such seriousness as to Although we give credence to petitioner’s
argument. In People v. Asto, for instance, warrant Del Rosario's dismissal from the ISSUE: Whether or not violation of the argument that a private high school
the Court characterized fight as not just a service. The gravity of the fight, which was conditions of study leave is a ground for teacher still has work at the end of the
merely verbal tussle but a physical combat not more than a verbal argument between dismissal. school year – to assist in the graduation
between two opposing parties, to wit: them, was not enough to tarnish or preparations – and in the beginning of the
diminish Northwest's public image. HELD: No. Misconduct is improper or school year – to assist in the enrollment –
Well into their second bottle of wrongful conduct. It is the transgression of such tasks cannot be considered a
gin, at about eleven o'clock that morning, Colegio de San Juan de Letran- some established and definite rule of teacher’s main duties, the failure to
Fernando Aquino and Peregrino had a Calamba vs. Villas, G.R. No. 137795, action, a forbidden act, a dereliction of perform which would be tantamount to
verbal tussle. Fernando Aquino declared March 26, 2003, Corona, J. duty, willful in character, and implies dereliction of duty or abandonment.
that he was going to run for councilor of wrongful intent and not mere error of Besides, there is no disagreement that
Alcala, Pangasinan. Peregrino countered FACTS: Belen Villas was employed by judgment. Under Article 282 of the Labor respondent reported for work on May 15,
by saying: "If you will run for that post, the petitioner school as high school Code, the misconduct, to be a just cause 1996 at which time petitioner School could
cousin, I will fight you." After a brief teacher in September 1985. She applied for termination, must be serious. This have asked her to assist in the enrollment
exchange of words, Fernando Aquino, for a study leave for six months. The implies that it must be of such grave and period. At most, respondent failed to help
laughing, went to sit beside Abagat. As principal of the school, Quiatchon, told her aggravated character and not merely trivial out during the preparations for graduation
Aquino continued with his mirth, Abagat that her application was approved subject or unimportant. Examples of serious and this, to us, was not a significant
stared at Peregrino with contempt. to certain conditions. Villas alleged that misconduct justifying termination, as held reason for terminating or dismissing her
she intended to utilize the first semester of in some of our decisions, include: sexual from her job.
her study leave to finish her masteral harassment (the manager’s act of fondling
 With regard to her alleged failure June 1, 2003. In response, the petitioner marital sexual relations, is strictly upheld mo." In these cases, the dismissed
to enroll during the first semester, although informed Sr. Quiambao that she would not and taught to the students. That her employees personally subjected their
we agree with the President and Rector, resign from her employment just because indiscretion, which resulted in her respective superiors to the foregoing
Fr. Mendez, that respondent should have she got pregnant without the benefit of pregnancy out of wedlock, is anathema to verbal abuses. The utter lack of respect for
first ascertained whether she was still marriage. the doctrines of the Catholic Church. their superiors was patent. In contrast,
eligible to study at the PWU before However, viewed against the prevailing when petitioner was heard to have uttered
applying for a study leave, such lapse was ISSUE: Is pregnancy out of wedlock a norms of conduct, the petitioner’s conduct the alleged offensive words against
more of an error in judgment rather than valid ground for dismissal? cannot be considered as disgraceful or respondent company’s president and
an act of serious misconduct. If immoral; such conduct is not denounced general manager, the latter was not
respondent intended to use her study HELD: No. The morality referred to in the by public and secular morality. It may be around.
leave for other unauthorized purposes, as law is public and necessarily secular, not an unusual arrangement, but it certainly is
petitioner would like us to believe, she religiousx x x. "Religious teachings as not disgraceful or immoral within the Under the foregoing
would not have enrolled at the Golden expressed in public debate may influence contemplation of the law. circumstances, we are convinced - as the
Gate Colleges during the second the civil public order but public moral Labor Arbiter, the NLRC and the CA had
semester. Yet she did, as borne out by the disputes may be resolved only on grounds Benitez vs. Sta. Fe Moving & been - that Benitez's offense constituted a
certification prepared by the Registrar of articulable in secular terms." Relocation, G.R. No. 208163, April 20, serious misconduct as defined by law. His
Golden Gate Colleges. 2015, Brion, J. (*Possible Bar Problem) display of insolent and disrespectful
For a particular conduct to behavior, in utter disregard of the time and
Furthermore, we find that constitute "disgraceful and immoral" FACTS: During the Christmas Party, place of its occurrence, had very much to
respondent did not violate the prohibition behavior under civil service laws, it must Union’s Vice President Benitez berated do with his work. He set a bad example as
on engaging in employment outside the be regulated on account of the concerns of and maligned company’s Managing a union officer and as a crew leader of a
school as specified in her study leave public and secular morality. It cannot be Director Kurangil by throwing foul and vital division of the company. His
grant and as provided in the Faculty judged based on personal bias, offensive words at him, such as "putang actuations during the company's
Manual. We find the provision of the specifically those colored by particular ina mo ka VK, gago ka! "Benitez’s tirade, Christmas Party, to our mind, could have
Faculty Manual ambiguous as the term mores. Nor should it be grounded on they added, included the company and it had negative repercussions for his
"employment" connotes a number of "cultural" values not convincingly officers. Moreover, the incident happened employer had he been allowed to stay on
meanings. Employment in its general demonstrated to have been recognized in in front of the company’s employees, their the job. His standing before those clients
sense connotes any work or service the realm of public policy expressed in the families, as well as company clients and who witnessed the incident and those who
rendered in exchange for money. The Constitution and the laws. At the same guests. would hear of it would surely be
loose connotation of employment may time, the constitutionally guaranteed rights diminished, to the detriment of the
therefore cover jobs without an employer- (such as the right to privacy) should be ISSUE: Are the acts of Benitez constitute company.
employee relationship. However, observed to the extent that they protect ground for dismissal?
inasmuch as in this case, petitioner School behavior that may be frowned upon by the The Coffee Bean & Tea Leaf (CBTL) vs.
drafted the said policy, the term majority. HELD: Yes. The instant case should be Arenas, G.R. No. 208908, March 11,
"employment" should be strictly construed distinguished from the previous cases 2015, Brion, J.
against it. In this case, it was not disputed where we held that the use of insulting and
that, like respondent, the father of her child offensive language constituted gross FACTS: To ensure the quality of its crew’s
Leus vs. St. Scholastica’s College, G.R. was unmarried. Therefore, respondent misconduct justifying an employee’s services, CBTL regularly employs a
No. 187226, January 28, 2015, Reyes, J. cannot be held liable for disgraceful and dismissal. In De la Cruz vs. NLRC, the "mystery guest shopper" who poses as a
(*Possible Bar Problem) immoral conduct simply because she gave dismissed employee shouted "saying ang customer, for the purpose of covertly
birth to the child Christian Jeon out of pagka-professional mo!" and "putang ina inspecting the baristas’ job performance.
FACTS: Leus and her boyfriend wedlock. mo" at the company physician when the Mystery guest shopper at the Paseo
conceived a child out of wedlock. When latter refused to give him a referral slip. In Center Branch submitted a report stating
SSCW learned of the petitioner’s Admittedly, the petitioner is Autobus Workers’ Union (AWU) v. NLRC, that Arenas was seen eating non-CBTL
pregnancy, Sr. Edna Quiambao (Sr. employed in an educational institution the dismissed employee called his products at CBTL’s al fresco dining area
Quiambao), SSCW’s Directress, advised where the teachings and doctrines of the supervisor "gago ka" and taunted the latter while on duty. As a result, the counter was
her to file a resignation letter effective Catholic Church, including that on pre- by saying "bakit anong gusto mo tang ina
left empty without anyone to take and about who placed the bottled iced tea regulations, or instructions must be: (1)
prepare the customers’ orders. Gross negligence implies a want inside the ice bin, his immediate reaction reasonable and lawful, (2) sufficiently
or absence of, or failure to exercise even a was not to deny his mistake, but to remove known to the employee, and (3) in
On another occasion, Katrina slight care or diligence, or the entire the bottle inside the bin and throw it connection with the duties which the
Basallo (Basallo), the duty manager of absence of care. It evinces a thoughtless outside. More importantly, when he was employee has been engaged to
CBTL, conducted a routine inspection of disregard of consequences without asked to make a written explanation of his discharge."
the Paseo Center Branch. While exerting any effort to avoid them. There is action, he admitted that the bottled iced
inspecting the store’s products, she habitual neglect if based on the tea was his. Tested against the foregoing, the
noticed an iced tea bottle being chilled circumstances, there is a repeated failure Court finds that Sanchez was validly
inside the bin where the ice for the to perform one’s duties for a period of Thus, even if there was an initial dismissed by SLMC for her willful
customers’ drinks is stored; thus, she time. reticence on Arenas’ part, his subsequent disregard and disobedience of Section 1,
called the attention of the staff on duty. act of owing to his mistake only shows the Rule I of the SLMC Code of Discipline,
When asked, Arenas muttered, "kaninong In light of the foregoing criteria, absence of a deliberate intent to lie or which reasonably punishes acts of
iced tea?" and immediately picked the we rule that Arenas’ three counts of deceive his CBTL superiors. On this score, dishonesty, i.e., "theft, pilferage of hospital
bottle and disposed it outside the store. tardiness cannot be considered as gross we conclude that Arenas’ action did not or co-employee property, x x x or its
and habitual neglect of duty. The amount to serious misconduct. attempt in any form or manner from the
ISSUE: Whether or not Arenas’ acts infrequency of his tardiness already hospital, co-employees, doctors, visitors,
constitute a valid ground for dismissal. removes the character of habitualness. St. Lukes Medical Center vs. Sanchez, [and] customers (external and internal)"
These late attendances were also broadly G.R. No. 212054, March 11, 2015, with termination from employment. Such
HELD: No. For willful disobedience to be spaced out, negating the complete Perlas-Bernabe, J. act is obviously connected with Sanchez's
a valid cause for dismissal, these two absence of care on Arenas’ part in the work, who, as a staff nurse, is tasked with
elements must concur: (1) the employee’s performance of his duties. Even CBTL FACTS: Sanchez passed through the the proper stewardship of medical
assailed conduct must have been willful, admitted in its notice to explain that this SLMC Centralization Entrance/Exit where supplies. Significantly, records show that
that is, characterized by a wrongful and violation does not merit yet a disciplinary she was subjected to the standard Sanchez made a categorical admission in
perverse attitude; and (2) the order action and is only an aggravating inspection procedure by the security her handwritten letter - i.e., "[k]ahit alam
violated must have been reasonable, circumstance to Arenas’ other violations. personnel. In the course thereof, the kong bawal ay nagawa kong [makapag-
lawful, made known to the employee, and Security Guard on-duty, Jaime Manzanade uwi] ng gamit" - that despite her
must pertain to the duties which he had To further justify Arenas’ (SG Manzanade), noticed a pouch in her knowledge of its express prohibition under
been engaged to discharge. dismissal, CBTL argues that he committed bag and asked her to open the the SLMC Code of Discipline, she still
serious misconduct when he lied about same. When opened, said pouch knowingly brought out the subject medical
Tested against these standards, it using the ice bin as cooler for his bottled contained assortment of medical stocks items with her. It is apt to clarify that SLMC
is clear that Arenas’ alleged infractions do iced tea. Under CBTL’s employee which were subsequently confiscated. cannot be faulted in construing the taking
not amount to such a wrongful and handbook, dishonesty, even at the first She was brought to the SLMC In-House of the questioned items as an act of
perverse attitude. Though Arenas may instance, warrants the penalty of Security Department (IHSD) where she dishonesty (particularly, as theft, pilferage,
have admitted these wrongdoings, these termination from service. was directed to write an Incident Report or its attempt in any form or manner)
do not amount to a wanton disregard of explaining why she had the questioned considering that the intent to gain may be
CBTL’s company policies. As Arenas For misconduct or improper items in her possession. She reasonably presumed from the furtive
mentioned in his written explanation, he behavior to be a just cause for dismissal, complied with the directive and also taking of useful property appertaining to
was on a scheduled break when he was (a) it must be serious; (b) it must relate to submitted an undated handwritten letter of another. Note that Section 1, Rule 1 of the
caught eating at CBTL’s al fresco dining the performance of the employee’s duties; apology. SLMC Code of Discipline is further
area. During that time, the other service and (c) it must show that the employee supplemented by the company policy
crews were the one in charge of manning has become unfit to continue working for ISSUE: Whether or not Sanchez’s act is a requiring the turn-over of excess medical
the counter. Notably, CBTL’s employee the employer. valid ground for dismissal. supplies/items for proper handling and
handbook imposes only the penalty of providing a restriction on taking and
written warning for the offense of eating However, the facts on record HELD: Yes. Note that for an employee to bringing such items out of the SLMC
non-CBTL products inside the store’s reveal that there was no active dishonesty be validly dismissed on this ground [Art. premises without the proper authorization
premises. on the part of Arenas. When questioned 282(a)], the employer's orders, or "pass" from the official
concerned, which Sanchez was equally similar infraction, respondent even wrote respondent does not conclusively confirm Sales and Marketing Director, emailed
aware thereof. Nevertheless, Sanchez petitioner Cheng a letter dated 29 the alleged practice. Aliling to express dissatisfaction with the
failed to turn-over the questioned items November 1999 where he admitted that latter’s performance.
and, instead, "hoarded" them, as his tardiness has affected the delivery In Valiao, we defined gross
purportedly practiced by the other staff schedules of the company, offered an negligence as "want of care in the ISSUE: Is Aliling grossly inefficient?
members in the Pediatric Unit. As it is apology, and undertook to henceforth performance of one’s duties" and habitual
clear that the company policies subject of report for duty on time. Despite this neglect as "repeated failure to perform HELD: No. In Lim v. National Labor
this case are reasonable and lawful, undertaking, he continued to either absent one’s duties for a period of time, Relations Commission, the Court
sufficiently known to the employee, and himself from work or report late during the depending upon the circumstances." considered inefficiency as an analogous
evidently connected with the latter's work, first quarter of 2000. These are not overly technical terms, just cause for termination of employment
the Court concludes that SLMC dismissed which, in the first place, are expressly under Article 282 of the Labor Code:
Sanchez for a just cause. The imputed absence and sanctioned by the Labor Code of the
tardiness of the complainant are Philippines, to wit: We cannot but agree with PEPSI
documented. He faltered on his that "gross inefficiency" falls within the
1.2. Gross and habitual attendance 38 times of the 66 working Art. 282. Termination by purview of "other causes analogous to the
neglect of duty [Art. 282(b)] days. His last absences on 11, 13, 14, 15 employer. - An employer may terminate an foregoing," this constitutes, therefore, just
and 16 March 2000 were undertaken employment for any of the following cause to terminate an employee under
Mansion Printing Center vs. Bitara, Jr., without even notice/permission from causes: Article 282 of the Labor Code. One is
G.R. No. 168120, January 25, 2012, management. These attendance analogous to another if it is susceptible of
Perez, J. delinquencies may be characterized as (a) xxx comparison with the latter either in general
habitual and are sufficient justifications to (b) Gross and habitual neglect or in some specific detail; or has a close
FACTS: Petitioners engaged the services terminate the complainant’s employment. by the employee of his duties; relationship with the latter. "Gross
of respondent as a helper (kargador). xxx inefficiency" is closely related to "gross
Respondent was later promoted as the There is likewise no merit in the neglect," for both involve specific acts of
company’s sole driver tasked to pick-up observation of the Court of Appeals that Clearly, even in the absence of a omission on the part of the employee
raw materials for the printing business, the petitioners themselves are not certain written company rule defining gross and resulting in damage to the employer or to
collect account receivables and deliver the of the official time of their employees after habitual neglect of duties, respondent’s his business. In Buiser vs. Leogardo, this
products to the clients within the delivery pointing out the seeming inconsistencies omissions qualify as such warranting his Court ruled that failure to observed
schedules. Petitioners aver that the timely between the statement of the petitioners dismissal from the service. prescribed standards to inefficiency may
delivery of the products to the clients is that "there is no need for written rules constitute just cause for dismissal.
one of the foremost considerations since even the [respondent] is aware that Aliling vs. Feliciano, G.R. No. 185829,
material to the operation of the business. It his job starts from 8 am to 5 pm" and its April 25, 2012, Velasco, Jr., J. It did so anew in Leonardo v.
being so, they closely monitored the Memorandum of 23 June 1999, where it National Labor Relations Commission on
attendance of respondent. They noted his was mentioned that respondent’s official FACTS: Wide Wide World Express the following rationale:
habitual tardiness and absenteeism. time was from 8:30 a.m. to 5:30 p.m. On Corporation (WWWEC) offered to employ
the contrary, it was clearly stated in the petitioner Armando Aliling (Aliling) as An employer is entitled to impose
ISSUE: Whether or not a ground exist to Memorandum that the Management "Account Executive (Seafreight Sales)". productivity standards for its workers, and
dismiss Bitara, Jr. adjusted his official time from 8:00 a.m. to Training then started. However, instead of in fact, non-compliance may be visited
5:00 p.m. to 8:30 a.m. to 5:30 p.m. to a Seafreight Sale assignment, WWWEC with a penalty even more severe than
HELD: Yes. In the present case, hopefully solve the problem on his asked Aliling to handle Ground Express demotion. Thus, the practice of a company
however, petitioners have repeatedly tardiness. (GX), a new company product launched in laying off workers because they failed to
called the attention of respondent on June 18, 2004 involving domestic cargo make the work quota has been recognized
concerning his habitual tardiness. The Neither is there basis to hold that forwarding service for Luzon. Marketing in this jurisdiction. In the case at bar, the
Memorandum dated 23 June 1999 of the company tolerates the offsetting of this product and finding daily contracts for petitioners' failure to meet the sales quota
petitioner Cheng required him to explain undertime with overtime services. The it formed the core of Aliling’s new assigned to each of them constitute a just
his tardiness. Also in connection with a Weekly Time Record relied upon by assignment. Barely a month after, Manuel cause of their dismissal, regardless of the
F. San Mateo III (San Mateo), WWWEC permanent or probationary status of their
employment. Failure to observe prescribed assessment of him would be more important assignments on several strengthen the adverse averments against
standards of work, or to fulfill reasonable accurate. occasions. While petitioner explained in her. It is well to state that as a CHR
work assignments due to inefficiency may her written reply to the Prerequisite Notice Director tasked to efficiently manage the
constitute just cause for dismissal. Such Being an experimental activity that such failure to communicate was due company’s human resource team and
inefficiency is understood to mean failure and having been launched for the first to the company’s computer system practically being considered the "face" of
to attain work goals or work quotas, either time, the sales of GX services could not be breakdown, respondents however were the Human Resource, petitioner should
by failing to complete the same within the reasonably quantified. This would explain able to negate this as they have shown exhibit utmost concern for her employer’s
allotted reasonable period, or by producing why Amador implied in her email that other that the computer virus which affected the interest. She should likewise establish not
unsatisfactory results. This management bases besides sales figures will be used to company’s system only damaged some only credibility but also respect from co-
prerogative of requiring standards may be determine Aliling’s performance. And yet, email addresses of certain employees workers which can only be attained if she
availed of so long as they are exercised despite such a neutral observation, Aliling which did not include that of Sauceda’s. demonstrates maturity and
in good faith for the advancement of the was still dismissed for his dismal sales of On the other hand, petitioner failed to professionalism in the discharge of her
employer's interest. GX services. In any event, WWWEC failed present any concrete proof that the said duties. She is also expected to act as a
to demonstrate the reasonableness and computer virus also damaged Sauceda’s role model who displays uprightness both
In fine, an employee’s failure to the bona fides on the quota imposition. email account as to effectively disrupt their in her own behavior and in her dealings
meet sales or work quotas falls under the regular communication. Moreover, we with others.
concept of gross inefficiency, which in turn Reyes-Rayel vs. Philippine Luen Thai agree with respondents’ stance that
is analogous to gross neglect of duty that Holdings, G.R. No. 174893, July 11, petitioner could still reach Sauceda The third and most important
is a just cause for dismissal under Article 2012, Del Castillo, J. through other means of communication is petitioner’s display of inefficiency
282 of the Code. However, in order for the and should not completely rely on the web. and ineptitude in her job as a CHR
quota imposed to be considered a valid FACTS: PLTHC hired Reyes-Rayel as Director. In the affidavit of Ornida B.
productivity standard and thereby validate Corporate Human Resources (CHR) Second, the affidavits of Calma, Chief Accountant of L&T’s affiliate
a dismissal, management’s prerogative of Director for Manufacturing for its petitioner’s co-workers revealed her company, petitioner, on two occasions,
fixing the quota must be exercised in good subsidiary/affiliate company, L&T. In the negative attitude and unprofessional gave wrong information regarding issues
faith for the advancement of its interest. employment contract, petitioner was behavior towards them and the company. on leave and holiday pay which generated
The duty to prove good faith, however, tasked to perform functions in relation to In her affidavit, Agnes Suzette Pasustento, confusion among employees in the
rests with WWWEC as part of its burden to administration, recruitment, benefits, L&T’s Manager for the Corporate computation of salaries and wages. Due to
show that the dismissal was for a just audit/compliance, policy development/ Communications Department, attested to the nature of her functions, petitioner is
cause. WWWEC must show that such structure, project plan, and such other petitioner’s "badmouthing" of Sauceda in expected to have strong working
quota was imposed in good faith. This works as may be assigned by her one of their meetings abroad and of knowledge of labor laws and regulations to
WWWEC failed to do, perceptibly because immediate superior, Frank Sauceda discussing with her about filing a labor help shed light on issues and questions
it could not. The fact of the matter is that (Sauceda), PLTHC’s Corporate Director case against the company. Also, in the regarding the same instead of
the alleged imposition of the quota was a for Human Resources. affidavits of Rizza S. Esplana (Sauceda’s complicating them. Petitioner obviously
desperate attempt to lend a semblance of Executive Assistant), Cynthia failed in this respect.
validity to Aliling’s illegal dismissal. It must ISSUE: Whether or not Reyes-Rayel Yñiguez (Corporate Human Resources
be stressed that even WWWEC’s sales committed gross inefficiency. Manager of an affiliate of L&T), and Ana No wonder she received a less
manager, Eve Amador (Amador), in an Wilma Arreza (Human Resources and than par performance in her performance
internal e-mail to San Mateo, hedged on HELD: Yes. First, records show that Administration Division Manager of an evaluation conducted in June 2001,
whether petitioner performed below or petitioner indeed unreasonably failed to affiliate of L&T), they narrated several contrary to her assertion that an 80.2%
above expectation: Could not quantify effectively communicate with her instances which demonstrated petitioner’s rating illustrates good and dependable
level of performance as he as was tasked immediate superior. There was an notoriously bad temper. They all described work performance. As can be gleaned in
to handle a new product (GX). Revenue apparent neglect in her obligation to her to have an "irrational" behavior and the performance appraisal form, petitioner
report is not yet administered by IT on a maintain constant communication with "superior and condescending" attitude in received deficient marks and low ratings
month-to-month basis. Moreover, this in a Sauceda in order to ensure that her work the workplace. Unfortunately for petitioner, on areas of problem solving and decision
way is an experimental activity. Practically is up to par. This is evident from the these sworn statements which notably making, interpersonal relationships,
you have a close monitoring with Armand various emails showing that she failed to remain uncontroverted and unrefuted, planning and organization, project
with regards to his performance. Your update Sauceda on the progress of her militate against her innocence and management and integrity notwithstanding
an overall passing grade. As aptly suspicions otherwise, the employee would the issuance of additional receipts for
remarked by the CA, these low marks eternally remain at the mercy of the excessive payments exacted from As may be readily gleaned from
revealed the "degree of [petitioner’s] work employer. Loss of confidence must not be customers is a willful breach of the trust the records, Episcope was employed by
handicap" and should have served as a indiscriminately used as a shield by the reposed in him by the company. PPHI as a service attendant in its Café
notice for her to improve on her job. employer against a claim that the Plaza. In this regard, she was tasked to
However, she appeared complacent and dismissal of an employee was arbitrary. Philippine Plaza Holdings vs. Episcope, attend to dining guests, handle their bills
remained lax in her duties and this And, in order to constitute a just cause for G.R. No. 192826, February 7, 2013, and receive their payments for transmittal
naturally resulted to respondents’ loss of dismissal, the act complained of must Perlas-Bernabe, J. to the cashier. It is also apparent that
confidence in her managerial abilities. be work-related and shows that the whenever discount cards are presented,
employee concerned is unfit to continue Doctrine. Among the just she maintained the responsibility to take
working for the employer. In addition, loss causes for termination isthe employer’s them to the cashier for the application of
1.3. Loss of trust and of confidence as a just cause for loss of trust and confidence in its discounts. Being therefore involved in the
confidence [Art. 282(c)] termination of employment is premised on employee. Article 296 (c) (formerly Article handling of company funds, Episcope is
the fact that the employee concerned 282 [c]) of the Labor Code provides that undeniably considered an employee
holds a position of responsibility, trust and an employer may terminate the services of occupying a position of trust and
1.3.1. Managerial and rank- confidence or that the employee an employee for fraud or willful breach of confidence and as such, was expected to
and-file employees concerned is entrusted with confidence the trust reposed in him. But in order for act with utmost honesty and fidelity.
with respect to delicate matters, such the said cause to be properly invoked,
Villanueva, Jr. vs. NLRC, G.R. No. as handling or case and protection of the certain requirements must be complied In the present case, records
176893, June 13, 2012, Mendoza, J. property and assets of the employer. The with namely, (1) the employee concerned would show that Episcope committed acts
betrayal of this trust is the essence of the must be holding a position of trust and of dishonesty which resulted to monetary
Doctrine. Dismissal from offense for which an employee is confidence and (2) there must be an act loss on the part of PPHI and more
employment has two aspects: 1) the penalized. that would justify the loss of trust and significantly, led to the latter’s loss of trust
legality of the act of dismissal per se, confidence. and confidence in her. Notwithstanding the
which constitutes substantive due process, As a safeguard against impaired probative value of the unaudited
and 2) the legality of the manner of employers who indiscriminately use "loss It is noteworthy to mention that and unsigned auditor’s report, the totality
dismissal, which constitutes procedural of trust and confidence" to justify arbitrary there are two classes of positions of of circumstances supports the foregoing
due process. dismissal of employees, the Court, in trust: on the one hand, there are findings:
addition to the above elements, came up managerial employees whose primary
In the case of Cruz v. Court of with the following guidelines for the duty consists of the management of the First, it remains unrefuted that
Appeals, the Court had the occasion to application of the doctrine: (1) loss of establishment in which they are employed Episcope attended to the auditors when
enumerate the essential elements for confidence should not be simulated; (2) it or of a department or a subdivision they dined at the Café Plaza on the date
"willful breach by the employee of the trust should not be used as a subterfuge for thereof, and to other officers or members and time in question. In fact, Episcope
reposed in him by his employer": causes which are improper, illegal or of the managerial staff; on the other hand, herself admitted that she tendered Check
unjustified; (3) it may not be arbitrarily there are fiduciary rank-and-file No. 565938 bearing the amount
xxx the loss of trust and asserted in the face of overwhelming employees, such as cashiers, auditors, of P2,306.65 and received the amount
confidence must be based on willful evidence to the contrary; and (4) it must property custodians, or those who, in the of P2,400.00 as payment;
breach of the trust reposed in the be genuine, not a mere afterthought, to normal exercise of their functions,
employee by his employer. Such breach is justify an earlier action taken in bad faith. regularly handle significant amounts of Second, it is likewise undisputed
willful if it is done intentionally, knowingly, money or property. These employees, that the check receipt on file with the Hotel
and purposely, without justifiable excuse, In this case, the above requisites though rank-and-file, are routinely charged for the same transaction reflected only the
as distinguished from an act done have been met. Meralco’s loss of trust and with the care and custody of the amount of P1,400.20 in view of the
carelessly, thoughtlessly, heedlessly or confidence arising out of Villanueva’s act employer's money or property, and are application of a certain Starwood Privilege
inadvertently. Moreover, it must be based of misappropriation of company funds in thus classified as occupying positions of Discount Card registered in the name of
on substantial evidence and not on the the course of processing customer trust and confidence. Episcope belongs to one Peter Pamintuan, while the receipt
employer’s whims or caprices or applications has been proven by this latter class and therefore, occupies a given to the auditors bore the
substantial evidence, thus, justified. Verily, position of trust and confidence. undiscounted amount of P2,306.65 which
thus, resulted to a P906.45 discrepancy. trust; and (2) the loss of trust must be accountabilities fell on the respondents. It and confidence. Neither was the petitioner
During the proceedings, both receipts based on willful breach of trust founded on was the single and absolute evidence of grossly negligent or unjustified in pursuing
were actually presented in evidence yet, clearly established facts. the petitioner’s act that purportedly kindled the course of action he took.
Episcope never interposed any objection the respondents’ loss of trust. Without it,
on the authenticity of the same; and There is no arguing that the the respondents’ allegation of loss of trust It must be pointed out that the
petitioner was part of the upper echelons and confidence has no leg to stand on and petitioner was caught in the quandary of
Third, when asked to explain the of RBSJI’s management from whom must thus be rejected. Moreover, one can signing on the spot a standard
said discrepancy, Episcope merely greater fidelity to trust is expected. At the reasonably expect that a copy of the employment clearance for the furious
imputed culpability on the part of the time when he committed the act which clearance, an essential personnel Jacinto sans any information on his
cashier, whom she claimed prepared all allegedly led to the loss of RBSJI’s trust document, is with the respondents. Their outstanding accountabilities, and refusing
the receipts that were returned to the and confidence in him, he was the Acting failure to present it and the lack of to so sign but risk alarming or scandalizing
guests. Manager of N. Domingo branch. It was explanation for such failure or the RBSJI, its employees and clients. Contrary
part of the petitioner’s responsibilities to document’s unavailability props up the to the respondents’ allegation, the
From the foregoing incidents, it is effect a smooth turn-over of pending presumption that its contents are petitioner did not concede to Jacinto’s
clear that Episcope was remiss in her duty transactions and to sign and approve unfavorable to the respondents’ demands. He was, in fact, able to equalize
to carefully account for the money she instructions within the limits assigned to assertions. two equally undesirable options by
received from the cafe's guests. It must be the position under existing bargaining to instead clear Jacinto only of
observed that though the receipts were regulations. Prior thereto and ever since At any rate, the absence of the his settled financial obligations after proper
prepared by the cashier, Episcope; as a he was employed, he has occupied clearance upon which the contradicting verification with branch cashier Lily. It was
service attendant,. was the one who positions that entail the power or claims of the parties could ideally be only after Lily confirmed Jacinto’s recorded
actually handled the money tendered to prerogative to dictate management resolved, should work against the payments that the petitioner signed the
her by the hotel clients. In this regard, policies – as Personnel and Marketing respondents. With only sworn pleadings clearance. The absence of an audit was
prudence dictates that Episcope should Manager and thereafter as Vice-President. as proof of their opposite claims on the precisely what impelled the petitioner to
have at least known why there was a true contents of the clearance, the Court is decline signing a standard employment
shortage in remittance. Yet when asked, The presence of the first requisite bound to apply the principle that the scales clearance to Jacinto and instead issue a
Episcope could not offer any plausible is thus certain. Anent the second requisite, of justice should be tilted in favor of labor different one pertaining only to his paid
explanation but merely shifted the blame the Court finds that the respondents failed in case of doubt in the evidence accountabilities.
to the cashier. Irrefragably, as an to meet their burden of proving that the presented.
employee who was routinely charged with petitioner’s dismissal was for a just cause. Under these circumstances, it
the care and custody of her employer's RBSJI also failed to substantiate cannot be concluded that the petitioner
money, Episcope was expected to have The act alleged to have caused its claim that the petitioner’s act estopped was in any way prompted by malicious
been more circumspect in the the loss of trust and confidence of the them from pursuing Jacinto for his motive in issuing the clearance. He was
performance of her duties as a service respondents in the petitioner was his standing obligations. There is no proof that also able to ensure that RBSJI’s interests
attendant. This she failed to observe in the issuance, without prior authority and audit, RBSJI attempted or at least considered to are protected and that Jacinto is pacified.
case at bar which thus, justifies PPHI's of a clearance to Jacinto who turned out to demand from Jacinto the payment of his He did what any person placed in a similar
loss of trust and confidence in her as well be still liable for unpaid cash advances unpaid cash advances. Neither was RBSJI situation can prudently do. He was able to
as her consequent dismissal. and for an P11-million fraudulent able to show that it filed a civil or criminal competently evaluate and control Jacinto’s
transaction that exposed RBSJI to suit. suit against Jacinto to make him demands and thus prevent compromising
Torres vs. Rural Bank of San Juan, G.R. According to the respondents, the responsible for the alleged fraud. There is RBSJI’s image, employees and clients to
No. 184520, March 13, 2013, Reyes, J. clearance barred RBSJI from running after thus no factual basis for RBSJI’s allegation an alarming scene.
Jacinto. The records are, however, barren that it incurred damages or was financially
Doctrine. Further, the law of any evidence in support of these claims. prejudiced by the clearance issued by the The Court has repeatedly
mandates that before validity can be petitioner. emphasized that the act that breached the
accorded to a dismissal premised on loss As correctly argued by the trust must be willful such that it was done
of trust and confidence, two requisites petitioner and as above set forth, the onus More importantly, the complained intentionally, knowingly, and purposely,
must concur, viz: (1) the employee of submitting a copy of the clearance act of the petitioner did not evince without justifiable excuse, as distinguished
concerned must be holding a position of allegedly exonerating Jacinto from all his intentional breach of the respondents’ trust from an act done carelessly, thoughtlessly,
heedlessly or inadvertently. The conditions refused, he was sent the memorandum requirements must be complied with, entry in the branch operating system
under which the clearance was issued questioning his issuance of a clearance to namely: (1) the employee must be holding recognizing miscellaneous income. Such
exclude any finding of deliberate or Jacinto seven months earlier. The a position of trust and confidence; and (2) an entry could have been easily reversed
conscious effort on the part of the confluence of these undisputed there must be an act that would justify the once it became clear how the overage
petitioner to prejudice his employer. circumstances supports the inference that loss of trust and confidence. While loss of came about.
the clearance incident was a mere trust and confidence should be genuine, it
Also, the petitioner did not afterthought used to gain ground for the does not require proof beyond reasonable But the respondent obviously
commit an irregular or prohibited act. He petitioner’s dismissal. doubt, it being sufficient that there is some thought that by skipping the entry, she
did not falsify or misrepresent any basis to believe that the employee could keep Tuling from learning about the
company record as it was officially Loss of trust and confidence as a concerned is responsible for the overage. Her trustworthiness as branch
confirmed by Lily that the items covered by ground for dismissal has never been misconduct and that the nature of the cashier and bookkeeper has been
the clearance were truly settled by Jacinto. intended to afford an occasion for abuse employee’s participation therein rendered irreparably tarnished. The respondent’s
Hence, the respondents had no factual because of its subjective nature. It should him unworthy of trust and confidence untrustworthiness is further demonstrated
basis in declaring that the petitioner not be used as a subterfuge for causes demanded by his position. when she began to concoct lies
violated Category B Grave Offense No. 1 which are illegal, improper and unjustified. concerning the overage: first, by denying
of the Company Code of Conduct and It must be genuine, not a mere The petitioners are fully justified its existence to Tuling and again to the
Discipline. afterthought intended to justify an earlier in claiming loss of trust and confidence in company auditor; later, when she falsely
action taken in bad faith. the respondent. While it is natural and claimed that a computer glitch or
The respondents cannot understandable that the respondent malfunction had prevented her from
capitalize on the petitioner’s lack of PJ Lhuiller vs. Velayo, G.R. No. 198620, should feel apprehensive about Tuling’s posting the amount on October 29, 2007;
authority to issue a clearance to resigned November 12, 2014, Reyes, J. reaction concerning her cash overage, and finally, when she was forced to admit
employees. First, it remains but an considering that it was their first time to be before the company’s investigating panel
unsubstantiated allegation despite the FACTS: In addition to its pawnshop working together in the same branch, we that she took and spent the money.
several opportunities for them in the operations, the PJLI offers its "Pera must keep in mind that the unaccounted The respondent’s actuations were
proceedings below to show, through bank Padala" cash remittance service whereby, cash can only be imputed to the willful and deliberate. A cashier who,
documents, that the petitioner is not for a fee or "sending charge," a customer respondent’s own negligence in failing to through carelessness, lost a document
among those officers so authorized. may remit money to a consignee through keep track of the transaction from which evidencing a cash receipt, and then wilfully
Second, it is the Court’s considered view its network of pawnshop branches all over the money came. A subsequent branch chose not to record the excess cash as
that by virtue of the petitioner’s stature in the country. It hired Velayo as accounting audit revealed that it came from a "Pera miscellaneous income and instead took it
respondent bank, it was well-within his clerk and also performing the functions of Padala" remittance, implying that although home and spent it on herself, and later
discretion to sign or certify the truthfulness vault custodian and cashier. One day, a the amount had been duly remitted to the repeatedly denied or concealed the cash
of facts as they appear in RBSJI’s records. customer sent P500.00 through its branch consignee, the sending branch failed to overage when confronted, deserves to be
Here, the records of RBSJI cashier Lily in Capistrano, Cagayan de Oro City, and record the payment received from the dismissed.
clearly showed that Jacinto paid the cash paid a remittance fee of P40.00. consigning customer. For days following
advances and salary loan covered by the Inexplicably, however, no corresponding the overage, the respondent tried but A cashier’s inability to safeguard
clearance issued by the petitioner. entry was made to recognize the cash failed to reconcile her records, and for this and account for missing cash is sufficient
receipt of P540.00 in the computerized inept handling of a "Pera Padala" cause to dismiss her.
Lastly, the seven-month gap accounting system (operating system) of remittance, she already deserved to be
between the clearance incident and the the PJLI. sanctioned. The respondent insisted that she
April 17, 1997 memorandum asking the never intended to misappropriate the
petitioner to explain his action is too ISSUE: Can Velayo be terminated on the Further, as a matter of strict missing fund, but in Santos v. San Miguel
lengthy to be ignored. It likewise remains ground of loss of trust and confidence? company policy, unexplained cash is Corp., the Court held that misappropriation
uncontroverted that during such period, recognized at the end of the day as of company funds, notwithstanding that
respondent Jesus verbally terminated the HELD: Yes. In order that an employer miscellaneous income. Inexplicably, the shortage has been restituted, is a valid
petitioner only to recall the same and may invoke loss of trust and confidence in despite being with the company for four ground to terminate the services of an
instead ask the latter to tender a terminating an employee under Article years as accounting clerk and cashier, the employee for loss of trust and
resignation letter. When the petitioner 282(c) of the Labor Code, certain respondent failed to make the required confidence. Also, in Cañeda v. Philippine
Airlines, Inc., the Court held that it is that of the employee, the scales of justice obesity may not be unintended, but is
immaterial what the respondent’s intent FACTS: Farrales borrowed a helmet from must be tilted in favor of the latter. The nonetheless voluntary. As the CA correctly
was concerning the missing fund, for the his co-worker Eric Libutan ("Eric") since employer must affirmatively show puts it, "voluntariness basically means that
undisputed fact is that cash which she they reside in the same barangay. rationally adequate evidence that the the just cause is solely attributable to the
held in trust for the company was missing However, he got a wrong helmet as there dismissal was for a justifiable cause. employee without any external force
in her custody. At the very least, she was were many motorcycles with helmets in influencing or controlling his actions. This
negligent and failed to meet the degree of the parking area. When he learned that The Court agrees with the CA element runs through all just causes under
care and fidelity demanded of her as he made a mistake, he immediately that Farrales committed no serious or Article 282, whether they be in the nature
cashier. Her excuses and failure to give a phoned the HPC’s guard to report the willful misconduct or disobedience to of a wrongful action or omission. Gross
satisfactory explanation for the missing situation that he mistook the helmet which warrant his dismissal. It is not disputed and habitual neglect, a recognized just
cash only gave the petitioners sufficient he thought belonged to Eric. After several that Farrales lost no time in returning the cause, is considered voluntary although it
reason to lose confidence in her. As it was employees were asked as to the helmet to Reymar the moment he was lacks the element of intent found in Article
held in Metro Drug Corporation v. NLRC: ownership of the helmet, he finally found apprised of his mistake by Eric, which 282(a), (c), and (d)."
It would be most unfair to require an the owner thereof, which is Jun Reyes’s proves, according to the CA, that he was
employer to continue employing as its ("Jun") nephew, Reymar, who was with not possessed of a depravity of conduct as Heavylift Manila vs. CA & Galay, G.R.
cashier a person whom it reasonably him on November 27, 2009. Farrales would justify HPC’s claimed loss of trust in No. 154410, October 20, 2005,
believes is no longer capable of giving full promptly apologized to Jun and undertook him. Farrales immediately admitted his Quisumbing, J.
and whole hearted trustworthiness in the to return the helmet the following day and error to the company guard and sought
stewardship of company funds. explained that it was an honest mistake. help to find the owner of the yellow helmet, FACTS: Heavylift, a maritime agency, thru
and this, the appellate court said, only a letter signed by Josephine Evangelio,
ISSUE: Is the act of Farrales a ground for shows that Farrales did indeed mistakenly Administrative and Finance Manager of
1.4. Commission of crime [Art. his dismissal. think that the helmet he took belonged to Heavylift, informed Ma. Dottie Galay,
282(d)] Eric. Heavylift Insurance and Provisions
HELD: Yes. Theft committed by an Assistant, of her low performance rating
employee against a person other than his Yrasuegui vs. PAL, G.R. No. 168081, and the negative feedback from her team
employer, if proven by substantial October 17, 2008, Reyes, R.T., J. members regarding her work attitude. The
1.5. Analogous cases [Art. evidence, is a cause analogous to serious letter also notified her that she was being
282(e)] misconduct. Misconduct is improper or FACTS: Armando G. Yrasuegui was a relieved of her other functions except the
wrong conduct, it is the transgression of former international flight steward of development of the new Access program.
some established and definite rule of Philippine Airlines, Inc. (PAL). He stands ISSUE: Whether or not a valid ground
> Theft committed by an employee against action, a forbidden act, a dereliction of five feet and eight inches (5’8") with a exist to dismiss Galay.
a person other than his employer is duty, willful in character, and implies large body frame. The proper weight for a
analogous to serious misconduct. wrongful intent and not mere error in man of his height and body structure is HELD: None. An employee who cannot
(Hocheng Philippines vs. Farrales, G.R. judgment. The misconduct to be serious from 147 to 166 pounds, the ideal weight get along with his co-employees is
No. 211497, March 18, 2015, Reyes, J.) must be of such grave and aggravated being 166 pounds, as mandated by the detrimental to the company for he can
character and not merely trivial or Cabin and Crew Administration Manual of upset and strain the working environment.
> Obesity in the context of flight attendant. unimportant. Such misconduct, however PAL. Without the necessary teamwork and
(Yrasuegui vs. PAL, G.R. No. 168081, serious, must, nevertheless, be in synergy, the organization cannot function
October 17, 2008, Reyes, R.T., J.) connection with the employee’s work to ISSUE: Is failure to comply with the well. Thus, management has the
constitute just cause for his separation. weight standard a ground for dismissal? prerogative to take the necessary action to
> Attitude problem is analogous to loss of correct the situation and protect its
trust and confidence. (Heavylift Manila vs. But where there is no showing of HELD: Yes. In fine, We hold that the organization. When personal differences
CA & Galay, G.R. No. 154410, October a clear, valid and legal cause for obesity of petitioner, when placed in the between employees and management
20, 2005, Quisumbing, J.) termination of employment, the law context of his work as flight attendant, affect the work environment, the peace of
considers the case a matter of illegal becomes an analogous cause under the company is affected. Thus, an
Hocheng Philippines vs. Farrales, G.R. dismissal. If doubts exist between the Article 282(e) of the Labor Code that employee’s attitude problem is a valid
No. 211497, March 18, 2015, Reyes, J. evidence presented by the employer and justifies his dismissal from the service. His ground for his termination. It is a situation
analogous to loss of trust and confidence employer cannot be compelled to maintain Appeals found that petitioner did not refute He attempted to return to work after the
that must be duly proved by the employer. an employee who is remiss in fulfilling his the allegation that respondent, while in the dismissal of the Complaint so that
Similarly, compliance with the twin duties to the employer, particularly the custody of the police, suffered physical petitioner would not have any justifiable
requirement of notice and hearing must fundamental task of reporting to work. violence in the hands of its employees. reason to deny his request to resume his
also be proven by the employer. Thus, the Court of Appeals gave credence employment. Thus, respondent’s actions
In Agabon v. National Labor to the report submitted by Inspector showed that he intended to resume
However, we are not convinced Relations Commission, this court Escartin, which stated that respondent working for petitioner. The second element
that in the present case, petitioners have discussed the concept of abandonment: was "so traumatized that he actually asked of abandonment was not proven, as well.
shown sufficiently clear and convincing Abandonment is the deliberate and to remain in the custody of the police
evidence to justify Galay’s termination. unjustified refusal of an employee to because he feared for his life." The Court Calipay vs. NLRC, G.R. No. 166411,
Though they are correct in saying that in resume his employment. It is a form of of Appeals further found that respondent August 3, 2010, Peralta, J.
this case, proof beyond reasonable doubt neglect of duty, hence, a just cause for experienced intense fear, "manifest[ed] by
is not required, still there must be termination of employment by the the fact that he left the custody of the Doctrine. Abandonment is
substantial evidence to support the employer. For a valid finding of police only when his mother accompanied present in this case. In the instant case,
termination on the ground of attitude. The abandonment, these two factors should be him." petitioner Calipay had failed to report for
mere mention of negative feedback from present: (1) the failure to report for work or work for unknown reasons x x x His
her team members, and the letter dated absence without valid or justifiable reason; Thus, the intervening period continued absences without the private
February 23, 1999, are not proof of her and (2) a clear intention to sever when respondent failed to report for work, respondents’ approval constituted gross
attitude problem. Likewise, her failure to employer-employee relationship, with the from respondent’s prison release to the and habitual neglect which is a just cause
refute petitioners’ allegations of her second as the more determinative factor time he actually reported for work, was for termination under Article 282 of the
negative attitude does not amount to which is manifested by overt acts from justified. Since there was a justifiable Labor Code of the Philippines.
admission. Technical rules of procedure which it may be deduced that the reason for respondent’s absence, the first
are not binding in labor cases. Besides, employees has [sic] no more intention to element of abandonment was not Petitioner harps on the fact that
the burden of proof is not on the employee work. The intent to discontinue the established. on February 1, 2002, the NLRC issued a
but on the employer who must affirmatively employment must be shown by clear proof Resolution which was in his favor. While
show adequate evidence that the that it was deliberate and unjustified. The second element is the petitioner relies heavily on the said
dismissal was for justifiable cause. existence of overt acts which show that Resolution, he, however, always fails to
There is no abandonment in this the employee has no intention to return to mention that in a subsequent Resolution
case. work. Petitioner alleges that since dated September 24, 2002, the NLRC
1.6. Abandonment respondent "vanished" and failed to report reversed itself and reinstated the Decision
The first element of abandonment immediately to work, he clearly intended to of the Labor Arbiter dismissing the
Protective Maximum Security vs. is the failure of the employee to report to sever ties with petitioner. complaint filed by petitioner and his former
Fuentes, G.R. No. 169303, February 11, work without a valid and justifiable reason. co-employees.
2015, Leonen, J. Petitioner asserts that respondent failed to However, respondent reported for
report for work immediately after his work after August 15, 2001, when the Furthermore, petitioner insists
Doctrine. Abandonment as a release from prison. He also failed to criminal Complaint against him was that he is not guilty of abandoning his job
just cause for dismissal is based on Article abide by company procedure and report to dropped. Further, petitioner refused to and that his failure to report for work was
282(b) of the Labor Code i.e. gross and his immediate superior. According to allow respondent to resume his justified by his unceremonious dismissal
habitual neglect by the employee of his petitioner, respondent’s actions constitute employment because petitioner believed from employment.
duties. a failure to report to work without a valid that respondent was a member of the New
and justifiable reason. People’s Army and had already hired a However, the Labor Arbiter made
Abandonment constitutes a just replacement. the following categorical findings:
cause for dismissal because "the law in The National Labor Relations
protecting the rights of the laborer, Commission and the Court of Appeals Respondent’s act of reporting for Complainant Ernesto Dimalanta
authorizes neither oppression nor self- found that respondent’s failure to return to work after being cleared of the charges claimed that he was dismissed on January
destruction of the employer." The work was justified because of his detention against him showed that he had no 30, 1998. x x x Complainants Alfredo
and its adverse effects. The Court of intention to sever ties with his employer. Mission and Elpidio Calipay, for their part,
alleged that they were dismissed by the complainants after they were dismissed in supplies to be sold to ready buyers outside
respondents on May 25, 1998 and May accordance with law. 1.7. Totality of circumstances Meralco worksites.
27, 1998, respectively x x x. The record,
however, shows that complainants actually Jurisprudence has held time and MERALCO vs. Gana, G.R. No. 191288, The familiarity of the Meralco
reported for work and were paid wages by again that abandonment is totally March 7, 2012, Brion, J. crew with Llanes, a non-Meralco employee
the respondent company even after their inconsistent with the immediate filing of a who had been present in Meralco field
alleged termination as evidenced by their complaint for illegal dismissal, more so if Doctrine. Gala misses the point. operations, does not contradict at all but
Daily Time Records and Salary Vouchers the same is accompanied by a prayer for He forgets that as a probationary rather support the Meralco submission that
submitted by respondents. Complainant reinstatement. In the present case, employee, his overall job performance and there had been "reported pilferage" or
Mission worked with the respondent until however, petitioner filed his complaint his behavior were being monitored and "rampant theft," by the crew, of company
July 15, 1998, complainant Calipay up to more than one year after his alleged measured in accordance with the property even before May 25, 2006. Gala
November 2, 1998 while complainant termination from employment. Moreover, standards (i.e., the terms and conditions) downplays this particular point with the
Dimalanta until May 17, 1998. After those petitioner and the other complainants’ laid down in his probationary employment argument that the labor arbiter made no
dates, they absented themselves from inconsistency in their stand is also shown agreement. Under paragraph 8 of the such finding as she merely assumed it to
their work without any permission from the by the fact that in the complaint form which agreement, he was subject to strict be a fact, her only "basis" being the
management or without filing any leave of they personally filled up and filed with the compliance with, and non-violation of the statement that "may natanggap na balita
absence. Thus, two (2) written notices NLRC, they only asked for payment of Company Code on Employee Discipline, na ang mga crew na ito ay palagiang hindi
were sent to each complainant and the separation pay and other monetary claims. Safety Code, rules and regulations and nagsasauli ng mga electric facilities na
Department of Labor and Employment by They did not ask for reinstatement. It is existing policies. Par. 10 required him to kanilang ginagamit o pinapalitan bagkus
the respondent through its General only in their Position Paper later prepared observe at all times the highest degree of ito ay ibinenta palabas." Gala impugns the
Manager. by their counsel that they asked for transparency, selflessness and integrity in statement as hearsay. He also wonders
reinstatement. This is an indication that the performance of his duties and why Meralco’s supposed "video footage"
Calipay and the other petitioner and the other complainants responsibilities, free from any form of of the incident on May 25, 2006 was never
complainants failed to sufficiently refute never had the intention or desire to return conflict or contradicting with his own presented in evidence.
these findings of the Labor Arbiter in their to their jobs. In fact, there is no evidence personal interest.
appeal filed with the NLRC. They simply to prove that petitioner and his former co- The established fact that Llanes,
insisted that they did not report for work, employees ever attempted to return to The evidence on record a non-Meralco employee, was often seen
because they were already terminated. work after they were dismissed from established Gala’s presence in the during company operations, conversing
However, they did not present any employment. worksite where the pilferage of company with the foremen, for reason or reasons
evidence to prove their allegation. On the property happened. It also established that connected with the ongoing company
other hand, as held by the Labor Arbiter, On the other hand, private it was not only on May 25, 2006 that operations, gives rise to the question: what
private respondents were able to present respondents were able to present Llanes, the pilferer, had been seen during was he doing there? Apparently, he had
the DTRs and Salary Vouchers of Calipay memoranda or show-cause letters served a Meralco operation. He had been been visiting Meralco worksites, at least in
and the other complainants showing that on petitioner and the other complainants at previously noticed by Meralco employees, the Valenzuela Sector, not simply to
they indeed reported for work even after their last known address requiring them to including Gala (based on his socialize, but to do something else. As
their alleged termination from employment. explain their absence, with a warning that admission), in past operations. If Gala had testified to by witnesses, he was picking
Calipay and the other complainants also their failure would be construed as seen Llanes in earlier projects or up unused supplies and materials that
failed to present evidence to prove their abandonment of work. Also, private operations of the company, it is were not returned to the company. From
allegation that they were forced to sign respondents served on petitioner and the incredulous for him to say that he did not these factual premises, it is not hard to
blank forms of their DTRs and Salary other complainants a notice of termination know why Llanes was there or what conclude that this activity was for the
Vouchers. as required by law. Private respondents’ Zuñiga and Llanes were talking about. To mutual pecuniary benefit of himself and
compliance with said requirements, taken our mind, the Meralco crew (the foremen the crew who tolerated the practice. For
On the basis of the foregoing, the together with the other circumstances and the linemen) allowed or could have one working at the scene who had seen or
Court arrives at the conclusion that the above-discussed, only proves petitioner even asked Llanes to be there during their who had shown familiarity with Llanes (a
filing of the complaint for illegal dismissal and the other complainants’ abandonment operations for one and only purpose — to non-Meralco employee), not to have
appears only as a convenient afterthought of their work. serve as their conduit for pilfered company known the reason for his presence is to
on the part of petitioner and the other
disregard the obvious, or at least the very agreement, especially the requirement for them from service, we find no impropriety a regular employee in accordance with
suspicious. him "to observe at all times the highest in its act of imposing preventive reasonable standards made known by the
degree of transparency, selflessness and suspension upon the respondents since employer to the employee at the time of
We consider, too, and we find integrity in the performance of their duties the period did not exceed the maximum his engagement. An employee who is
credible the company submission that the and responsibilities." He failed to qualify as imposed by law and there was a valid allowed to work after a probationary period
Meralco crew who worked at the Pacheco a regular employee. purpose for the same. shall be considered a regular employee.
Subdivision in Valenzuela City on May 25,
2006 had not been returning unused As the Court explained in
supplies and materials, to the prejudice of 1.8. Preventive suspension 1.9. Termination of International Catholic Migration
the company. From all these, the allegedly probationary employee Commission, "the word ‘probationary,’ as
hearsay evidence that is not competent in Blue Sky Trading Co. vs. Blas, G.R. No. used to describe the period of
judicial proceedings (as noted above), 190559, March 7, 2012, Reyes, J. Canadian Opportunities Unlimited vs. employment, implies the purpose of the
takes on special meaning and relevance. Dalangin, Jr., G.R. No. 172223, February term or period, but not its length." Thus,
Doctrine. Blue Sky committed 6, 2012, Brion, J. the fact that Dalangin was separated from
With respect to the video footage no impropriety in imposing preventive the service after only about four weeks
of the May 25, 2006 incident, Gala himself suspension against Arlene and Joseph Doctrine. The essence of a does not necessarily mean that his
admitted that he viewed the tape during pending investigation of the theft probationary period of employment separation from the service is without
the administrative investigation, allegedly committed against the fundamentally lies in the purpose or basis.
particularly in connection with the company. objective of both the employer and the Contrary to the CA’s conclusions, we find
accusation against him that he allowed employee during the period. While the substantial evidence indicating that the
Llanes (binatilyong may kapansanan sa We, however, find no merit in the employer observes the fitness, propriety company was justified in terminating
bibig) to board the Meralco trucks. The challenge made by Arlene and Joseph and efficiency of a probationer to ascertain Dalangin’s employment, however brief it
choice of evidence belongs to a party and against the legality of the preventive whether he is qualified for permanent had been. Time and again, we have
the mere fact that the video was shown to suspension imposed by Blue Sky upon employment, the latter seeks to prove to emphasized that substantial evidence is
Gala indicates that the video was not an them pending the investigation of the the former that he has the qualifications to such relevant evidence as a reasonable
evidence that Meralco was trying to alleged theft. meet the reasonable standards for mind might accept as adequate to support
suppress. Gala could have, if he had permanent employment. a conclusion.
wanted to, served a subpoena for the In Mandapat v. Add Force
production of the video footage as Personnel Services, Inc., we explained The "trial period" or the length of Dalangin overlooks the fact,
evidence. The fact that he did not does not that preventive suspension may be legally time the probationary employee remains wittingly or unwittingly, that he offered
strengthen his case nor weaken the case imposed on an employee whose alleged on probation depends on the parties’ glimpses of his own behavior and
of Meralco. violation is the subject of an investigation. agreement, but it shall not exceed six (6) actuations during his four-week stay with
The purpose of the suspension is to months under Article 281 of the Labor the company; he betrayed his negative
On the whole, the totality of the prevent an employee from causing harm Code, unless it is covered by an attitude and regard for the company, his
circumstances obtaining in the case or injury to his colleagues and to the apprenticeship agreement stipulating a co-employees and his work.
convinces us that Gala could not but have employer. The maximum period of longer period. Article 281 provides:
knowledge of the pilferage of company suspension is 30 days, beyond which the Dalangin admitted in compulsory
electrical supplies on May 25, 2006; he employee should either be reinstated or be Probationary employment. — arbitration that the proximate cause for his
was complicit in its commission, if not by paid wages and benefits due to him. Probationary employment shall not exceed dismissal was his refusal to attend the
direct participation, certainly, by his six (6) months from the date the employee company’s "Values Formation Seminar"
inaction while it was being perpetrated and In Arlene and Joseph's case, started working, unless it is covered by an scheduled for October 27, 2001, a
by not reporting the incident to company Blue Sky issued to them notices to explain apprenticeship agreement stipulating a Saturday. He refused to attend the
authorities. Thus, we find substantial on February 3, 2005. They submitted their longer period. The services of an seminar after he learned that it had no
evidence to support the conclusion that written explanation the day after and they employee who has been engaged on a relation to his duties, as he claimed, and
Gala does not deserve to remain in were dismissed from service on February probationary basis may be terminated for that he had to leave at 2:00 p.m. because
Meralco’s employ as a regular employee. 5, 2005. While we do not agree with Blue a just cause or when he fails to qualify as he wanted to be with his family in the
He violated his probationary employment Sky's subsequent decision to terminate province. When Abad insisted that he
attend the seminar to encourage his co- that company managers be examples to and a similar program scheduled earlier, "closure or cessation of operation of an
employees to attend, he stood pat on not the rank and file employees. we find credence in the company’s establishment or undertaking not due to
attending, arguing that marked differences submission that Dalangin was unfit to serious business losses or reverses"
exist between their positions and duties, Additionally, very early in his continue as its Immigration and Legal under Article 283 of the Labor Code
and insinuating that he did not want to join employment, Dalangin exhibited negative Manager. As we stressed earlier, we are includes both the complete cessation of all
the other employees. He also questioned working habits, particularly with respect to convinced that the company had seen business operations and the cessation of
the scheduled 2:00 p.m. seminars on the one hour lunch break policy of the enough from Dalangin’s actuations, only part of a company's business.
Saturdays as they were not supposed to company and the observance of the behavior and deportment during a four- In Philippine Tobacco Flue-
be doing a company activity beyond 2:00 company’s working hours. Thus, Abad week period to realize that Dalangin would Curing & Redrying Corp. vs. NLRC, a
p.m. He considers 2:00 p.m. as the close stated that Dalangin would take prolonged be a liability rather than an asset to its company transferred its tobacco
of working hours on Saturdays; thus, lunch breaks or would go out of the office operations. processing plant in Balintawak, Quezon
holding them beyond 2:00 p.m. would be – without leave of the company – only to City to Candon, Ilocos Sur. The company
in violation of the law. call the personnel manager later to inform We, therefore, disagree with the therein did not actually close its entire
the latter that he would be unable to return CA that the company could not have fully business but merely relocated its tobacco
The "Values Formation Seminar" as he had to attend to personal matters. determined Dalangin’s performance barely processing and redrying operations to
incident is an eye-opener on the kind of Without expressly countering or denying one month into his employment. As we another place. Yet, this Court considered
person and employee Dalangin was. His Abad’s statement, Dalangin dismissed the said in International Catholic Migration the transfer as closure not due to serious
refusal to attend the seminar brings into charge for the company’s failure to Commission, the probationary term or business losses for which the workers are
focus and validates what was wrong with produce his daily time record. period denotes its purpose but not its entitled to separation pay.
him, as Abad narrated in her affidavit36 and length. To our mind, four weeks was
as reflected in the termination of The same thing is true with enough for the company to assess There is no doubt that petitioner
employment memorandum. It highlights Dalangin’s handling of Tecson’s Dalangin’s fitness for the job and he was has legitimate reason to relocate its plant
his lack of interest in familiarizing himself application for immigration to Canada, found wanting. In separating Dalangin because of the expiration of the lease
with the company’s objectives and especially his failure to find ways to appeal from the service before the situation got contract on the premises it occupied. That
policies. Significantly, the seminar involved the denial of Tecson’s application, as Abad worse, we find the company not liable for is its prerogative. But even though the
acquainting and updating the employees stated in her affidavit. Again, without illegal dismissal. transfer was due to a reason beyond its
with the company’s policies and expressly denying Abad’s statement or control, petitioner has to accord its
objectives. Had he attended the seminar, explaining exactly what he did with 2. Authorized Causes employees some relief in the form of
Dalangin could have broadened his Tecson’s application, Dalangin brushes (Art. 283, 284) severance pay. Thus,
awareness of the company’s policies, in aside Abad’s insinuation that he was not in E. Razon, Inc. vs. Secretary of Labor
addition to Abad’s briefing him about the doing his job well, with the ready argument 2.1. Retrenchment and Employment, petitioner therein
company’s policies on punctuality and that the company did not even bother to to prevent losses (Art. 283) provides arrastre services in all piers in
attendance, and the procedures to be present Tecson’s testimony. South Harbor, Manila, under a
followed in handling the clients’ a. Definition; management contract with the Philippine
applications. No wonder the company In the face of Abad’s direct Requisites; Relocation of business Ports Authority. Before the expiration of the
charged him with obstinacy. statements, as well as those of his co- term of the contract, the PPA cancelled the
employees, it is puzzling that Dalangin Cheniver Deco Print Technics vs. said contract resulting in the termination of
The incident also reveals chose to be silent about the charges, other NLRC, 325 SCRA 758, G.R. No. 122876, employment of workers engaged by
Dalangin’s lack of interest in establishing than saying that the company could not February 17, 2000, Quisumbing, J. petitioner. Obviously, the cancellation was
good working relationship with his co- cite any policy he violated. All along, he not sought, much less desired by
employees, especially the rank and file; he had been complaining that he was not Doctrine. Broadly speaking, petitioner. Nevertheless, this Court
did not want to join them because of his able to explain his side, yet from the labor there appears no complete dissolution of required petitioner therein to pay its
view that the seminar was not relevant to arbiter’s level, all the way to this Court, he petitioner's business undertaking but the workers separation pay in view of the
his position and duties. It also betrays an offered no satisfactory explanation of the relocation of petitioner's plant to Batangas, cessation of its arrastre operations.
arrogant and condescending attitude on charges. In this light, coupled with in our view, amounts to cessation of
his part towards his co-employees, and a Dalangin’s adamant refusal to attend the petitioner's business operations in Makati. Now, let it be noted that the
lack of support for the company objective company’s "Values Formation Seminar" It must be stressed that the phrase termination of employment by reason of
closure or cessation of business is length of service. Since the closure of losses, or when the company is about to business losses or reverses which are
authorized under Article 283 of the Labor petitioner's business is not on account of close or cease operations for causes not serious, actual and real."
Code which provides: serious business losses, petitioner shall due to business losses.
give private respondents separation pay There are substantive
Art. 283. Closure of equivalent to at least one (1) month or Nevertheless, as has also been requirements relating to the losses or
establishment and reduction of one-half (1/2) month pay for every year of emphasized in Andrada, the exercise of reverses that must underlie a
personnel. — The employer may service, whichever is higher. management prerogative is not absolute: retrenchment. That these losses are
terminate the employment of any serious relates to their gravity and that
employee due to the installation Am-Phil Food Concepts vs. Padilla, A company’s exercise of its they are actual and real relates to their
of labor saving devices, G.R. No. 188753, October 1, 2014, management prerogatives is not absolute. veracity and verifiability. Likewise, that a
redundancy, retrenchment to Leonen, J. It cannot exercise its prerogative in a retrenchment is anchored on serious,
prevent losses or the closing or cruel, repressive, or despotic manner. We actual, and real losses or reverses is to
cessation of operation of the Doctrine. In Sebuguero v. held in F.F. Marine Corp. v. NLRC: say that the retrenchment is done in good
establishment or undertaking National Labor Relations Commission, this faith and not merely as a veneer to
unless the closing is for the court explained the concept of This Court is not oblivious of the disguise the illicit termination of
purpose of circumventing the retrenchment as follows: significant role played by the corporate employees. Equally significant is an
provisions of this Title, by serving sector in the country’s economic and employer’s basis for determining who
a written notice on the workers Retrenchment . . . is used social progress. Implicit in turn in the among its employees shall be retrenched.
and the Ministry of Labor and interchangeably with the term "lay-off." It is success of the corporate form in doing Apart from these substantive requirements
Employment at least one (1) the termination of employment initiated by business is the ethos of business are the procedural requirements imposed
month before the intended date the employer through no fault of the autonomy which allows freedom of by Article 283 of the Labor Code.
thereof. In case of termination employee's and without prejudice to the business determination with minimal
due to the installation of labor latter, resorted to by management during governmental intrusion to ensure Thus, this court has outlined the
saving devices or redundancy, periods of business recession, industrial economic independence and development requirements for a valid retrenchment
the worker affected thereby shall depression, or seasonal fluctuations, or in terms defined by businessmen. Yet, this (2016 Bar), each of which must be shown
be entitled to a separation pay during lulls occasioned by lack of orders, vast expanse of management choices by clear and convincing evidence, as
equivalent to at least his one (1) shortage of materials, conversion of the cannot be an unbridled prerogative that follows:
month pay or at least one (1) plant for a new production program or the can rise above the constitutional protection
month pay for every year of introduction of new methods or more to labor. Employment is not merely a (1) that the retrenchment is
service, whichever is higher. In efficient machinery, or of automation. lifestyle choice to stave off boredom. reasonably necessary and
case of retrenchment to prevent Simply put, it is an act of the employer of Employment to the common man is his likely to prevent business
losses and in cases of closures dismissing employees because of losses very life and blood, which must be losses which, if already
or cessation of operations of in the operation of a business, lack of protected against concocted causes to incurred, are not merely de
establishment or undertaking not work, and considerable reduction on the legitimize an otherwise irregular minimis, but substantial,
due to serious business losses or volume of his business, a right consistently termination of employment. Imagined or serious, actual and real, or if
financial reverses, the separation recognized and affirmed by this Court. undocumented business losses present only expected, are reasonably
pay shall be equivalent to one (1) the least propitious scenario to justify imminent as perceived
month pay or at least one-half As correctly pointed out by Am- retrenchment. objectively and in good faith by
(1/2) month pay for every year of Phil, retrenchment entails an exercise of the employer;
service, whichever is higher. A management prerogative. In Andrada v. Thus, retrenchment has been
fraction of at least six (6) months National Labor Relations Commission, this described as "a measure of last resort (2) that the employer served
shall be considered one (1) whole court stated: when other less drastic means have been written notice both to the
year. tried and found to be inadequate." employees and to the
Retrenchment is an exercise of Department of Labor and
Consequently, petitioner herein management’s prerogative to terminate Retrenchment is, therefore, not a Employment at least one
must pay his employees their termination the employment of its employees en tool to be wielded and used nonchalantly. month prior to the intended
pay in the amount corresponding to their masse, to either minimize or prevent To justify retrenchment, it "must be due to date of retrenchment;
 evidence to sustain the substantive ground into" the portion of the budget allocated for the personnel expenses for the elementary
(3) that the employer pays the on which the supposed validity of Padilla’s capital and administrative development, and high school departments were "eating
retrenched employees retrenchment rests. and faced further with the demands of the into" the portion of its budget allocated for
separation pay equivalent to employees of additional increase in other purposes. There could be no
one month pay or at least ½ Moreover, it is admitted that Am- salaries and benefits, it had "no choice" practical basis from which the
month pay for every year of Phil did not serve a written notice to the but to close down. respondent’s claim finds support. Aside
service, whichever is higher; Department of Labor and Employment one from this, the respondent failed to present
(1) month before the intended date of The burden of proving that the any proof establishing how the continued
(4) that the employer exercises Padilla’s retrenchment, as required by termination of services is for a valid or operations of the elementary and high
its prerogative to retrench Article 283 of the Labor Code. authorized cause rests upon the school departments has become
employees in good faith for the employer. In termination by retrenchment, impracticable. The respondent merely
advancement of its interest While it is true that Am-Phil gave not every loss incurred or expected to be assumed, which the NLRC and CA
and not to defeat or circumvent Padilla separation pay, compliance with incurred by an employer can justify improperly sustained, that "[f]aced with the
the employees’ right to none but one (1) of the many requisites for retrenchment. The employer must prove, intractable demands of complainant Union
security of tenure; and a valid retrenchment does not absolve Am- among others, that the losses are for additional increases in salaries and
Phil of liability. substantial and that the retrenchment is economic benefits, with the steady decline
(5) that the employer used fair reasonably necessary to avert such in enrolment and the increase in overhead
and reasonable criteria in Mount Carmel Employees Union vs. losses. In this case, while the respondent expenses, respondent had no choice but
ascertaining who would be Mount Carmel, G.R. No. 187621, may have presented its Financial to close down the two departments and
dismissed and who would be September 24, 2014, Reyes, J. Statements, the respondent, nevertheless, make do with the College Department x x
retained among the employees, failed to establish with reasonable x." There is nothing on record showing
such as status (i.e., whether Doctrine. Retrenchment, as an certainty that the proportion of its revenues how the respondent came up with such
they are temporary, casual, authorized cause for the dismissal of are largely expended for its elementary conclusion, save for the alleged decline in
regular or managerial employees, finds basis in Article 283. and high school personnel salaries, wages its elementary and high school enrolment,
employees), efficiency, and other benefits. Its Financial and no feasibility studies, analysis, or at
seniority, physical fitness, age, In the present case, the Statements30 showed the following the very least, an academic projection was
and financial hardship for respondent’s justification for implementing presented to validate its "forecast." Note
certain workers. the retrenchment of the petitioners was
figures, among others: that the Financial Statements show that
due to the alleged closure or cessation of the respondent was not operating at a loss
1997 1998
Am-Phil failed to establish its elementary and high school but actually had surplus, albeit at a
compliance with the requisites for a valid departments. According to them, the minimum. Thus, it has been held that –
retrenchment. continued operations of these departments 10,529,810.39 12,603,283.12
was an exercise of management 6,273,646.00 7,199,859.58 Not every loss incurred or
Am-Phil’s 2001 to 2004 audited prerogative to protect its business and it expected to be incurred by a company will
financial statements, the sole proof upon was no longer viable to maintain the two 405,091.76 769,460.93 justify retrenchment. The losses must be
which Am-Phil relies on to establish its departments as it was already being substantial and the retrenchment must be
claim that it suffered business losses, have subsidized by the college department. As reasonably necessary to avert such
The Financial Statements pertain
been deemed unworthy of consideration. proof thereof, the respondent submitted its losses. The employer bears the burden of
to its assets, liabilities, gross revenues and
These audited financial statements were audited Financial Statements for the years proving the existence or the imminence of
expenses for the entire college system,
mere annexes to the motion for leave to 1997, 1998 and 1999. Respondent also substantial losses with clear and
that is, from elementary, high school to the
admit supplemental rejoinder which Labor alleged that such closure was recognized satisfactory evidence that there are
college department. The expenses for the
Arbiter Chuanico validly disregarded. No by the "Tuition Fee Law," which mandates legitimate business reasons justifying a
elementary and high school departments
credible explanation was offered as to why that 70% of the tuition incremental retrenchment. Should the employer fail to
were not set out in detail and instead,
these statements were not presented proceeds should be allocated for salaries, do so, the dismissal shall be deemed
were lumped together with the college
when the evidence-in-chief was being wages and other benefits of its personnel. unjustified.
department. Such detail becomes material
considered by the labor arbiter. It follows Respondent claimed that in its case,
in the light of the respondent’s claim that
that there is no clear and convincing personnel benefits are already "eating
 The respondent, likewise, cannot the allocation provided by law is applicable seasonal fluctuations, or during lulls (c) the retrenchment is reasonably
rely on the alleged condition in the Tuition in the respondent’s situation, the bare fact occasioned by lack of orders, shortage of necessary and is likely to be effective in
Fee Law that "70% of tuition incremental that the expenses allotted for the salaries, materials, conversion of the plant for a preventing the expected losses; and (d)
proceeds should be allocated for the wages and benefits of the respondent’s new production program or the the alleged losses, if already incurred, or
payment of salaries, wages and other personnel exceeded the minimum introduction of new methods or more the expected imminent losses sought to be
benefits of the school’s academic and non- allocation, without more, does not efficient machinery, or of automation. It is a forestalled are proven by sufficient and
academic personnel." In the first place, the constitute reasonable justification for the management prerogative resorted to by an convincing evidence.
Tuition Fee Law alluded to by the closure of its elementary and high school employer to avoid or minimize business
respondent refers to R.A. No. 6728, as departments, and the retrenchment of the losses which is consistently recognized by The Court has previously ruled
amended or the "Government Assistance petitioners. The respondent must establish the Court. that financial statements audited by
to Students and Teachers in Private by substantial and convincing evidence independent external auditors constitute
Education Act." Section 5 of R.A. No. 6728 that the impending losses it expected to Under Article 283, in order that the normal method of proof of the profit
allows the increase in tuition fees in incur, based on such allocation, were retrenchment due to serious business and loss performance of a company
private educational institutions and imminent and that the retrenchment it losses may be validly exercised, the (Possible Bar Problem).
provides for the allocation of the conducted was necessary to prevent such following requisites must concur: (a)
increment, to wit: losses. Another factor that militates necessity of the retrenchment to prevent In this case, to prove that the
against the respondent’s reason was that it losses, and proof of such losses; (b) company incurred losses, the petitioners
(2) Assistance under paragraph re-opened after two years, due to the written notice to the employees and to the presented its audited financial statements
(1), subparagraphs (a) and (b) shall be "clamor" for its re-opening. This is contrary DOLE at least one (1) month prior to the for the corporate fiscal years 1996 to
granted and tuition fees under to the respondent’s "perceived" impending intended date of retrenchment; and (c) 1998 and emphasized that, in the October
subparagraph (c) may be increased, on loss considering that there was actually a payment of separation pay equivalent to 20, 1998 Audit Report prepared by SGV &
the condition that seventy percent (70%) demand for its educational services. While one (1) month pay or at least one-half Co., the auditing firm declared that
of the amount subsidized allotted for enrolment may have declined, the Court is (1/2) month pay for every year of service, petitioner PT&T incurred a substantial loss
tuition fee or of the tuition fee increases not convinced that the closure of the whichever is higher. of about P558 million for the fiscal year
shall go to the payment of salaries, wages, elementary and high school departments ending June 30, 1998, resulting to a total
allowances and other benefits of teaching was a reasonable necessity, especially in Under the first requisite, it is deficit of about P574 million as of the
and non-teaching personnel x x x and may the absence of any showing on the part of imperative and incumbent on the part of same date; and that petitioner PT&T even
be used to cover increases as provided for the respondent that it explored other less the employer to sufficiently and negotiated with its creditors for the
in the collective bargaining agreements drastic and/or cost-saving measures to convincingly establish business reverses suspension of payments of its outstanding
existing or in force at the time when this avoid serious financial or economic of the kind or in the amount that would balances until the completion of an
Act is approved and made effective: x x x problems. justify retrenchment. To justify acceptable restructuring plan.
At least twenty percent (20%) shall go to retrenchment, the employer must prove Based on the financial
the improvement or modernization of serious business losses, as not all statements submitted, petitioner PT&T
buildings, equipment, libraries, b. Proof business losses suffered by an employer suffered a net loss of P40,780,017 in
laboratories, gymnasia and similar required would justify retrenchment under the 1995 and P85,423,641 in 1996, posted a
facilities and to the payment of other costs aforesaid Article 283. The loss referred to net income of P1,491,532 in 1997, and
of operation. x x x. PT & T vs. NLRC, 456 SCRA 264, G.R. in the said provision cannot be of just any again suffered a net loss of P557,892,627
No. 147002, April 15, 2005, Callejo, Sr., kind or amount, otherwise, a company in 1998. The foregoing clearly indicates
The 70% allocation presupposes J. could easily feign excuses to suit its whims that the petitioner PT&T sufficiently
an increase in a school’s tuition fee, which and prejudices or to rid itself of unwanted complied with its burden to prove that it
was not established in this Doctrine. Retrenchment has employees. As consistently held by this incurred substantial losses as to warrant
case. Moreover, the Court has already been defined as the termination of Court, to guard against abuse, any claim the exercise of the extreme measure of
ruled that the 70% allocation set by law is employment initiated by the employer of actual or potential business losses must retrenchment to prevent the company from
only the minimum, and not the maximum through no fault of the employees and satisfy the following established standards, totally going under.
percentage, and there is actually a 10% without prejudice to the latter, resorted by to wit; (a) the losses incurred are
portion the disposition of which the law management during periods of business substantial and not de minimis; (b) the While an employer may have a
does not regulate.36Even assuming that recession, industrial depression, or losses are actual or reasonably imminent; valid ground for implementing a
retrenchment program, it is not excused of Labor and Employment (DOLE) is planned retrenchment is justified and
from complying with the required written The petitioners’ adherence to the mandatory and must be written and given adequately supported by facts.
notice served both to the employee above pronouncement of the Court is at least one month before the intended
concerned and the DOLE at least one misplaced. The particular issue involved in date of retrenchment. In this case, it is Interestingly enough, the
month prior to the intended date of the said decision was the duration of the undisputed that the petitioners were given evidence on record indicates that
retrenchment. The purpose of this period of temporary lay-off, and not the notice of the temporary lay-off. There is, respondents Bayao and Castillo were not
requirement is not only to give employees compliance with the one month notice however, no evidence that any written merely temporarily laid-off. The October
some time to prepare for the eventual loss requirement. Reading the entire paragraph notice to permanently retrench them was 26, 1998 Letter of Del Rosario addressed
of their jobs and their corresponding of the quoted portion of the decision would given at least one month prior to the date to the respondents clearly stated that the
income, look for other employment and readily show what it was referring to, thus: of the intended retrenchment. The NLRC latter were to be considered separated
ease the impact of the loss of their This provision, however, speaks of a found that GTI conveyed to the petitioners from the company effective August 31,
jobs but also to give the DOLE the permanent retrenchment as opposed to a the impossibility of recalling them due to 1998 and that they were each being
opportunity to ascertain the verity of the temporary lay-off as is the case here. the continued unavailability of work. But extended a separation package. In the
alleged cause of termination. There is no specific provision of law which what the law requires is a written notice to said letter, Del Rosario even showed signs
treats of a temporary retrenchment or lay- the employees concerned and that of consoling the respondents stating that:
In the case at bar, the off and provides for the requisites in requirement is mandatory. The notice must "It really pains us to separate you from the
memorandum of Del Rosario, the vice- effecting it or a period or duration therefor. also be given at least one month in company but it is a necessary measure we
president of the COG, to respondents These employees cannot forever be advance of the intended date of have to take to ensure the survival of the
Bayao and Castillo informing the latter that temporarily laid-off. To remedy this retrenchment to enable the employees to company."
they were included in the TSRP to be situation or fill the hiatus, Article 286 may look for other means of employment and
implemented effective September 1, 1998 be applied but only by analogy to set a therefore to ease the impact of the loss of It must be stressed, however, that
was dated August 21, 1998. The said specific period that employees may remain their jobs and the corresponding income. compliance with the one-month notice rule
memorandum was received by Castillo on temporarily laid-off or in floating status. Six That they were already on temporary lay- is mandatory regardless of whether the
August 24, 1998 and Bayao on August 26, months is the period set by law that the off at the time notice should have been retrenchment is temporary or permanent.
1998. The respondents had barely two operation of a business or undertaking given to them is not an excuse to forego This is so because Article 283 itself does
weeks’ notice of the intended may be suspended thereby suspending the one-month written notice because by not speak of temporary or permanent
retrenchment program. Clearly then, the the employment of the employees this time, their lay-off is to become retrenchment; hence, there is no need to
one-month notice rule was not complied concerned. The temporary lay-off wherein permanent and they were definitely losing qualify the term. Ubi lex non distinguit nec
with. At the same time, the petitioners the employees likewise cease to work their employment. nos distinguere debemus (when the law
never showed that any notice of the should also not last longer than six does not distinguish, we must not
retrenchment was sent to the DOLE. months. After six months, the employees The Court further emphasized distinguish).
should either be recalled to work or therein that – There is also nothing in the
The petitioners insist that the permanently retrenched following the records to prove that a written notice was However, the employer’s failure
one-month notice requirement does not requirements of the law, and that failing to ever given to the DOLE as required by to comply with the one month notice
apply in this situation, as the retrenchment comply with this would be tantamount to law. GTI's position paper, offer of exhibits, requirement prior to retrenchment does
involved was merely temporary and not dismissing the employees and the Comment to the Petition, and not render the termination illegal; it merely
permanent. They aver that this has been employer would thus be liable for such Memorandum in this case do not mention renders the same defective, entitling the
recognized by this Court, and dismissal. of any such written notice. The law dismissed employee to payment of
quote Sebuguero v. NLRC in this manner: requires two notices ― one to the indemnity in the form of nominal
Article 283 speaks of a permanent Nowhere can it be found employee/s concerned and another to the damages. Based on prevailing
retrenchment as opposed to a temporary in Sebuguero that the one month notice DOLE ― not just one. The notice to the jurisprudence, the amount of indemnity is
lay-off as is the case here. There is no may be dispensed with. On the contrary, DOLE is essential because the right to pegged at P30,000.00.
specific provision of law which treats of the Court, speaking through now Chief retrench is not an absolute prerogative of
a temporary retrenchment or lay-off Justice Hilario G. Davide, Jr., emphasized an employer but is subject to the Finally, since petitioner PT&T was
and provides for the requisites in the mandatory nature of the said notice, to requirement of law that retrenchment be able to establish that it incurred serious
effecting it or a period or duration wit: The requirement of notice to both the done to prevent losses. The DOLE is the business losses, justifying the
therefor. employees concerned and the Department agency that will determine whether the retrenchment, the final requisite is the
payment of separation pay. Pursuant to between the parties, if there be any. Short act of management in this regard must be
Section 283 of the Labor Code, as of any of these conditions, management sustained. While it may be true that the The NLRC correctly held that
amended, the retrenchment having been policy to pursue and terminate its Liberty Flour Mills Group of Companies as private respondents did not violate the
effected due to serious business losses, employees allegedly to avert losses, must a whole posted a net income of P83.3 LIFO rule under Section 2, Article III of the
respondents Bayao and Castillo are each fail. Million, it is admitted that with respect to CBA which provides:
entitled to one month pay or to at least operations of the meat processing and
one-half month pay for every year of In subject case, the 66 livestock which were undertaken by herein Sec. 2. LIFO RULE. In
service, whichever is higher. A fraction of complaining employees were separated companies sustained losses in the sum of all cases of lay-off or
at least six months shall be considered from service as a result of the decision of P2,257,649.88. This is the reason, as retrenchment resulting
one whole year. management to limit its operations and advanced by management, for its decision in termination of
streamline positions and personnel to streamline positions resulting in the employment in the line
c. Standards requirements. reduction of manpower complement. of work, the
to be observed Last-in-First-Out (LIFO)
In the case of Maya Farms, Inc. In Abbott Laboratories (Phils.) Rule must always be
Maya Farms Employees Organization its meat processing department, prior to Inc. vs. NLRC, we had occasion to uphold strictly observed.
vs. NLRC, 239 SCRA 508, G.R. No. the adoption of special redundancy the employer in its exercise of what are
106256, December 28, 1994, Kapunan, program had four (4) sections each of clearly management prerogatives, thus: It is not disputed that the LIFO
J. which is headed by an assistant The hiring, firing, transfer, demotion, and rule applies to termination of employment
superintendent. These 3 sections are: (a) promotion of employees has been in the line of work. Verily, what is
Doctrine. The termination of the meat processing; (b) slaughterhouse; (c) traditionally, identified as a management contemplated in the LIFO rule is that when
sixty-six employees was done in packing. With the implementation of the prerogative subject to limitations found in there are two or more employees
accordance with Article 283 of the Labor decision of management to limit meat law, a collective bargaining agreement or occupying the same position in the
Code. The basis for this was the processing with sausages as the only general principles of fair play and justice. company affected by the retrenchment
companies' study to streamline operations output, only one position for assistant This is a function associated with the program, the last one employed will
so as to make them more viable. Positions superintendent was retained that of Asst. employer's inherent right to control and necessarily be the first to go.
which overlapped each other, or which are Superintendent for meat processing held manage effectively its enterprise. Even as
in excess of the requirements of the by Lydia Bandong. Likewise, positions of the law is solicitous of the welfare of the Moreover, the reason why there
service, were declared redundant. slicer/seater operator, debonner/skinner, employees, it must also protect the right of was no violation of the LIFO rule was
ham and bacon operative, were scrapped. an employer to exercise what are clearly amply explained by public respondent in
We fully agree with the findings Similarly, positions for packers were management prerogatives. The free will of this wise: . . . . The LIFO rule under the
and conclusions of the public respondent decreased retaining only five positions out management to conduct its own business CBA is explicit. It is ordained that in cases
on the issue of termination, to wit: of 21 packers. Also affected were the affairs to achieve its purpose cannot be of retrenchment resulting in termination of
positions of egg sorters/stockers as only 4 denied. employment in line of work, the employee
We sustain the companies' positions were retained out of ten (10) who was employed on the latest date must
prerogative to adopt the alleged positions. The rule is well-settled that labor be the first one to go. The provision
redundancy/retrenchment program to laws discourage interference with an speaks of termination in the line of work.
minimize if not, to avert losses in the A close examination of the employer's judgment in the conduct of his This contemplates a situation where
conduct of its operations. This has been positions retained by management show business. Even as the law is solicitous of employees occupying the same position in
recognized in a line of cases. However, that said positions such as egg sorter, the welfare of employees, it must also the company are to be affected by the
the companies' decision on this matter is debonner were but the minimal positions protect the right of an employer to exercise retrenchment program. Since there ought
not absolute. The basis for such an action required to sustain the limited what are clearly management to be a reduction in the number of
must be far from being whimsical and the functions/operations of the meat prerogatives. As long as the company's personnel in such positions, the length of
same must be proved by substantial processing department. In the absence of exercise of the same is in good faith to service of each employees is the
evidence. In addition, the implementation any evidence to prove bad faith on the part advance its interest and not for the determining factor, such that the employee
of such a decision or policy must be in of management in arriving at such purpose of defeating or circumventing the who has a longer period of employment
accordance with existing laws, rules and decision, which records on hand failed to rights of employees under the laws or valid will be retained.
procedure and provisions of the CBA show in instant case, the rationality of the agreements, such exercise will be upheld.
 In the case under consideration, the same substituted with separation pay the offer. Both Rivera and Macaspac reasonable criteria must be used, such as
specifically with respect to Maya Farms, by private respondents. As found by public requested evidence of the company's but not limited to: (a) less preferred status
several positions were affected by the respondent, written notices of separation financial setback but petitioners failed to (e.g., temporary employee), (b) efficiency,
special involuntary redundancy program. were sent to the employees on January furnish them any. Rivera's working days and (c) seniority. The records disclose that
These are packers, egg sorters/stockers, 17, 1992. The notices expressly stated were further reduced from three (3) to two no criterion whatsoever was adopted by
drivers. In the case of packers, prior to the that the termination of employment was to (2) days a week. Insisting on the petitioners in dismissing Rivera and
involuntary redundancy program, take effect one month from receipt thereof. redundancy of the positions of Rivera and Macaspac. Another procedural lapse
twenty-one employees occupied the Therefore, the allegation that separation Macaspac, petitioners finally dismissed committed by petitioners is the lack of
position of packers. Out of this number, pay was given in lieu of the 30-day notice them on 14 August 1992. written notice to the DOLE required under
only 5 were retained. In this group of required by law is baseless. Art. 283 of the Labor Code. The purpose
employees, the earliest date of The circumstances recounted by of such notice is to ascertain the verity of
employment was October 27, 1969, and Golden Thread Knitting vs. NLRC, 304 Rivera and Macaspac were considered by the cause of termination of employment.
the latest packer was employed in 1989. SCRA 568, G.R. No. 119157, March 11, the NLRC to have cast serious doubt on
1999, Bellosillo, J. the validity and propriety of their Quite related to the alleged
The case of Roberta Cabrera and termination. Moreover, the NLRC found drastic reduction of their volume of work,
Lydia C. Bandong, Asst. Superintendent Doctrine. As regards Gilbert that their dismissal was not reported by petitioners further contended in the
for packing and Asst. Superintendent for Rivera and Mary Ann Macaspac, petitioner petitioners to the Department of Labor and proceedings below that they resorted to
meat processing respectively was claim that they were constrained to trim Employment (DOLE) as required by law. rotation of employees due to the low
presented by the union as an instance down the number of their artists in the demand for their products. But respondent
where the LIFO rule was not observed by Design Section from five (5) to two (2) is a Again, we agree with respondent NLRC was not persuaded since other than
management. The union pointed out that consequence of the drastic reduction of NLRC. The characterization of an petitioners' bare contention, they miserably
Lydia Bandong who was retained by their volume of work, and Rivera and employee's services as no longer failed to support it with concrete evidence.
management was employed on a much Macaspac were among the three (3) necessary or sustainable, and therefore
later date than Roberta Cabrera, and both employees dismissed for redundancy. properly terminable, is an exercise of 4. Substantial loss
are Assistant Superintendent. We cannot business judgment on the part of the
sustain the union's argument. It is indeed Rivera and Macaspac assail the employer. The wisdom or soundness of GJT Builders vs. Ambos, G.R. No.
true that Roberta Cabrera was employed alleged redundancy as the events that such characterization or decision is not 174184, January 28, 2015, Leonen, J.
earlier (January 28, 1961) and (sic) Lydia transpired prior to their termination proved subject to discretionary review on the part
Bandong (July 9, 1966). However, it is otherwise. According to Rivera, on 27 July of the Labor Arbiter nor the NLRC Doctrine. Serious business
maintained that in meat processing 1992 he was dismissed on account provided, of course, that violation of law or losses are substantial losses, not de
department there were 3 Asst. allegedly of poor revenues and was in fact arbitrary or malicious action is not minimis. "Losses" means that the business
Superintendents assigned as head of the offered separation pay, which he refused. shown. In the instant case, we question must have operated at a loss for a period
3 sections thereat. The reason advanced He further said that the following day he petitioners' exercise of management of time for the employer "to [have]
by the company in retaining Bandong was was dismissed, he sent a letter to prerogative because it was not shown that perceived objectively and in good
that as Asst. Superintendent for meat petitioners Ng and Bico protesting his Rivera and Macaspac's positions were faith" that the business’ financial standing
processing she could "already take care of dismissal, claiming that he had not done indeed unnecessary, much less was is unlikely to improve in the future.
the operations of the other sections." The anything wrong to them nor to the petitioners' claim supported by any
nature of work of each assistant company. Further still, Rivera claimed that evidence. It is not enough for a company The burden of proving serious
superintendent as well as experience were on 4 August 1992 he was advised by to merely declare that it has become business losses is with the employer. The
taken into account by management. Such petitioner Ng to report for work overmanned. It must produce adequate employer must show losses on the basis
criteria was not shown to be whimsical nor immediately, although upon his return he proof that such is the actual situation in of financial statements covering a
capricious. was again offered separation pay but order to justify the dismissal of the affected sufficient period of time. The period
opted instead to continue working. employees for redundancy. covered must be sufficient for the National
Finally, contrary to petitioners' Labor Relations Commission and this
contention, there is nothing on record to On her part, Macaspac claims Furthermore, we have laid down court to appreciate the nature and
show that the 30-day notice of termination that she was also offered separation pay the principle that in selecting the vagaries of the business.
to the workers was disregarded and that on the same ground but she also rejected employees to be dismissed, a fair and
 The financial statement G.J.T. of the Structural Steel Division were On the contrary, we find that during periods of business recession,
Rebuilders submitted in evidence covers severed from employment. petitioner implemented its retrenchment industrial depression, or seasonal
the fiscal years 1996 and 1997. Based on Respondent, in any of the program in good faith because it fluctuations, and during lulls in production
the financial statement, G.J.T. Rebuilders pleadings filed by him, never refuted the undertook several measures in cutting occasioned by lack of orders, shortage of
earned a net income of 61,157.00 in 1996 foregoing facts. Respondent’s argument down its costs, to wit, withdrawing certain materials, conversion of the plant for a
and incurred a net loss of 316,210.00 in that he was singled out for termination as privileges of petitioner’s executives and new production program, or introduction of
1997. allegedly shown in petitioner’s monthly expatriates; limiting the grant of additional new methods or more efficient machinery
termination report for the month of July monetary benefits to managerial or automation. It is a valid management
We find the two-year period 1997 filed with the DOLE does not employees and cutting down expenses; prerogative, provided it is done in good
covered by the financial statement persuade this Court. Standing alone, this selling of company vehicles; and infusing faith and the employer faithfully complies
insufficient for G.J.T. Rebuilders to have document is not proof of the total number fresh capital into the company. with the substantive and procedural
objectively perceived that the business of retrenched employees or that Respondent did not attempt to refute that requirements laid down by law and
would not recover from the loss. Unlike in respondent was the only one retrenched. It petitioner adopted these measures before jurisprudence.
North Davao Mining Corporation, merely serves as notice to DOLE of the implementing its retrenchment program.
Manatad, and LVN Pictures Employees names of employees terminated/ In the case at bar, despite the
and Workers Association (NLU), no retrenched only for the month of July. In In fine, we hold that petitioner fact that respondent was employed by
continuing pattern of loss within a sufficient other words, it cannot be deemed as an was able to prove that it incurred Petrocon as an OFW in Saudi Arabia, still
period of time is present in this case. In evidence of the number of employees substantial business losses, that it offered both he and his employer are subject to
fact, in one of the two fiscal years covered affected by the retrenchment program. to pay respondent his separation pay, that the provisions of the Labor Code when
by the financial statement presented in Thus we cannot conclude that no other the retrenchment scheme was arrived at in applicable. The basic policy in this
evidence, G.J.T. Rebuilders earned a net employees were previously retrenched. good faith, and lastly, that the criteria or jurisdiction is that all Filipino workers,
income. We, therefore, agree with the standard used in selecting the employees whether employed locally or overseas,
Labor Arbiter and the Court of Appeals that Respondent then claimed that to be retrenched was work efficiency which enjoy the protective mantle of Philippine
G.J.T. Rebuilders closed its machine shop petitioner did not observe seniority in passed the test of fairness and labor and social legislations. In the case
to prevent losses, not because of serious retrenching him. He further alleged that he reasonableness. of Royal Crown Internationale v.
business losses. is more qualified and efficient than those NLRC, this Court has made the policy
retained by petitioner. Notably, however, a. pronouncement, thus: x x x. Whether
Shimizu Phils. vs. Callanta, G.R. No. the records do not bear any proof that Retrenchment of OFW employed locally or overseas, all Filipino
165923, September 29, 2010, Del these allegations were substantiated. On workers enjoy the protective mantle of
Castillo, J. the contrary, the Labor Arbiter found International Mgt. vs. Logarta, G.R. No. Philippine labor and social legislation,
respondent’s notoriety due to pieces of 163657, April 18, 2012, Peralta, J. contract stipulations to the contrary
Doctrine. In implementing its evidence showing numerous company notwithstanding. This pronouncement is in
retrenchment scheme, petitioner was violations imputed against respondent. Doctrine. Retrenchment is the keeping with the basic public policy of the
constrained to streamline its operations This fact of being subject of several reduction of work personnel usually due to State to afford protection to labor, promote
and to downsize its complements in a administrative investigations, respondent poor financial returns, aimed to cut down full employment, ensure equal work
progressive manner in order not to failed to refute. Moreover, the Labor costs for operation particularly on salaries opportunities regardless of sex, race or
jeopardize the completion of its projects. Arbiter likewise found respondent guilty of and wages. It is one of the economic creed, and regulate the relations between
Thus, several departments like the Civil several misrepresentations in the grounds to dismiss employees and is workers and employers. x x x
Works Division, Electro-mechanical Works pleadings filed before the tribunal with resorted by an employer primarily to avoid
Division and the Territorial Project regard to the latter’s employment position. or minimize business losses. Philippine Law recognizes
Management Offices, among others, were By advancing that other employees were retrenchment as a valid cause for the
abolished in the early part of 1996 and less efficient, qualified and senior than Retrenchment programs are dismissal of a migrant or overseas Filipino
thereafter the Structural Steel Division, of him, respondent has the burden of proving purely business decisions within the worker under Article 283 of the Labor
which respondent was an Administrator. these allegations which he failed to purview of a valid and reasonable exercise Code.
Respondent was among the last batch of discharge. of management prerogative. It is one way
employees who were retrenched and by of downsizing an employer’s workforce Applying the above-stated
the end of year 1997, all of the employees and is often resorted to by the employer requisites for a valid retrenchment (see
the requisites in the case digest of Am- workers even those without projects is As to seniority, at the time the Being a mere decision of the NLRC, it
Phil Food Concepts vs. Padilla) in the tantamount to oppression. "The notice of termination was given to him, could not be considered as a precedent
case at bar, it is apparent that the first, determination to cease operation is a Logarta’s employment was eight (8) warranting its application in the case at
fourth and fifth requirements were prerogative of management which the months, clearly, he has not accumulated bar. Suffice it to state that although Article
complied with by respondent’s employer. state does not usually interfere with as no sufficient years to claim seniority. 8 of the Civil Code recognizes judicial
However, the second and third requisites business or undertaking must be required decisions, applying or interpreting statutes
were absent when Petrocon terminated to continue at a loss simply because it has As to proof of claimed financial as part of the legal system of the country,
the services of respondent. to maintain its employees in employment. losses, the NLRC itself has recognized the such level of recognition is not afforded to
Such an act would be tantamount to a drastic reduction of Petrocon’s work administrative decisions.
As aptly found by the NLRC and taking of property without due process of allocation, thereby necessitating the
justly sustained by the CA, Petrocon law. retrenchment of some of its employees. Anent the proper amount of
exercised its prerogative to retrench its separation pay to be paid to respondent,
employees in good faith and the As to complying with the fifth As for the notice requirement, petitioner maintains that respondent was
considerable reduction of work allotments requirement, the CA was correct when it however, contrary to petitioner’s paid the appropriate amount as separation
of Petrocon by Saudi Aramco was ruled that: As to the fifth requirement, the contention, proper notice to the DOLE pay. However, a perusal of his Payroll
sufficient basis for Petrocon to reduce the NLRC considered the following criteria fair within 30 days prior to the intended date of Check Details, clearly reveals that what he
number of its personnel, thus: Moreover, and reasonable in ascertaining who would retrenchment is necessary and must be received was his compensation for the
from the standard form of employment be dismissed and who would be retained complied with despite the fact that month prior to his departure, and hence,
contract relied upon by the Labor Arbiter, it among the employees; (i) less preferred respondent is an overseas Filipino worker. was justly due to him as his salary.
is clear that unilateral cancellation (sic) status; (ii) efficiency rating; (iii) seniority; In the present case, although respondent Furthermore, the amounts which he
may be effected for "legal, just and valid and (iv) proof of claimed financial losses. was duly notified of his termination by received as his "End of Contract Benefit"
cause or causes." Clearly, contrary to the Petrocon 30 days before its effectivity, no and "Other Earning/Allowances: for July
Labor Arbiter’s perception, the enumerated The primary reason for allegation or proof was advanced by 1998" form part of his wages/salary, as
causes for employment termination by the respondent’s termination is lack of work petitioner to establish that Petrocon ever such, cannot be considered as constituting
employer in the standard form of project specifically related to his expertise sent a notice to the DOLE 30 days before his separation pay.
employment contract is not exclusive in as piping designer. Due to the highly the respondent was terminated. Thus, this
the same manner that the listed grounds specialized nature of Logarta’s job, we find requirement of the law was not complied Verily, respondent is entitled to
for termination by the employer is not that the availability of work and number of with. the payment of his separation pay.
exclusive. As pointed out above, under allocated man-hours for pipeline projects However, this Court disagrees with the
Sec. 10 of RA 8042, it is clear that are sufficient and reasonable criteria in Also, petitioner’s contention that conclusion of the Labor Arbiter, the NLRC
termination of employment may be for just, determining who would be dismissed and respondent freely consented to his and the CA, that respondent should be
valid or authorized cause as defined by who would be retained among the dismissal is unsupported by substantial paid his separation pay in accordance with
law or contract. Retrenchment being employees. Consequently, we find the evidence. Respondent’s recourse of the provision of Section 10 of R.A. No.
indubitably a legal and authorized cause criterion of less preferred status and finding a new employer during the 30-day 8042. A plain reading of the said provision
may be availed of by the respondent. efficiency rating not applicable. period prior to the effectivity of his clearly reveals that it applies only to an
dismissal and eventual return to the illegally dismissed overseas contract
From the records, it is clearly The list of terminated employees Philippines is but logical and reasonable worker or a worker dismissed from
shown that there was a drastic reduction in submitted by Petrocon, shows that other under the circumstances. Faced with the overseas employment without just, valid or
Petrocon’s 1998 work allocation from employees, with the same designation as eventuality of his termination from authorized cause.
250,000 man-hours to only 80,000 man- Logarta’s (Piping Designer II), were also employment, it is understandable for
hours. Under these circumstances over dismissed. Terminated, too, were respondent to seize the opportunity to 2.2. Closure of
which respondent’s principal, Petrocon employees designated as Piping Designer seek for other employment and continue Business (Art. 283)
had no control, it was clearly a valid I and Piping Designer. Hence, employees working in Saudi Arabia.
exercise of management prerogative to whose job designation involves pipeline North Davao Mining vs. NLRC, 254
reduce personnel particularly those works were without bias terminated. Moreover, petitioner’s insistence SCRA 721, G.R. No. 112546 March 13,
without projects to work on. To force that the case of Jariol v. IMS should be 1996, Panganiban, J.
Petrocon to continue maintaining all its applied in the present case is untenable.
 “Indeed, one cannot squeeze This Court ruled that "there was This could not be said of BISSI. In the that, should have elicited admiration
blood out of a dry stone. Nor water out impermissible discrimination against the case of North Davao, it gave 30-days' instead of condemnation. But to require it
of parched land” private respondents in the payment of their separation pay to its employees when it to continue being generous when it is no
separation benefits. The law requires an was still a going concern even if it was longer in a position to do so would
Doctrine. Where, however, the employer to extend equal treatment to its already losing heavily. As a going concern, certainly be unduly oppressive, unfair and
closure was due to business losses — as employees. It may not, in the guise of its cash flow could still have sustained the most revolting to the conscience. As this
in the instant case, in which the aggregate exercising management prerogatives, payment of such separation benefits. But Court held in Manila Trading & Supply
losses amounted to over P20 billion — the grant greater benefits to some and less to when a business enterprise completely Co. vs. Zulueta, and reiterated in San
Labor Code does not impose any others. . . ." ceases operations, i.e., upon its death as Miguel Corporation vs. NLRC and later,
obligation upon the employer to pay a going business concern, its vital lifeblood in Allied Banking Corporation
separation benefits, for obvious reasons. In resolving the present case, it — its cashflow — literally dries up. vs. Castro, "(t)he law, in protecting the
There is no need to belabor this point. bears keeping in mind at the outset that Therefore, the fact that less separation rights of the laborer, authorizes neither
Even the public respondents, in their the factual circumstances of BISSI are benefits ware granted when the company oppression nor self-destruction of the
Comment filed by the Solicitor General, quite different from the current case. The finally met its business death cannot be employer."
impliedly concede this point. Court noted that BISSI continued to suffer characterized as discrimination. Such
losses even after the retrenchment of the action was dictated not by a discriminatory At this juncture, we note that the
However, respondents first batch of employees: clearly, business management option but by its complete Solicitor General in his Comment
tenaciously insist on the award of did not improve despite such drastic inability to continue its business life due to challenges the petitioners' assertion that
separation pay, anchoring their claim measure. That notwithstanding, when accumulated losses. Indeed, one cannot North Davao, having closed down, no
solely on petitioner North Davao's long- BISSI finally shut down, it could well afford squeeze blood out of a dry stone. Nor longer has the means to pay for the
standing policy of giving separation pay to (and actually did) pay off its remaining water out of parched land. benefits. The Solicitor General stresses
benefits equivalent to 30-days' pay, which employees with MORE separation benefits that North Davao was among the assets
policy had been in force in the years prior as compared with those earlier laid off; As already stated, Art. 283 of the transferred by PNB to the national
to its closure. Respondents contend that, obviously, then, there was no reason for Labor Code does not obligate an employer government, and that by virtue of
by denying the same separation benefits BISSI to skimp on separation pay for the to pay separation benefits when the Proclamation No. 50 dated December 8,
to private respondent and the others first batch of discharged employees. That closure is due to losses. In the case before 1986, the APT was constituted trustee of
similarly situated, petitioners discriminated it was able to pay one-month separation us, the basis for the claim of the additional this government asset. He then concludes
against them. They rely on this Court's benefit for employees at the time of separation benefit of 17.5 days is alleged that "(i)t would, therefore, be incongruous
ruling in Businessday Information Systems closure of its business meant that it must discrimination, i.e., unequal treatment of to declare that the National Government,
and Services, Inc. (BISSI) vs. NLRC, have been also in a position to pay the employees, which is proscribed as an which should always be presumed to be
(supra). In said case, petitioner BISSI, same amount to those who were unfair labor practice by Art. 248 (e) of said solvent, could not pay now private
after experiencing financial reverses, separated prior to closure. That it did not Code. Under the facts and circumstances respondents' money claims." Such
decided "as a retrenchment measure" to do so was a wrongful exercise of of the present case, the grant of a lesser argumentation is completely misplaced.
lay-off some employees on May 16, 1988 management prerogatives. That is why the amount of separation pay to private Even if the national government owned or
and gave them separation pay equivalent Court correctly faulted it with respondent was done, not by reason of controlled 81.8% of the common stock and
to one-half (1/2) month pay for every year "impermissible discrimination." Clearly, it discrimination, but rather, out of sheer 100% of the preferred stock of North
of service. BISSI retained some exercised its management prerogatives financial bankruptcy — a fact that is not Davao, it remains only a stockholder
employees in an attempt to rehabilitate its contrary to "general principles of fair play controlled by management prerogatives. thereof, and under existing laws and
business as a trading company. However, and justice." Stated differently, the total cessation of prevailing jurisprudence, a stockholder as
barely two and a half months later, these operation due to mind-boggling losses was a rule is not directly, individually and/or
remaining employees were likewise In the instant case however, the a supervening fact that prevented the personally liable for the indebtedness of
discharged because the company decided company's practice of giving one month's company from continuing to grant the the corporation. The obligation of North
to cease business operations altogether. pay for every year of service could no more generous amount of separation pay. Davao cannot be considered the obligation
Unlike the earlier terminated employees, longer be continued precisely because the The fact that North Davao at the point of of the national government, hence,
the second batch received separation pay company could not afford it anymore. It its forced closure voluntarily paid any whether the latter be solvent or not is not
equivalent to a full month's salary for every was forced to close down on account of separation benefits at all — although not material to the instant case. The
year of service, plus a mid-year bonus. accumulated losses of over P20 billion. required by law — and 12.5-days worth at respondents have not shown that this case
constitutes one of the instances where the separation benefits irrespective of the without any fault attributable to them realties, machineries and assets in
corporate veil may be pierced. From employer’s financial position, then the separation benefits at the rate of 19 days Extrajudicial Foreclosure Case No. EJF-
another angle, the national government is obligatory force of that contract prevails for every year of service. This is 2773-CEB;
not the employer of private respondent and its terms should be carried out to its particularly found in Section 1, Article VIII
and his co-complainants, so there is no full effect. Verily, it is fundamental that of the same contract, to wit: Benson even admits in its
reason to expect any kind of bailout by the obligations arising from contracts have the Comment that it was already saddled with
national government under existing law force of law between the contracting Section 1. Separation Pay – The loan from banks as early as 1997 and that
and jurisprudence. parties and thus should be complied with Company shall pay to any it had been unable to service its loan
in good faith; and parties are bound by the employee/laborer who is terminated from obligations. And yet, nothing appears on
Benson Industries Employees Union stipulations, clauses, terms and conditions the service without any fault attributable to record to discount the fact that it still
vs. Benson Employees, G.R. No. they have agreed to, the only limitation him, a "Separation Pay" equivalent to not unqualifiedly and freely agreed to the
200746, August 6, 2014, Perlas- being that these stipulations, clauses, less than nineteen (19) days’ pay for every separation pay provision in the July 1,
Bernabe, J. (*Possible Bar Problem) terms and conditions are not contrary to year of service based upon the latest rate 2005 to June 30, 2010 CBA, its distressed
law, morals, public order or public of pay of the employee/laborer concerned. financial condition notwithstanding.
*This case differs from North policy. Hence, if the terms of a CBA are
Davao Mining vs. NLRC because in the clear and there is no doubt as to the As may be gleaned from the Thus, in view of the foregoing,
latter, company practice is the source of intention of the contracting parties, the following whereas clauses in a the Court disagrees with the CA in
company’s obligation to give separation literal meaning of its stipulations shall Memorandum of Agreement dated negating Benson’s obligation to pay
pay. In this case, the source of the prevail. As enunciated in Honda Phils., November 20, 2003 between the parties, petitioners their full separation benefits
obligation is the CBA. Inc. v. Samahan ng Malayang Benson had been fully aware of its under the said agreement. The postulation
Manggagawa sa Honda: distressed financial condition even at the that Benson had closed its establishment
Doctrine. When the obligation to time of the previous CBA (effective from and ceased operations due to serious
pay separation benefits, however, is not A collective bargaining July 1, 2000 to June 30, 2005): business losses cannot be accepted as an
sourced from law (particularly, Article 297 agreement refers to the negotiated excuse to clear itself of any liability since
of the Labor Code), but from contract between a legitimate labor WHEREAS, on February 01, the ground of serious business losses is
contract, such as an existing collective organization and the employer concerning 2001 the Company and the Union entered not, unlike Article 297 of the Labor Code,
bargaining agreement between the wages, hours of work and all other terms into a Collective Bargaining Agreement considered as an exculpatory parameter
employer and its employees, an and conditions of employment in a (CBA) with effectivity from July 01, 2000 to under the aforementioned CBA. Clearly,
examination of the latter’s provisions bargaining unit. As in all contracts, the June 30, 2005; Benson, with full knowledge of its financial
becomes necessary in order to determine parties in a CBA may establish such xxxx situation, freely and voluntarily entered
the governing parameters for the said stipulations, clauses, terms and conditions WHEREAS, the Company and into such agreement with petitioners.
obligation. To reiterate, an employer which as they may deem convenient provided the Union recognize that the Philippines is Hence, having failed to show that the
closes shop due to serious business these are not contrary to law, morals, good at present in grave economic crisis; subject CBA provision on separation
losses is exempt from paying separation customs, public order or public policy. benefits is contrary to law, morals, public
benefits under Article 297 of the Labor Thus, where the CBA is clear and WHEREAS, the Union order or public policy, or that the same can
Code for the reason that the said provision unambiguous, it becomes the law between recognizes and acknowledges that the be interpreted as one with a condition – for
explicitly requires the same only when the the parties and compliance therewith is Company in particular is in grave financial instance, that the parties actually
closure is not due to serious business mandated by the express policy of the law. difficulties and that the Company is hard contemplated non-payment of separation
losses; conversely, the obligation is up to meet its financial obligations to benefits in the event of closure due to
maintained when the employer’s closure is In this case, it is undisputed that creditor banks that said creditor banks serious business losses – the Court is
not due to serious business losses. For a a CBA was forged by the employer, have even threatened to foreclose the constrained to reinstate the October 24,
similar exemption to obtain against a Benson, and its employees, through the mortgages on and to seize the Company’s 2008 VA Decision ordering Benson to pay
contract, such as a CBA, the tenor of the Union, to govern their relations effective factory, realties, machineries and assets each of the petitioners separation benefits
parties’ agreement ought to be similar to July 1, 2005 to June 30, 2010. It is equally and in fact, the Bank of the Philippine in "an amount equivalent to four (4) days
the law’s tenor. When the parties, undisputed that Benson agreed to and Islands, one of the creditor banks for every year of service based on the
however, agree to deviate therefrom, and was thus obligated under the CBA to pay scheduled on November 17, 1998 a latest rate of pay of the [individual
unqualifiedly covenant the payment of its employees who had been terminated foreclosure sale of the Company’s factory, petitioner] concerned, subject to whatever
legally valid deductions chargeable the case of Industrial Timber Corporation Although the NLRC did not substantial and the retrenchment must be
against [said individual petitioner], v. NLRC: expound on the matter, it is readily reasonably necessary to avert such
whenever applicable." apparent that the supposed lay-off of losses. Settled is the rule that the
Closure or [suspension] of Lopez was hardly justified considering the employer bears the burden of proving this
All given, business losses are a operations for economic reasons is, absence of any causal relation between allegation of the existence or imminence of
feeble ground for petitioner to repudiate its therefore, recognized as a valid exercise the cessation of Irvine's project in Cavite substantial losses, which by its nature is
obligation under the CBA. The rule is of management prerogative. The with the suspension of Lopez's work. To an affirmative defense. It is the duty of the
settled that any benefit and supplement determination to cease [or suspend] repeat, Lopez is a regular and not a employer to prove with clear and
being enjoyed by the employees cannot operations is a prerogative of project employee. Hence, the continuation satisfactory evidence that legitimate
be reduced, diminished, discontinued or management, which the State does not of his engagement with Irvine, either in business reasons exist to justify
eliminated by the employer. The principle usually interfere with, as no business or Cavite, or possibly, in any of its business retrenchment. Failure to do so "inevitably
of non-diminution of benefits is founded on undertaking [is] required to continue locations, should not have been affected results in a finding that the dismissal is
the constitutional mandate to protect the operating at a loss simply because it has by the culmination of the Cavite project unjustified." And the determination of
rights of workers and to promote their to maintain its workers in employment. alone. In light of the well-entrenched rule whether an employer has sufficiently and
welfare and to afford labor full protection. Such an act would be tantamount to a that the burden to prove the validity and successfully discharged this burden of
taking of property without due process of legality of the termination of employment proof "is essentially a question of fact for
Hence, absent any proof that law. falls on the employer, Irvine should have the Labor Arbiter and the NLRC to
petitioner’s consent was vitiated by fraud, established the bona fide suspension of its determine."
mistake or duress, it is presumed that it In the case at bar, Irvine asserts business operations or undertaking that
entered into the CBA voluntarily and had that it only temporarily laid-off Lopez from would have resulted in the temporary lay- Otherwise, such ground for
full knowledge of the contents thereof and work on December 27, 2005 for the off of its employees for a period not termination would be susceptible to abuse
was aware of its commitments under the reason that its project in Cavite had exceeding six (6) months in accordance by scheming employers who might be
contract. already been finished. To support its claim, with Article 286 of the Labor Code. As merely feigning business losses or
it submitted the following pieces of enunciated in Nasipit Lumber Co. v. reverses in their business ventures to
a. Cessation evidence: (a) a copy of an Establishment National Organization of Workingmen ease out employees.
of business operations Termination Report evidencing Lopez's (NOWM), citing Somerville Stainless Steel
lay-off; (b) a copy of the return to work Corporation v. NLRC: In this case, Irvine failed to prove
Lopez vs. Irvine Construction, G.R. No. order dated June 5, 2006; and (c) an compliance with the parameters of Article
207253, August 20, 2014, Perlas- affidavit from Irvine's personnel manager, [T]he burden of proving, with 286 of the Labor Code. As the records
Bernabe, J. Aguinaldo Santos, which purports that said sufficient and convincing evidence, that would show, it merely completed one of its
return to work order was sent to Lopez by such closure or suspension is bona fide numerous construction projects which
Doctrine. Notably, in both a ordinary mail on June 5, 2006. The CA falls upon the employer. As we ruled in does not, by and of itself, amount to a
permanent and temporary lay-off, gave credence to the foregoing and thus Somerville Stainless Steel Corporation v. bonafide suspension of business
jurisprudence dictates that the one-month granted Irvine's certiorari petition against NLRC: operations or undertaking. In invoking
notice rule to both the DOLE and the the NLRC ruling which affirmed the LA's Article 286 of the Labor Code, the
employee under Article 283 of the Labor finding of illegal dismissal. Considering the severe paramount consideration should be the
Code is mandatory. Also, in both cases, consequences occasioned by dire exigency of the business of the
the lay-off, being an exercise of the The CA is mistaken. As the retrenchment on the livelihood of the employer that compels it to put some of its
employer's management prerogative, must NLRC correctly ruled in this case, Lopez, employee(s) to be dismissed, and the employees temporarily out of work. This
be exercised in good faith - that is, one who, as earlier discussed was a regular avowed policy of the State - under Sec. 3, means that the employer should be able to
which is intended for the advancement of employee of Irvine, was not merely Art. XIII of the Constitution, and Art. 3 of prove that it is faced with a clear and
employers' interest and not for the purpose temporarily laid off from work but was the Labor Code - to afford full protection to compelling economic reason which
of defeating or circumventing the rights of terminated from his employment without labor and to assure the employee's right to reasonably forces it to temporarily shut
the employees under special laws or any valid cause therefor; thus, the proper enjoy security of tenure, the Court down its business operations or a
under valid agreements. Instructive on the disposition is to affirm the LA's ruling that reiterates that "not every loss incurred or particular undertaking, incidentally
nature of a lay-off as a management Lopez had been illegally dismissed. expected to be incurred by a company will resulting to the temporary lay-off of its
prerogative is the following excerpt from justify retrenchment. The losses must be employees.
 assignment. Absent any dire exigency the business operations as a valid ground respondents, although they were no longer
Due to the grim economic justifying their failure to give respondent for the termination of an overseas rendering any service or doing any work,
consequences to the employee, case law further assignment, the only logical employment. This recognition is subject to still received their full salary for November
states that the employer should also bear conclusion is that respondent was compliance with the following requisites: 2004 up to January 2005. In fact, from
the burden of proving that there are no constructively dismissed. February 2005 until they were repatriated
posts available to which the employee 1. The decision to close or to the Philippines in May 2005, the
temporarily out of work can be The same can be said of the cease operations must be bona respondents still received wages, albeit
assigned. Thus, in the case of Mobile employee in this case as no evidence was fide in character; half of their respective basic monthly
Protective & Detective Agency v. submitted by Irvine to show any dire salary rate. Had Van Doorn intended to
Ompad, the Court found that the security exigency which rendered it incapable of 2. Service of written notice on stop its fishing operations simply to
guards therein were constructively assigning Lopez to any of its projects. Add the affected employees and on terminate the respondents’ employment, it
dismissed considering that their employer to this the fact that Irvine did not proffer the Department of Labor and would have immediately repatriated the
was not able to show any dire exigency any sufficient justification for singling out Employment (DOLE) at least respondents to the Philippines soon after,
justifying the latter's failure to give said Lopez for lay-off among its other three one (1) month prior to the in order that it may hire other seafarers to
employees any further assignment, viz.: hundred employees, thereby casting a effectivity of the termination; replace them – a possibility that did not
cloud of doubt on Irvine's good faith in and take place.
[Article 286 of the Labor Code] pursuing this course of action. Verily, Irvine
has been applied by analogy to security cannot conveniently suspend the work of 3. Payment to the affected Considering therefore the
guards in a security agency who are any of its employees in the guise of a employees of termination or absence of any indication that Van Doorn
placed "off detail" or on "floating" status. In temporary lay-off when it has not shown separation pay equivalent to stopped its fishing operations to
security agency parlance, to be placed "off compliance with the legal parameters one (1) month pay or at least circumvent the protected rights of the
detail" or on "floating" status means under Article 286 of the Labor Code. With one-half (1/2) month pay for respondents, our courts have no basis to
"waiting to be posted." Pursuant to Article Irvine failing to prove such compliance, the every year of service, question the reason that might have
286 of the Labor Code, to be put off detail resulting legal conclusion is that Lopez whichever is higher. impelled Van Doorn to reach its closure
or in floating status requires no less than had been constructively dismissed; and decision.
the dire exigency of the employer's bona since the same was effected without any We are sufficiently convinced,
fide suspension of operation, business or valid cause and due process, the NLRC based on the records, that Van Doorn’s Manila Mining Corp. vs. Amor, G.R. No.
undertaking. In security services, this properly affirmed the LA's ruling that termination of the respondents’ 182800, April 20, 2015, Perez, J.
happens when there is a surplus of Lopez's dismissal was illegal. employment arising from the cessation of
security guards over available its fishing operations complied with the Doctrine. Without necessarily
assignments as when the clients that do Poseidon International vs. Tamala, G.R. above requisites and is thus valid. resulting to a termination of employment,
not renew their contracts with the security No. 186475, Brion, J. an employer may at any rate, bona fide
agency are more than those clients that do We observe that the records of suspend the operation of its business for a
and the new ones that the agency gets. Doctrine. Art. 283 of the Labor the case do not show that Van Doorn ever period of not exceeding six months under
Code applies in the present case as under intended to defeat the respondents’ rights Article 286 of the Labor Code. While the
Again, petitioners only alleged the contract the employer and the workers under our labor laws when it undertook its employer is, on the one hand, duty bound
that respondent's last assignment was with signed and submitted to the Philippine decision to close its fishing operations on to reinstate his employees to their former
VVCC for the period of September 29 to Overseas Employment Agency (POEA), November 20, 2004. From this date until positions without loss of seniority rights if
October 31, 1997. He was not given the Philippine labor law expressly applies. six months after, the undertaking was at a the operation of the business is resumed
further assignment as he allegedly went complete halt. That Van Doorn and its within six months, employment is deemed
on AWOL and lost interest to work. As This legal reality is reiterated partners might have suffered losses during terminated where the suspension exceeds
explained, these claims are unconvincing. under Section 18-B, paragraph 2, in the six-month period is not entirely remote. said period. Not having resumed its
Worse still, they are inadequate under the relation with Section 23 of the POEA Yet, Van Doorn did not immediately operations within six months from the time
law. The records do not show that there Standard Employment Contract (POEA- repatriate the respondents or hire another it suspended its operations on 27 July
was a lack of available post after October SEC) (which is deemed written into every group of seafarers to replace the 2001, it necessarily follows that petitioner
1997. It appears that petitioners simply overseas employment contract) which respondents in a move to resume its is liable to pay respondents’ separation
stopped giving respondent any recognizes the validity of the cessation of fishing operations. Quite the opposite, the pay computed at one (1) month pay or at
least one-half (1/2) month pay for every proof that the cessation of or withdrawal investigation and termination of petitioner in order to achieve the results it desires. To
year of service, whichever is higher, as from business operations was bona fide in on grounds of dishonesty, loss of prove that Villanueva’s functions are
well as the damages and attorney’s fees character. A written notice to the DOLE confidence and abandonment of work, redundant, SPI submitted an Inter-Office
adjudicated by the Labor Arbiter. Without thirty days before the intended date of clearly appears as an afterthought as it Memorandum and affidavit executed by its
proof of the serious business losses it closure is also required, the purpose of was done only after petitioner had filed an Human Resources Director, Villanueva.
allegedly sustained and/or compliance which is to inform the employees of the illegal dismissal case and respondents The pertinent portions of the memorandum
with the reportorial requirements under specific date of termination or closure of have been summoned for hearing before read:
Article 283 of the Labor Code, petitioner business operations, and which must be the LA.
cannot expediently plead exemption from served upon each and every employee of ORGANIZATION STRUCTURE
said liabilities due to the supposed the company one month before the date of 2.3. Redundancy (Art.
financial reverses which led to the effectivity to give them sufficient time to 283) One of the most important
eventual closure of its business. It is make the necessary arrangement. elements of successfully effecting change
essentially required that the alleged losses > Redundancy, for purposes of our Labor is to create an organization structure that
in business operations must be proven for, The ultimate test of the validity of Code, exists where the services of an is streamlined, clear and efficient. We think
otherwise, said ground for termination closure or cessation of establishment or employee are in excess of what is we have done that and the new format is
would be susceptible to abuse by undertaking is that it must be bona fide in reasonably demanded by the actual illustrated in Attachment A. The upper part
scheming employers who might be merely character. And the burden of proving such requirements of the enterprise. (Wiltshire shows my direct reports who are heads of
feigning business losses or reverses in falls upon the employer. After evaluating File Co. vs. NLRC, 193 SCRA 665, the various shared services departments
their business ventures in order to ease the evidence on record, we uphold the February 7, 1991, Feliciano, J.) and the lower part shows the set up of the
out employees. The condition of business factual findings and conclusions of the business units. The important features of
losses justifying retrenchment is normally labor tribunals that petitioner was > Private respondent PRC had no valid the structure are discussed in the following
shown by audited financial documents like dismissed without just or authorized and acceptable basis to declare the sections. For brevity, I have purposely not
yearly balance sheets and profit and loss cause, and that the announced cessation position of Pollution Control and Safety summarized the roles that will remain the
statements as well as annual income tax of business operations was a subterfuge Manager redundant as the same may not same.
returns which were not presented in this for getting rid of petitioner. While the be considered as superfluous; by the
case. introduction of additional evidence before express mandate of the provisions earlier xxxx
the NLRC is not proscribed, the said cited, said positions are required by Corporate Development
Manarpiis vs. Texan Philippines, G.R. tribunal was still not persuaded by the law. (Escareal vs. NLRC, 213 SCRA 472,
No. 197011, January 28, 2015, Villarama, company closure purportedly averted only G.R. No. 99359, September 2, 1992, Peter Maquera will continue to
J. by the alleged fresh funding procured by Davide, Jr., J.) head Corporate Development but the
respondent Tan, for the latter claim group’s scope will be expanded to include
Doctrine. Closure or cessation remained unsubstantiated. The CA’s > In contracting the services of Gemac Marketing across the whole company.
of business is the complete or partial finding of serious business losses is not Machineries, as part of the company's Essentially, Marketing will be taken out of
cessation of the operations and/or shut- borne by the evidence on record. The cost-saving program, the services the business units and centralized under
down of the establishment of the financial statements supposedly bearing rendered by the mechanics became Corporate Development. Elizabeth Nolan
employer. It is carried out to either stave the stamp mark of BIR were not signed by redundant and superfluous, and therefore will move from her role as Publishing’s VP
off the financial ruin or promote the an independent auditor. Besides, the non- properly terminable. (De Ocampo vs. of Sales and Marketing to become the
business interest of the employer. Closure compliance with the requirements under NLRC, 213 SCRA 652, G.R. No. 101539, head of Global Marketing. The unit will
of business as an authorized cause for Article 283 of the Labor Code, as September 4, 1992, Medialdea, J.) continue to focus on strengthening the SPI
termination of employment is governed by amended, gains relevance in this case not brand, while at the same time maximizing
Article 283 of the Labor Code, as for the purpose of proving the illegality of SPI Technologies vs. Mapua, G.R. No. the effectiveness of our spending. Josie
amended. the company closure or cessation of 191154, April 7, 2014, Reyes, J. Gonzales, head of Corporate Relations,
business, which did not materialize, but as will also be transitioned to Corporate
If the business closure is due to an indication of bad faith on the part of Doctrine. Moving on to the issue Development.
serious losses or financial reverses, the respondents in hastily terminating of the validity of redundancy program, SPI
employer must present sufficient proof of petitioner’s employment. Under the asserted that an employer has the The memorandum made no
its actual or imminent losses; it must show circumstances, the subsequent unbridled right to conduct its own business mention that the position of the Corporate
Development Manager or any other Also connected with the evidence clarified why she is not qualified for that redundancy because it was shown that
position would be abolished or deemed negating redundancy was SPI’s position. In fact, Mapua brought up the after declaring the employee’s position of
redundant. In this regard, may the affidavit publication of job vacancies after Mapua subject of transfer to Villanueva and Raina Senior Accounting Analyst as redundant,
of Villanueva which enumerated the was terminated from employment. SPI several times prior to her termination but the company opened other accounting
various functions of a Corporate maintained that the CA erred when it to no avail. There was even no showing positions (Terminal Accountant and
Development Manager being performed considered Mapua’s self-serving affidavit that Mapua could not perform the duties of Internal Auditor) for hiring. There was no
by other SPI employees be considered as as regards the Prime Manpower a Marketing Communications Manager. showing that the private respondent
sufficient proof to uphold SPI’s redundancy advertisement because the allegations therein could not perform the functions
program? therein were based on Mapua’s unfounded Therefore, even though the CA demanded of the vacant positions, to
suspicions. Also, the failure of Mapua to based its ruling only on the Prime which he could be transferred to instead of
In AMA Computer College, Inc. v. present a sworn statement of Dimatulac Manpower advertisement coupled with the being dismissed.
Garcia, et al., the Court held that the renders the former’s statements hearsay. purported disclosure to Mapua, the Court
presentation of the new table of the holds that the confluence of other factors Wiltshire File Co. vs. NLRC, 193 SCRA
organization and the certification of the Even if we disregard Mapua’s supports the said ruling. 665, February 7, 1991, Feliciano, J.
Human Resources Supervisor that the affidavit as regards the Prime Manpower
positions occupied by the retrenched advertisement, SPI admitted that it caused The Court does not agree with Doctrine. Turning to the legality
employees are redundant are inadequate the Inquirer advertisement for a Marketing the rationalization of the NLRC that "[i]f it of the termination of private respondent's
as evidence to support the college’s Communications Manager were true that her position was not employment, we find merit in petitioner's
redundancy program. The Court quotes position. Mapua alleged that this redundant and indispensable, then the basic argument. We are unable to sustain
the related portion of its ruling: advertisement belied the claim of SPI that company must have already hired a new public respondent NLRC's holding that
her position is redundant because the one to replace her in order not to private respondent's dismissal was not
In the case at bar, ACC Corporate Development division was only jeopardize its business operations. The justified by redundancy and hence illegal.
attempted to establish its streamlining renamed to Marketing division. fact that there is none only proves that her In the first place, we note that while the
program by presenting its new table of Instead of explaining how the functions of position was not necessary and therefore letter informing private respondent of the
organization. ACC also submitted a a Marketing Communications Manager superfluous." termination of his services used the word
certification by its Human Resources differ from a Corporate Development "redundant", that letter also referred to the
Supervisor, Ma. Jazmin Reginaldo, that Manager, SPI hardly disputed Mapua What the above reasoning of the company having "incur[red] financial
the functions and duties of many rank and when it stated that, "[j]udging from the NLRC failed to perceive is that "[o]f losses which [in] fact has compelled [it] to
file employees, including the positions of titles or designation of the positions, it is primordial consideration is not the resort to retrenchment to prevent further
Garcia and Balla as Library Aide and obvious that the functions of one are nomenclature or title given to the losses".
Guidance Assistant, respectively, are now entirely different from that of the employee, but the nature of his
being performed by the supervisory other." SPI, being the employer, has functions." "It is not the job title but the Thus, what the letter was in effect
employees. These, however, do not satisfy possession of valuable information actual work that the employee saying was that because of financial
the requirement of substantial evidence concerning the functions of the offices performs." Also, change in the job title is losses, retrenchment was necessary,
that a reasonable mind might accept as within its organization. Nevertheless, it did not synonymous to a change in the which retrenchment in turn resulted in the
adequate to support a conclusion. As they not even bother to differentiate the two functions. A position cannot be abolished redundancy of private respondent's
are, they are grossly inadequate and positions. by a mere change of job title. In cases of position.
mainly self-serving. More compelling redundancy, the management should
evidence would have been a comparison Furthermore, on the assumption adduce evidence and prove that a position In the second place, we do not
of the old and new staffing patterns, a that the functions of a Marketing which was created in place of a previous believe that redundancy in an employer's
description of the abolished and newly Communications Manager are different one should pertain to functions which are personnel force necessarily or even
created positions, and proof of the set from that of a Corporate Development dissimilar and incongruous to the ordinarily refers to duplication of work.
business targets and failure to attain the Manager, it was not even discussed why abolished office. That no other person was holding the
same which necessitated the Mapua was not considered for the same position that private respondent held
reorganization or streamlining. position. While SPI had no legal duty to Thus, in Caltex (Phils.), Inc. (now prior to the termination of his services,
hire Mapua as a Marketing Chevron Phils., Inc.) v. NLRC, the Court does not show that his position had not
Communications Manager, it could have dismissed the employer’s claim of become redundant. Indeed, in any well-
organized business enterprise, it would be business judgment on the part of petitioner requirements of the enterprise; a position earlier, petitioner’s positions should not
surprising to find duplication of work and company. The wisdom or soundness of is redundant when it is superfluous, and have been created and filled up. If, on the
two (2) or more people doing the work of such characterization or decision was not superfluity of a position or positions may other hand, the department was created
one person. We believe that redundancy, subject to discretionary review on the part be the outcome of a number of factors, later, and there is no evidence to this
for purposes of our Labor Code, exists of the Labor Arbiter nor of the NLRC so such as the overhiring of workers, a effect, and it was to absorb the petitioner’s
where the services of an employee are long, of course, as violation of law or decreased volume of business or the positions, then there would be no reason
in excess of what is reasonably merely arbitrary and malicious action is not dropping of a particular product line or for the unexplained delay in its
demanded by the actual requirements shown. It should also be noted that the service activity previously manufactured or implementation, the restructuring then
of the enterprise. Succinctly put, a position held by private respondent, Sales undertaken by the enterprise. Redundancy should have been executed long before
position is redundant where it is Manager, was clearly managerial in in an employer’s personnel force, the salary increases in petitioner’s favor.
superfluous, and superfluity of a position character. In D.M. Consunji, Inc. v. however, does not necessarily or even That petitioner’s positions were not
or positions may be the outcome of a National Labor Relations Commission, the ordinarily refer to duplication of work. That duplicitous is best evidenced by the PRC’s
number of factors, such as overhiring of Court held: no other person was holding the same recognition of their imperative need
workers, decreased volume of business, position which the dismissed employee thereof, this is underscored by the fact that
or dropping of a particular product line or An employer has a much wider held prior to the termination of his services Miguelito S. Navarro, the company’s
service activity previously manufactured or discretion in terminating the does not show that his position had not Industrial Engineering Manager, was
undertaken by the enterprise. employment relationship of become redundant. designated as Pollution Control and Safety
managerial personnel as Manager on the very same day of
The employer has no legal compared to rank and file Private respondent PRC had no petitioner’s termination. While the
obligation to keep in its payroll more employees. However, such valid and acceptable basis to declare the petitioner had over ten (10) years of
employees than are necessarily for the prerogative of management to position of Pollution Control and Safety experience as a pollution control and
operation of its business. dismiss or lay off an employee Manager redundant as the same may not safety officer, Navarro was a virtual
must be made without abuse of be considered as superfluous; by the greenhorn lacking the requisite training
In the third place, in the case at discretion, for what is at stake is express mandate of the provisions earlier and experience for the assignment. A
bar, petitioner Wiltshire, in view of the not only the private respondent's cited, said positions are required by law. cursory perusal of his bio-data 31 reveals
contraction of its volume of sales and in position but also his means of Thus, it cannot be gainsaid that the that it was only several months after his
order to cut down its operating expenses, livelihood . . . . services of the petitioner are in excess of appointment that he attended his first
effected some changes in its organization what is reasonably required by the Occupational Safety & Health Seminar,
by abolishing some positions and thereby The determination of the enterprise. Otherwise, PRC would not moreover, it was only after his second
effecting a reduction of its personnel. continuing necessity of a particular officer have allowed ten (10) long years to pass seminar (Loss Control Management
Thus, the position of Sales Manager was or position in a business corporation is before opening its eyes to that fact; neither Seminar) that the PRC requested his
abolished and the duties previously management's prerogative, and the courts would it have increased the petitioner’s accreditation with the Safety Organization
discharged by the Sales Manager simply will not interfere with the exercise of such salary to P23,100.00 a month effective 1 of the Philippines. In trying to prop up
added to the duties of the General so long as no abuse of discretion or April 1988. The latter by itself is an Navarro’s competence for the position,
Manager, to whom the Sales Manager merely arbitrary or malicious action on the unequivocal admission of the specific and PRC alleges that the former finished from
used to report. part of management is shown. special need for the position and an open the University of the Philippines with a
recognition of the valuable services degree in Chemical Engineering, took
It is of no legal moment that the Escareal vs. NLRC, 213 SCRA 472, G.R. rendered by the petitioner. Such admission some units in pollution in the process and
financial troubles of the company were not No. 99359, September 2, 1992, Davide, and recognition are inconsistent with the had "undergone job training in pollution in
of private respondent's making. Private Jr., J. proposition that petitioner’s positions are cement firms through the Bureau of
respondent cannot insist on the retention redundant. It cannot also be argued that Mines." Compared to the training and
of his position upon the ground that he had Doctrine. In Wiltshire File Co., the said functions were duplicative, and experience of the petitioner, Navarro’s
not contributed to the financial problems of Inc. v. NLRC, this Court held that hence could be absorbed by the duties orientation would seem to pale.
Wiltshire. The characterization of private redundancy, for purposes of the Labor pertaining to the Industrial Engineering
respondent's services as no longer Code, exists where the services of an Manager. If indeed they were, and The private respondent alleges
necessary or sustainable, and therefore employee are in excess of what is assuming that the Industrial Engineering further that its decision to declare
properly terminable, was an exercise of reasonably demanded by the actual department of the PRC had been created petitioner’s position as redundant
"stemmed from its well-considered view shown by their recent financial statements, De Ocampo vs. NLRC, 213 SCRA 652, respondent) company. The wisdom or
that in order for the corporation’s safety PRC’s year-end net profits had steadily G.R. No. 101539, September 4, 1992, soundness of such characterization or
and pollution program to be more effective, increased from 1987 to 1990. While Medialdea, J. decision was not subject to discretionary
such program would have to be tied up concededly, Article 283 of the Labor Code review on the part of the Labor Arbiter nor
with the functions of the Industrial does not require that the employer should Doctrine. We sustain of the NLRC so long, of course, as
Engineering Manager." It is further posited be suffering financial losses before he can respondent Commission's finding that violation of law or merely arbitrary and
that since the job of safety and pollution terminate the services of the employee on petitioners' dismissal was justified by malicious action is not shown"
engineer "requires coordination with the ground of redundancy, it does not redundancy due to superfluity and hence
operating departments, knowledge of the mean either that a company which is doing legal. In contracting the services of
manufacturing processes, and adequate well can effect such a dismissal Gemac Machineries, as part of the
presence in plant areas, a task which the whimsically or capriciously. The fact that a We believe that redundancy, for company's cost-saving program, the
company’s safety and pollution control company is suffering from business losses purposes of our Labor Code, exists where services rendered by the mechanics
officer would not be up to as he works merely provides stronger justification for the services of an employee are in excess became redundant and superfluous, and
singlehandedly, it is only the Industrial the termination. of what is reasonably demanded by the therefore properly terminable. The
Engineer, commanding a department of actual requirement of the enterprise. company merely exercised its business
five (5) engineers and one (1) clerk, who The respondent NLRC relied on Succinctly put, a position is redundant judgment or management prerogative. And
can live up to corporate expectations. Wiltshire File Co., v. NLRC in declaring where it is superfluous, and superfluity of a in the absence of any proof that the
Indeed, the proposition that a department that the employer has no legal obligation position or positions may be the outcome management abused its discretion or
manned by a number of engineers to keep in its payroll more employees than of a number of factors, such as over hiring acted in a malicious or arbitrary manner,
presumably because of the heavy are necessary for the operation of its of workers, decreased volume of business, the court will not interfere with the exercise
workload, could still take on the additional business. Aside from the fact that in the or dropping of a particular product line or of such prerogative.
responsibilities which were originally case at bar, there was no compelling service activity previously manufactured or
reposed in an altogether separate section reason to dismiss the petitioner as the undertaken by the enterprise. The 2.4. Temporary
headed by the petitioner, is difficult to company was not incurring any losses, the employer had no legal obligation to keep Closure (Art. 286)
accept. It seems more reasonable to view position declared redundant in the in its payroll more employees, than are
the set-up which existed before the Wiltshire case was that of a Sales necessary for the operation of its 2.5. Disease (Art. 284)
termination as being more conducive to Manager, a management created position. business.
efficient operations. And even if We were In the case at bar, petitioner’s position is *Article 157 of R.A. No. 10151
to sustain PRC’s explanation, why did it so one created by law. The reduction of the number of (Night Workers Act) provides that “a night
suddenly incorporate functions after the workers in a company made necessary by worker certified as temporarily unfit for
separate position of Pollution and Safety The NLRC adds further that the the introduction of the services of Gemac night work shall be given the same
Control Manager had existed for over ten termination was effected in the exercise of Machineries in the maintenance and repair protection against dismissal or notice of
(10) years? No effort whatsoever was management prerogative and that account of its industrial machinery is justified. dismissal as other workers who are
undertaken to gradually integrate both should also be taken of the "life of the There can be no question as to the right of prevented from working for reasons of
functions over this span of time. Anent this company which is . . . an active pillar of the company to contract the services of health.” The underline phrase refers to
specific point, all that the private our economy and upon whose existence Gemac Machineries to replace the Article 284 of the Labor Code. (Possible
respondent has to say is that the still depends the livelihood of a great services rendered by the terminated Bar Problem)
declaration of redundancy was made number of workers." It goes on to observe mechanics with a view to effecting more
pursuant to its continuing program, which that" [t]he records are bereft of proof which economic and efficient methods of Sy vs. CA, G.R. No. 142293, February
has been ongoing for the past ten (10) could have been the basis of vengeful production. 27, 2003, Quisumbing, J.
years, of streamlining the personnel termination other than the company’s
complement and maintaining a lean and legitimate objective to trim its work force." In the same case, We ruled that Doctrine. Article 284 of the
effective organization. In the face of the circumstances "(t)he characterization of (petitioners') Labor Code authorizes an employer to
surrounding the dismissal, this Court finds services as no longer necessary or terminate an employee on the ground of
Besides, there would seem to be it extremely difficult to give credence to sustainable, and therefore properly disease, viz:
no compelling reason to save money by such conclusions. terminable, was an exercise of business
removing such an important position. As judgment on the part of (private
 Art. 284. Disease as a ground for certificate requirement before Sahot’s P15,000.00 as his separation pay; is the employee who severs his or her
termination- An employer may terminate dismissal was effected. In the same case however, the said amount corresponds employment ties. This is precisely the
the services of an employee who has been of Sevillana vs. I.T. (International) Corp., only to the period between 1993 and 1999; reason why Section 8, Rule 1, Book VI of
found to be suffering from any disease and we ruled: petitioner prayed that he be granted the Omnibus Rules Implementing the
whose continued employment is prohibited separation pay computed from his first day Labor Code, directs that an employer shall
by law or prejudicial to his health as well Since the burden of proving the of employment in June 1963, but not terminate the services of the employee
as the health of his co-employees: xxx validity of the dismissal of the employee respondent refused. Yeo Han Guan unless there is a certification by a
rests on the employer, the latter should disputed the allegations of Villaruel that competent public health authority that the
However, in order to validly likewise bear the burden of showing that after the latter’s recovery from illness, he disease is of such nature or at such a
terminate employment on this ground, the requisites for a valid dismissal due to a was directed to report for work but never stage that it cannot be cured within a
Book VI, Rule I, Section 8 of the Omnibus disease have been complied with. In the showed up. Also, Yeo Han Guan denied period of six (6) months even with proper
Implementing Rules of the Labor Code absence of the required certification by a the allegation that he terminated Villaruel; medical treatment.
requires: competent public health authority, this the truth of the matter being that he told
Court has ruled against the validity of the Villaruel that he could go back to work but In the case at bar, Yeo Han Gaun
Sec. 8. Disease as a ground for employee’s dismissal. It is therefore the latter refused as he is no longer did not terminate Villaruel’s employment
dismissal- Where the employee suffers incumbent upon the private respondents to interested. The Labor Arbiter ruled in favor on the ground of disease. This is evident
from a disease and his continued prove by the quantum of evidence of Villaruel which was affirmed an later on from the various pleadings filed by
employment is prohibited by law or required by law that petitioner was not modified by the NLRC. Upon appeal to petitioner that he never intended to return
prejudicial to his health or to the health of dismissed, or if dismissed, that the CA, the latter reversed the Labor Arbiter to his employment with respondent on the
his co-employees, the employer shall not dismissal was not illegal; otherwise, the and the NLRC. Hence, the case reached ground that his health is failing. Indeed,
terminate his employment unless there is dismissal would be unjustified. This Court the SC. petitioner did not ask for reinstatement. In
a certification by competent public health will not sanction a dismissal premised on fact, he rejected respondent's offer for him
authority that the disease is of such nature mere conjectures and suspicions, the ISSUE: Whether or not Villaruel’s to return to work. This is tantamount to
or at such a stage that it cannot be cured evidence must be substantial and not employment is terminated under Article resignation.
within a period of six (6) months even with arbitrary and must be founded on clearly 284 of the Labor Code.
proper medical treatment. If the disease or established facts sufficient to warrant his Since petitioner was not
ailment can be cured within the period, the separation from work. HELD: No. Article 284 of the Labor Code terminated from his employment and,
employer shall not terminate the employee provides, “An employer may terminate the instead, is deemed to have resigned
but shall ask the employee to take a leave. Villaruel vs. Yeo Han Guan, G.R. No. services of an employee who has been therefrom, he is not entitled to separation
The employer shall reinstate such 169191, June 1, 2011, Peralta, J. found to be suffering from any disease and pay under the provisions of the Labor
employee to his former position whose continued employment is prohibited Code. The rule is that an employee who
immediately upon the restoration of his FACTS: Romeo Villaruel was employed by law or is prejudicial to his health as well voluntarily resigns from employment is not
normal health. as a machine operator by Ribonette as to the health of his co-employees: entitled to separation pay, except when it
Manufacturing Company (now Yuhans Provided, That he is paid separation pay is stipulated in the employment contract or
As this Court stated in Triple Enterprises) which is owned and managed equivalent to at least one (1) month salary CBA, or it is sanctioned by established
Eight integrated Services, Inc. vs. by Yeo Han Guan. Villaruel filed a or to one-half (½) month salary for every employer practice or policy.
NLRC, the requirement for a medical complaint for payment of separation pay year of service whichever is greater, a
certificate under Article 284 of the Labor before the NLRC against Yuhans fraction of at least six months being Wuerth Philippines vs. Ynson, G.R. No.
Code cannot be dispensed with; Enterprises. He alleged in his complaint considered as one (1) whole year.” A plain 175932, February 15, 2012, Peralta, J.
otherwise, it would sanction the unilateral that on October 5, 1998, he got sick and reading of the said provision clearly
and arbitrary determination by the was confined in a hospital; on December presupposes that it is the employer who FACTS: Wuerth Philippines, Inc.
employer of the gravity or extent of the 12, 1998, he reported for work but was no terminates the services of the employee (subsidiary of Wuerth Germany) hired
employee’s illness and thus defeat the longer permitted to go back because of his found to be suffering from any disease and Rodante Ynson as National Sales
public policy in the protection of labor. illness; he asked that respondent allow whose continued employment is prohibited Manager (NSM) for Automotive. As NSM,
him to continue working but be assigned a by law or is prejudicial to his health as well Ynson was required to travel to different
In the case at bar, the employer lighter kind of work but his request was as to the health of his co-employees. It parts of the country so as to supervise the
clearly did not comply with the medical denied; instead, he was offered a sum of does not contemplate a situation where it sales activities of the company’s sales
managers, make a schedule of activities January 24, 2003 and abandonment of It further stated that with regard evidence that would have justified his
geared towards increasing the sales of work. However, Ynson replied that he to disease as a ground for termination, continued absence from work.
petitioner's products, and submit said cannot attend such investigation as his Article 284 of the Labor Code provides
schedule to Marlon Ricanor, Chief attending physician frowned him from that an employer may terminate the Clearly, since there is no more
Executive Officer of Wuerth. It turned out travelling. Subsequently, his request to be services of an employee who has been hindrance for him to return to work and
that on January 24, 2003, he suffered a assigned for administrative work was found to be suffering from any disease and attend the investigations set by petitioner,
stroke, and on the succeeding days, he denied. Later, Ricanor again sent letters whose continued employment is prohibited respondent's failure to do so was without
was confined at the Davao Doctor's to Ynson for him to attend the by law or is prejudicial to his health, as any valid or justifiable reason.
Hospital. He immediately informed investigation; now, with additional charge well as to the health of his co-employees. Respondent's conduct shows his
petitioner about his ailment. On March 27, of gross efficiency. However, Ynson indifference and utter disregard of his work
2003, Dr. Daniel de la Paz, a Neurologist- reiterated its previous reasoning. In order to validly terminate and his employer's interest, and displays
Electroencephalographer in Davao City, Consequently, Ynson was informed by employment on this ground, Section 8, his clear, deliberate, and gross dereliction
issued a Certification stating that Ricanor that the management decided to Rule I, Book VI of the Omnibus Rules of duties.
respondent has been under his care since terminate his employment. Implementing the Labor Code requires,
January 24, 2003 and was confined in the “Where the employee suffers from a In Triple Eight Integrated
hospital from January 24 to February 3, As a consequence, Ynson filed a disease and his continued employment is Services, Inc. v. NLRC, the Court held that
2003 due to sudden weakness on the left complaint for illegal dismissal before the prohibited by law or prejudicial to his the requirement for a medical certificate
side of his body. In another Medical NLRC Regional Arbitration Branch of health or to the health of his co- under Article 284 of the Labor Code
Certificate dated June 4, 2003, Dr. De la Davao City. Labor Arbiter Solamo ruled in employees, the employer shall not cannot be dispensed with; otherwise, it
Paz certified that respondent may return to his favor which was affirmed by the NLRC. terminate his employment unless there is would sanction the unilateral and arbitrary
work, but advised him to continue with his Upon petition for certiorari, the CA partly a certification by a competent public health determination by the employer of the
rehabilitation regimen for another month granted the said petition holding that authority that the disease is of such nature gravity or extent of the employee’s illness
and a half. Dr. Bernard S. Chiew, a Wuerth had the right to terminate the or at such a stage that it cannot be cured and, thus, defeat the public policy on the
specialist on Adult Cardiology, also issued employment of Ynson and that it had within a period of six (6) months even with protection of labor. In the present case,
an undated Medical Certificate stating that observed due process. However, the CA proper medical treatment. If the disease or there was no showing that prior to
he examined respondent who was awarded Ynson some monetary awards ailment can be cured within the period, the terminating respondent's employment,
diagnosed with primary hypertension, including damages. Hence, the case employer shall not terminate the employee petitioner secured the required certification
diabetes mellitus II, S/P stroke on June 4, reached the SC. but shall ask the employee to take a leave. from a competent public health authority
2003, and recommended that the latter The employer shall reinstate such that the disease he suffered was of such
should continue with his physical ISSUE: Whether or not Ynson can be employee to his former position nature or at such a stage that it cannot be
rehabilitation until July 2003. On June 9, terminated under Article 284 of the Labor immediately upon the restoration of his cured within six months despite proper
2003, respondent sent an e-mail to Hans Code. normal health.” medical treatment, pursuant to Section 8,
Sigrit of Wuerth Germany, informing the Rule I, Book VI of the Omnibus Rules
latter that he can return to work on June HELD: Yes. The SC agreed with the CA Even considering the directive of Implementing the Labor Code.
19, 2003, but in view of the that pursuant to Article 284 of the Labor respondent's doctor to continue with his
recommendation of doctors that he should Code, respondent’s illness is considered present regimen for at least another month 2.6. Reorganization/abolition
continue with his rehabilitation until July, an authorized cause to justify his and a half, it could be safely deduced that,
he requested that administrative work be termination from employment. The CA counted from June 4, 2003, respondent's Hantex Trading Co., Inc. vs. Court of
given to him while in Davao City, until ruled that although petitioner did not rehabilitation regimen ended on July 19, Appeals, G.R. No. 148241, September
completion of his therapy. On June 10, comply with the medical certificate 2003. Despite the completion of his 27, 2002, Bellosillo, J.
2003, Alexandra Knapp, Secretary of the requirement before respondent’s dismissal treatment, respondent failed to attend the
Management Board of Wuerth Germany, was effected, this was offset by investigations set on July 25, 2003 and FACTS: Bernardo Singson was employed
forwarded the e-mail to Ricanor. respondent's absence for more than the August 18, 2003. Thus, his unexplained by Hantex as sales representative. One
six (6)-month period that the law allows an absence in the proceedings should be time, the management of Hantex called
Thereafter, Ynson was required employee to be on leave in order to construed as waiver of his right to be the attention of Singson regarding his
to appear for investigation in the Manila recover from an ailment. present therein in order to adduce deteriorating sales performance. Despite
office for the charges of AWOL starting thereof, Singson’s performance showed no
sign of improvement as it remained without leave); or any letter wherein they certification election in DMTC, King of
inadequate and unsatisfactory. Thus, Moreover, Singson immediately required respondent to report for work and Kings Transport, Inc. (KKTI) was
Hantex, through its president, Mariano instituted the instant case for illegal explain his unauthorized absences. But, incorporated with the Securities and
Chua, held a "one-on-one" conference dismissal with a prayer for reinstatement as it is, petitioners’ defense of Exchange Commission which acquired
with him. Conflicting versions of what against his employer. An employee who abandonment cannot be given credence new buses. Many DMTC employees were
transpired during the conference were loses no time in protesting his layoff for lack of evidentiary support. subsequently transferred to KKTI and
offered. Singson alleged that Chua asked cannot by any reasoning be said to have excluded from the election. The KKTI
for his resignation from the company, and abandoned his work, for it is already a As we see it, respondent’s refusal employees later organized the Kaisahan
required him to submit a resignation letter well-settled doctrine that the filing by an to be reinstated is more of a symptom of ng mga Kawani sa King of Kings (KKKK)
otherwise his separation pay, 13th month employee of a complaint for illegal strained relations between the parties, which was registered with DOLE wherein
pay and other monetary benefits would not dismissal with a prayer for reinstatement is rather than an indicium of abandonment of Mamac was elected KKKK president. As
be paid. When he refused, Chua ejected proof enough of his desire to return to work as obstinately insisted by petitioners. bus conductor of KKTI, Mamac was
him from the premises of Hantex and left work, thus negating the employer’s charge While respondent desires to have his job required to accomplish a Conductor’s Trip
instructions to the guards on-duty to refuse of abandonment. Verily, it would be back, it must have later dawned on him Report and to submit it to the company for
him admittance. On the other hand, illogical for respondent Singson to have that the filing of the complaint for illegal each trip. If there is an irregularity
petitioners denied that they dismissed left his job and thereafter file the complaint dismissal and the bitter incidents that discovered, the company will issue an
Singson and maintained that the against his employee. followed have sundered the erstwhile Irregularity Report and will require the
conference was merely intended to harmonious relationship between the employee to explain it.
motivate him "to exert more effort in his job Abandonment is a matter of parties. Respondent must have surely
and mend his work attitude;" and that intention and cannot lightly be presumed realized that even if reinstated, he will find Upon audit of Mamac’s
Singson apparently resented Chua for it from certain equivocal acts. For it uncomfortable to continue working under conductor’s report, KKTI noted irregularity.
that he never reported back for work after abandonment to exist, it is essential (a) the hostile eyes of the employer who had It discovered that respondent declared
the conference. Hence, Singson filed a that the employee must have failed to been forced to reinstate him. He had every several sold tickets as returned tickets
complaint for illegal dismissal. The Labor report for work or must have been absent reason to fear that if he accepted causing KKTI to lose an income of eight
Arbiter ruled in Singson’s favor. The ruling without valid or justifiable reason; and, (b) petitioners’ offer, their watchful eyes would hundred and ninety pesos. While no
was affirmed by the NLRC. Hence, the that there must have been a clear intention thereafter be focused on him, to detect irregularity report was prepared on the
case reached the SC. to sever the employer-employee every small shortcoming of his as a October 28, 2001 incident, KKTI
relationship manifested by some overt acts ground for vindictive disciplinary action. In nevertheless asked respondent to explain
ISSUE: Whether or not Singson was — the second element is the more such instance, reinstatement would no the discrepancy. In his letter, respondent
illegally dismissed. determinative factor. Mere absence of the longer be beneficial to him. said that the erroneous declaration in his
employee is not sufficient. The burden of October 28, 2001 Trip Report was
HELD: Yes. Singson did not abandon his proof is on the employer to show a clear b. Procedural Due Process unintentional. He explained that during
work contrary to Hantex’s assertion. and deliberate intent on the part of the that day’s trip, the windshield of the bus
Considering the hard times in which we employee to discontinue employment 1. Twin-notice requirement assigned to them was smashed; and they
are in, it is incongruous for respondent to without any intention of returning. (2016 Bar) had to cut short the trip in order to
simply give up his work after receiving a immediately report the matter to the police.
mere reprimand from his employer. No At any rate, petitioners King of Kings vs. Mamac, G.R. No. As a result of the incident, he got confused
employee would recklessly abandon his undoubtedly could have presented better 166208, June 29, 2007, Velasco, Jr., J. in making the trip report. KKTI terminated
job knowing fully well the acute evidence to buttress their claim of Mamac. The dismissal letter alleged that
unemployment problem and the difficulty abandonment. After all, being the FACTS: Santiago Mamac was hired as the October 28, 2001 irregularity was an
of looking for a means of livelihood employers, they are in possession of bus conductor of Don Mariano Transit act of fraud against the company. KKTI
nowadays. With a family to support, we documents relevant to this case. For Corporation (DMTC). DMTC employees also cited as basis for respondent’s
doubt very much that respondent would so instance, they could have at least including Mamac formed the Damayan ng dismissal the other offenses he allegedly
easily sacrifice his only source of income presented in evidence copies of mga Manggagawa, Tsuper at Conductor- committed since 1999.
and unduly expose his family to hunger respondent’s daily time records, which are Transport Workers Union and registered it
and untold hardships. Certainly, no man in on-file in its office, to prove the dates with the Department of Labor and Mamac filed a complaint for
his right mind would do such thing. respondent was on AWOL (absence Employment. Pending the holding of a illegal dismissal but Labor Arbiter Reyes
dismissed the same. Upon appeal to (2.) After serving the first notice, the the due process requirements, held that the latter ample opportunity to be heard
NLRC, the latter modified the decision by employers should schedule and conduct a the employee’s written explanation did not and to defend himself with the assistance
ordering KKTI to pay Mamac P 10,000 for hearing or conference wherein the excuse the fact that there was a complete of his representative if he so desires in
failure to comply with the due process employees will be given the opportunity to: absence of the first notice. Second, even accordance with company rules and
requirement. The CA affirmed the NLRC (1) explain and clarify their defenses to the assuming that petitioner KKTI was able to regulations promulgated pursuant to
with modification as to the awards. charge against them; (2) present evidence furnish respondent an Irregularity Report guidelines set by the Department of Labor
Hence, the case reached the SC. in support of their defenses; and (3) rebut notifying him of his offense, such would and Employment. Any decision taken by
the evidence presented against them by not comply with the requirements of the the employer shall be without prejudice to
ISSUE: Whether or not procedural due the management. During the hearing or law. We observe from the irregularity the right of the worker to contest the
was process was complied with in this conference, the employees are given the reports against respondent for his other validity or legality of his dismissal by filing
case. chance to defend themselves personally, offenses that such contained merely a a complaint with the regional branch of the
with the assistance of a representative or general description of the charges against National Labor Relations Commission. The
HELD: No. As provided in Art. 277 of the counsel of their choice. Moreover, this him. The reports did not even state a burden of proving that the termination was
Labor Code and the implementing rule, the conference or hearing could be used by company rule or policy that the employee for a valid or authorized cause shall rest
following should be considered in the parties as an opportunity to come to an had allegedly violated. Likewise, there is on the employer.
terminating the services of employees amicable settlement. (3.) After no mention of any of the grounds for
based on just causes under Art. 282: (1.) determining that termination of termination of employment under Art. 282 Implementing Rule of 277. SEC.
The first written notice to be served on the employment is justified, the employers of the Labor Code. Thus, KKTI’s 2. Standards of due process; requirements
employees should contain the specific shall serve the employees a written notice "standard" charge sheet is not sufficient of notice.––In all cases of termination of
causes or grounds for termination against of termination indicating that: (1) all notice to the employee. Third, no hearing employment, the following standards of
them, and a directive that the employees circumstances involving the charge was conducted. Regardless of due process shall be substantially
are given the opportunity to submit their against the employees have been respondent’s written explanation, a observed: I. For termination of
written explanation within a reasonable considered; and (2) grounds have been hearing was still necessary in order for him employment based on just causes as
period. "Reasonable opportunity" under established to justify the severance of their to clarify and present evidence in support defined in Article 282 of the Code: (a) A
the Omnibus Rules means every kind of employment. of his defense. Moreover, respondent written notice served on the employee
assistance that management must accord made the letter merely to explain the specifying the ground or grounds for
to the employees to enable them to In the instant case, KKTI admits circumstances relating to the irregularity in termination, and giving said employee
prepare adequately for their defense. This that it had failed to provide respondent his October 28, 2001 Conductor’s Trip reasonable opportunity within which to
should be construed as a period of at least with a "charge sheet." However, it Report. He was unaware that a dismissal explain his side. (b) A hearing or
five (5) calendar days from receipt of the maintains that it had substantially proceeding was already being effected. conference during which the employee
notice to give the employees an complied with the rules, claiming that Thus, he was surprised to receive the concerned, with the assistance of counsel
opportunity to study the accusation against "respondent would not have issued a November 26, 2001 termination letter if he so desires is given opportunity to
them, consult a union official or lawyer, written explanation had he not been indicating as grounds, not only his October respond to the charge, present his
gather data and evidence, and decide on informed of the charges against him." This 28, 2001 infraction, but also his previous evidence, or rebut the evidence presented
the defenses they will raise against the contention of KKTI is not tenable. First, infractions. against him. (c) A written notice of
complaint. Moreover, in order to enable respondent was not issued a written notice termination served on the employee,
the employees to intelligently prepare their charging him of committing an infraction. Article 277 of the LC. (b) Subject indicating that upon due consideration of
explanation and defenses, the notice The law is clear on the matter. A verbal to the constitutional right of workers to all the circumstances, grounds have been
should contain a detailed narration of the appraisal of the charges against an security of tenure and their right to be established to justify his termination.
facts and circumstances that will serve as employee does not comply with the first protected against dismissal except for a
basis for the charge against the notice requirement. In Pepsi Cola Bottling just and authorized cause without Maersk-Filipinas vs. Avestruz, G.R. No.
employees. A general description of the Co. v. NLRC, the Court held that prejudice to the requirement of notice 207010, February 18, 2015, Perlas-
charge will not suffice. Lastly, the notice consultations or conferences are not a under Article 283 of this Code, the Berbabe, J.
should specifically mention which substitute for the actual observance of employer shall furnish the worker whose
company rules, if any, are violated and/or notice and hearing. Also, in Loadstar employment is sought to be terminated a FACTS: Maersk-Filipinas Crewing, Inc.
which among the grounds under Art. 282 Shipping Co., Inc. v. Mesano, the Court, written notice containing a statement of (Maersk), on behalf of its foreign principal,
is being charged against the employees. sanctioning the employer for disregarding the causes for termination and shall afford A.P. Moller Singapore Pte. Ltd. (A.P.
Moller), hired Toribio C. Avestruz as Chief Avestruz was illegally dismissed. Hence, C. If after the investigation or defend himself. While Captain Woodward
Cook on board the vessel M/V Nedlloyd the case reached the SC. hearing, the Master is convinced claimed in his e-mail that he conducted a
Drake. While in the course of the weekly that imposition of a penalty is “disciplinary hearing” informing Avestruz of
inspection of the vessel’s galley, Captain ISSUE: Whether or not Avestruz Maersk justified, the Master shall issue a his inefficiency, no evidence was
Charles C. Woodward (Captain complied with the twin-notice requirement. written notice of penalty and presented to support the same.
Woodward) noticed that the cover of the the reasons for it to the
garbage bin in the kitchen near the HELD: No. The SC affirmed the finding of seafarer, with copies furnished Neither was Avestruz given a
washing area was oily. As part of the CA that Avestruz was not accorded to the Philippine agent. written notice of penalty and the reasons
Avestruz’s job was to ensure the procedural due process, there being no for its imposition. Instead, Captain
cleanliness of the galley, Captain compliance with the provisions of Section Dismissal for just cause may be Woodward verbally informed him that he
Woodward called Avestruz and asked him 17 of the POEA-SEC which requires twin- effected by the Master without furnishing was dismissed from service and would be
to stand near the garbage bin where the notice rule. the seafarer with a notice of dismissal if disembarked from the vessel. It bears
former took the latter’s right hand and there is a clear and existing danger to the stressing that only in the exceptional case
swiped it on the oily cover of the garbage SECTION 17 OF POEA-SEC. safety of the crew or the vessel. The of clear and existing danger to the safety
bin, telling Avestruz to feel it. Shocked, DISCIPLINARY PROCEDURES Master shall send a complete report to the of the crew or vessel that the required
Avestruz remarked, “Sir if you are looking manning agency substantiated by notices may be dispensed with, and, once
for [dirt], you can find it[;] the ship is big. The Master shall comply with the witnesses, testimonies and any other again, records are bereft of evidence
Tell us if you want to clean and we will following disciplinary procedures against documents in support thereof. showing that such was the situation when
clean it.” Captain Woodward replied by an erring seafarer: Avestruz was dismissed.
shoving Avestruz’s chest, to which the As explained in Skippers Pacific,
latter complained and said, “Don’t touch A. The Master shall furnish the Inc. vs. Mira: An erring seaman is given a i. Failure to comply
me,” causing an argument to ensue seafarer with a written notice written notice of the charge against him
between them. Later that afternoon, containing the following: and is afforded an opportunity to explain or Agabon vs. NLRC, G.R. No. 158693,
Captain Woodward summoned and 1. Grounds for the defend himself. Should sanctions be November 17, 2003, Ynarez-Santiago, J.
required Avestruz to state in writing what charges as listed in imposed, then a written notice of penalty
transpired in the galley that morning. Section 33 of this and the reasons for it shall be furnished FACTS: Virgilio and Jenny Agabon worked for
Avestruz complied and submitted his Contract or analogous the erring seafarer. It is only in the respondent Riviera Home Improvements, Inc. as
written statement on that same day. act constituting the exceptional case of clear and existing gypsum and cornice installers from January 1992
Captain Woodward likewise asked same. danger to the safety of the crew or vessel until Feb 1999. Their employment was terminated
Messman Jomilyn P. Kong (Kong) to 2. Date, time and place that the required notices are dispensed when they were dismissed for allegedly
submit his own written statement for a formal with; but just the same, a complete report abandoning their work. Petitioners Agabon then
regarding the incident, to which the latter investigation of the should be sent to the manning agency, filed a case of illegal dismissal. The Labor
immediately complied. On the very same charges against the supported by substantial evidence of the Arbiter ruled in favor of the spouses Agabon and
day, Captain Woodward informed Avestruz seafarer concerned. findings. ordered Riviera to pay them their money claims.
that he would be dismissed from service On appeal, the NLRC reversed the Labor
and be disembarked in India. B. The Master or his authorized In this case, there is dearth of Arbiter’s ruling, finding that the Agabons were
representative shall conduct evidence to show that Avestruz had been indeed guilty of abandonment. The Court of
As a consequence, Avestruz filed the investigation or hearing, given a written notice of the charge Appeals in turn ruled that the dismissal of
a complaint for illegal dismissal when he giving the seafarer the against him, or that he was given the the petitioners was not illegal because
arrived in the Philippines. The Labor opportunity to explain or opportunity to explain or defend himself. they had abandoned their employment but
Arbiter dismissed the complaint. Upon defend himself against the The statement given by Captain ordered the payment of money claims.
appeal to NLRC, the latter found that there charges. These procedures Woodward requiring him to explain in Hence, the case was elevated to the
is a just cause for the dismissal for must be duly documented and writing the events that transpired at the Supreme Court. The Agabons claim,
Avestruz but the employer failed to comply entered into the ship’s galley in the morning of June 22, 2011 among others that Riviera violated the
with procedural due process. When the logbook. hardly qualifies as a written notice of the requirements of notice and hearing when the
case reached the CA, the latter ruled that charge against him, nor was it an latter did not send written letters of termination to
opportunity for Avestruz to explain or their addresses. Riviera Home Improvement
admitted to not sending the Agabons letters of reinstatement of the dismissed employee or the by the Supreme Court in Serrano vs. delinquency or culpability on the part of
termination to their last known addresses payment of backwages to him. In failing, however, NLRC. the employee. Instead, the dismissal
because the same would be futile, as the to comply with the procedure prescribed by law in process is initiated by the employer’s
Agabons do not reside there anymore. However, terminating the services of the employee, the ISSUE: Whether or not the award of exercise of his management prerogative,
it also claims that the Agabons abandoned their employer must be deemed to have opted or, in nominal damages in case of termination i.e. when the employer opts to install labor
work. More than once, they subcontracted any case, should be made liable, for the payment with authorized cause but without saving devices, when he decides to cease
installation works for other companies. They were of separation pay. It might be pointed out that complying with procedural due process is business operations or when, as in this
warned of termination if the same act was the notice to be given and the hearing to proper. case, he undertakes to implement a
repeated, still, they disregarded the warning. be conducted generally constitute the two- retrenchment program. The clear-cut
part due process requirement of law to be HELD: Yes. In Agabon vs. NLRC, the SC distinction between a dismissal for just
ISSUE: Whether or not the award of nominal accorded to the employee by the had the opportunity to resolve a similar cause under Article 282 and a dismissal
damages in case of termination with just employer. Nevertheless, peculiar question. Therein, SC found that the for authorized cause under Article 283 is
cause but without complying with circumstances might obtain in certain employees committed a grave offense, further reinforced by the fact that in the
procedural due process is proper. situations where to undertake the above i.e., abandonment, which is a form of a first, payment of separation pay, as a
steps would be no more than a useless neglect of duty which, in turn, is one of the rule, is not required, while in the
HELD: Yes. The dismissal is valid, but Riviera formality and where, accordingly, it would just causes enumerated under Article 282 second, the law requires payment of
should pay nominal damages in the amount of not be imprudent to apply the res ipsa of the Labor Code. In said case, the SC separation pay.
P30,000 to the Agabons in vindication of the latter loquitur rule and award, in lieu of upheld the validity of the dismissal despite
for violating their right to notice and hearing. The separation pay, nominal damages to non-compliance with the notice For these reasons, there ought to be a
penalty is in the nature of a penalty or the employee. requirement of the Labor Code. However, difference in treatment when the ground for
indemnification, the amount dependent on the the SC required the employer to pay the dismissal is one of the just causes under Article
facts of each case, including the nature of gravity Jaka Food Processing vs. Pacot, G.R. dismissed employees the amount of 282, and when based on one of the authorized
of offense of the employer. In this case, the No. 151378, March 28, 2005, Garcia, J. P30,000.00, representing nominal causes under Article 283. Accordingly, it is wise to
Serrano doctrine was re-examined. First, damages for non-compliance with hold that: (1.) if the dismissal is based on a just
in the Serrano case, the dismissal was upheld, FACTS: Respondents Darwin Pacot et al. statutory due process. cause under Article 282 but the employer failed to
but it was held to be ineffectual (without legal were earlier hired by petitioner Jaka Foods comply with the notice requirement, the sanction
effect). Hence, Serrano was still entitled to the Processing Corporation until the latter The difference between Agabon to be imposed upon him should be tempered
payment of his backwages from the time of terminated their employment because the and the instant case is that in the former, because the dismissal process was in effect
dismissal until the promulgation of the court of the corporation was “in dire financial straits”. the dismissal was based on a just cause initiated by an act imputable to the employee; and
existence of an authorized cause. Further, he was It is not disputed, however, that the under Article 282 of the Labor Code while (2.) if the dismissal is based on an authorized
entitled to his separation pay as mandated under termination was effected without JAKA in the present case, respondents were cause under Article 283 but the employer failed to
Art.283. The ruling is unfair to employers and has complying with the requirement under dismissed due to retrenchment, which is comply with the notice requirement, the sanction
the danger of the following consequences: (a.) of Article 283 of the Labor Code regarding one of the authorized causes under Article should be stiffer because the dismissal process
filing frivolous suits even by notorious employees the service of a written notice upon the 283 of the same Code. was initiated by the employer’s exercise of his
who were justly dismissed but were deprived employees and the Department of Labor management prerogative.
of statutory due process; they are rewarded by and Employment at least one (1) month A dismissal for just cause under
invoking due process; (b.) It would create absurd before the intended date of termination. Article 282 implies that the employee It is, therefore, established that
situations where there is just or authorized cause Hence, Pacot et al. filed a complaint for concerned has committed, or is guilty of, there was ground for respondents’
but a procedural infirmity invalidates the illegal dismissal. The Labor Arbiter ruled some violation against the employer, i.e. dismissal, i.e., retrenchment, which is one
termination, i.e. an employee who became a in their favor and order Jaka and its HRD the employee has committed some of the authorized causes enumerated
criminal and threatened his co-workers’ lives, who Manager to reinstate Pacot et al. with full serious misconduct, is guilty of some fraud under Article 283 of the Labor Code.
fled and could not be found; (c.) it could backwages and separation pay if against the employer, or, as in Agabon, he Likewise, it is established that JAKA failed
discourage investments that would generate reinstatement is not possible. The NLRC has neglected his duties. Thus, it can be to comply with the notice requirement
employment in the economy. Resultantly, where affirmed the Labor Arbiter. However, the said that the employee himself initiated the under the same Article. Considering the
there is just cause for dismissal but due process Court of Appeals reversed the decision of dismissal process. On the other hand, a factual circumstances in the instant case
has not been properly observed by an employer, it the NLRC applying the doctrine laid down dismissal for an authorized cause under and the above ratiocination, Supreme
would not be right to order either the Article 283 does not necessarily imply Court, therefore, deem it proper to fix the
indemnity at P50,000.00. The rule, and Doria were denied due process. Nonetheless, Section 2(d), Rule I Labor Code should be interpreted in broad
therefore, is that in all cases of business Hence, the case reached the SC. of the Implementing Rules of Book VI of strokes. It is satisfied not only by a formal
closure or cessation of operation or the Labor Code should not be taken to face to face confrontation but by any
undertaking of the employer, the affected ISSUE: Whether or not procedural due mean that holding an actual hearing or meaningful opportunity to controvert the
employee is entitled to separation pay. process requires a formal hearing. conference is a condition sine qua non for charges against him and to submit
This is consistent with the state policy of compliance with the due process evidence in support thereof.
treating labor as a primary social HELD: No. The SC noted a marked requirement in termination of employment.
economic force, affording full protection to difference in the standards of due process The test for the fair procedure guaranteed A hearing means that a party
its rights as well as its welfare. The to be followed as prescribed in the Labor under Article 277(b) cannot be whether should be given a chance to adduce his
exception is when the closure of Code and its implementing rules. The there has been a formal pretermination evidence to support his side of the case
business or cessation of operations is Labor Code, on one hand, provides that confrontation between the employer and and that the evidence should be taken into
due to serious business losses or an employer must provide the employee the employee. The "ample opportunity to account in the adjudication of the
financial reverses; duly proved, in ample opportunity to be heard and to be heard" standard is neither synonymous controversy. "To be heard" does not mean
which case, the right of affected defend himself with the assistance of his nor similar to a formal hearing. To confine verbal argumentation alone inasmuch as
employees to separation pay is lost for representative if he so desires. The the employee’s right to be heard to a one may be heard just as effectively
obvious reasons. omnibus rules implementing the Labor solitary form narrows down that right. It through written explanations, submissions
Code, on the other hand, require a deprives him of other equally effective or pleadings. Therefore, while the phrase
ii. Ample opportunity to be hearing and conference during which the forms of adducing evidence in his defense. "ample opportunity to be heard" may in
heard; Hearing employee concerned is given the Certainly, such an exclusivist and fact include an actual hearing, it is not
opportunity to respond to the charge, absolutist interpretation is overly limited to a formal hearing only. In other
Perez vs. PT & T, G.R. No. 152048, April present his evidence or rebut the evidence restrictive. The "very nature of due words, the existence of an actual, formal
7, 2009, Corona, J. presented against him. The Labor Code process negates any concept of inflexible "trial-type" hearing, although preferred, is
provision prevails over the implementing procedures universally applicable to every not absolutely necessary to satisfy the
FACTS: Felix B. Perez and Amante G. rule under the time-honored doctrine that imaginable situation." employee’s right to be heard.
Doria were employed by Philippine in case of conflict, the law prevails over
Telegraph and Telephone Company as the administrative regulations The standard for the hearing The jurisprudence cited by the
shipping clerk and supervisor respectively. implementing it. The authority to requirement, ample opportunity, is SC recognizes that the employer may
Acting on an alleged unsigned letter promulgate implementing rules proceeds couched in general language revealing the provide an employee with ample
regarding anomalous transactions at the from the law itself. legislative intent to give some degree of opportunity to be heard and defend
Shipping Section, respondents formed a flexibility or adaptability to meet the himself with the assistance of a
special audit team to investigate the Article 277(b) of the Labor Code peculiarities of a given situation. To confine representative or counsel in ways other
matter. It was discovered that the Shipping provides that, in cases of termination for a it to a single rigid proceeding such as a than a formal hearing. The employee can
Section jacked up the value of the freight just cause, an employee must be given formal hearing will defeat its spirit. be fully afforded a chance to respond to
costs for goods shipped and that the "ample opportunity to be heard and to Significantly, Section 2(d), Rule I of the the charges against him, adduce his
duplicates of the shipping documents defend himself." Thus, the opportunity to Implementing Rules of Book VI of the evidence or rebut the evidence against
allegedly showed traces of tampering, be heard afforded by law to the employee Labor Code itself provides that the so- him through a wide array of methods,
alteration and superimposition. Perez and is qualified by the word "ample" which called standards of due process outlined verbal or written.
Doria were placed under preventive ordinarily means "considerably more than therein shall be observed "substantially,"
suspension for 30 days which was adequate or sufficient." In this regard, the not strictly. This is a recognition that while NOTES: Summary of principles:
extended for 15 days twice. Eventually, phrase "ample opportunity to be heard" a formal hearing or conference is ideal, it (a) "ample opportunity to be heard" means
they were dismissed. Hence, they filed a can be reasonably interpreted as is not an absolute, mandatory or exclusive any meaningful opportunity (verbal or
complaint for illegal dismissal and illegal extensive enough to cover actual hearing avenue of due process. written) given to the employee to answer
suspension. The Labor Arbiter found that or conference. To this extent, Section 2(d), the charges against him and submit
there was illegal dismissal and Rule I of the Implementing Rules of Book An employee’s right to be heard evidence in support of his defense,
suspension. The NLRC reversed the said VI of the Labor Code is in conformity with in termination cases under Article 277(b) whether in a hearing, conference or some
decision. Upon appeal to CA, the latter Article 277(b). as implemented by Section 2(d), Rule I of other fair, just and reasonable way. (b) a
affirmed the NLRC but found that Perez the Implementing Rules of Book VI of the formal hearing or conference becomes
mandatory only when requested by the confused with the manner in which such cannot be regarded as an "absurdity and hearing or conference be held. In such a
employee in writing or substantial right is exercised. Dismissal from superfluity." case, the conduct of a formal hearing or
evidentiary disputes exist or a company employment must not be effected conference becomes mandatory, just as it
rule or practice requires it, or when similar abusively and oppressively as it affects Lopez vs. Alturas, G.R. No. 191008, is where there exist substantial evidentiary
circumstances justify it. (c) the "ample one's person and property. Thus, Batas April 11, 2011, Carpio-Morales, J. disputes or where company rules or
opportunity to be heard" standard in the Pambansa Blg. 130, amending paragraph practice requires an actual hearing as part
Labor Code prevails over the "hearing or (b) of Article 278 of the Labor Code, Doctrine. It is, however, with of employment pretermination procedure.
conference" requirement in the imposed as a condition sine qua non that respect to the appellate court’s finding that
implementing rules and regulations. any termination of employment under the petitioner was not afforded procedural due Petitioner was given the
grounds provided in Article 283 must be process that the Court deviates from. opportunity to explain his side when he
Wallem Maritime vs. NLRC, G.R. No. done only after notice and formal Procedural due process has been defined was informed of the charge against him
108433, October 15, 1996, Romero, J. investigation have been accorded the as giving an opportunity to be heard and required to submit his written
supposed errant worker. before judgment is rendered. In explanation with which he complied. That
FACTS: Joselito V. Macatuno was hired termination cases, Perez v. Philippine there might have been no hearing is of no
by Wallem Shipmanagement Limited thru That the workers involved in the Telegraph and Telephone Company, moment, for as Autobus Workers’ Union v.
its local manning agent, Wallem Maritime incident were "mustered" or convened illuminates on the correct proceedings to NLRC holds:
Services, Inc., as an able-bodied seaman thereafter by the captain is be followed therein in order to comply with
on board the M/T Fortuna, a vessel of inconsequential. It is insufficient the due process requirement: This Court has held that there
Liberian registry. While the vessel was compliance with the law which requires, as is no violation of due process even if no
berthed at the port of Kawasaki, Japan, an a vital component of due process, The above rulings are a clear hearing was conducted, where the party
altercation took place between Macatuno observance of the twin requirements of recognition that the employer may provide was given a chance to explain his side of
and fellow Filipino crew member, Julius E. notice and hearing before dismissing an an employee with ample opportunity to be the controversy. What is frowned upon is
Gurimbao, on the one hand, and a employee. As regards the notice heard and defend himself with the the denial of the opportunity to be heard.
cadet/apprentice officer of the same requirement, the Court has stated: On the assistance of a representative or counsel
nationality as the captain of the vessel on issue of due process . . . , the law requires in ways other than a formal hearing. The Parenthetically, the Court finds
the other hand. The master entered the the employer to furnish the worker whose employee can be fully afforded a chance that it was error for the NLRC to opine that
incident in the tanker's logbook. As a employment is sought to be terminated a to respond to the charges against him, petitioner should have been afforded
consequence, Macatuno and Gurimbao written notice containing a statement of adduce his evidence or rebut the evidence counsel or advised of the right to counsel.
were repatriated to the Philippines where the cause or causes for termination and against him through a wide array of The right to counsel and the assistance of
they lost no time in lodging separate shall afford him ample opportunity to be methods, verbal or written. one in investigations involving termination
complaints for illegal dismissal with the heard and to defend himself with the cases is neither indispensable nor
POEA. POEA Deputy Administrator Imson assistance of a representative. After receiving the first notice mandatory, except when the employee
found the dismissal illegal. The NRLC Specifically, the employer must furnish the apprising him of the charges against him, himself requests for one or that he
affirmed the POEA. Hence, the case worker with two (2) written notices before the employee may submit a written manifests that he wants a formal hearing
reached the SC. termination of employment can be legally explanation (which may be in the form of a on the charges against him. In petitioner’s
effected: (a) notice which apprises the letter, memorandum, affidavit or position case, there is no showing that he
ISSUE: Whether or not procedural due employee of the particular acts or paper) and offer evidence in support requested for a formal hearing to be
process is complied with in this case. omissions for which his dismissal is thereof, like relevant company records conducted or that he be assisted by
sought; and (b) the subsequent notice (such as his 201 file and daily time counsel. Verily, since he was furnished a
HELD: No. Petitioners' failure to which informs the employee of the records) and the sworn statements of his second notice informing him of his
substantiate the grounds for a valid employer's decision to dismiss him. witnesses. For this purpose, he may dismissal and the grounds therefor, the
dismissal was aggravated by the manner prepare his explanation personally or with twin-notice requirement had been
by which the employment of private Neither is the ship captain's having the assistance of a representative or complied with to call for a deletion of the
respondent was terminated. It must be witnessed the altercation an excuse for counsel. He may also ask the employer to appellate court’s award of nominal
borne in mind that the right of an employer dispensing with the notice and hearing provide him copy of records material to his damages to petitioner.
to dismiss an employee is to be requirements. Serving notice to private defense. His written explanation may
distinguished from and should not be respondent under the circumstances also include a request that a formal
 charge against them; (2) present evidence In International Catholic Migration the former before hiring him permanently.
iii. Contents of a valid notice in support of their defenses; and (3) rebut Commission v. NLRC, we have elucidated x x x.
the evidence presented against them by what probationary employment entails:
King of Kings vs. Mamac, G.R. No. the management. During the hearing or Within the limited legal six-month
166208, June 29, 2007, Velasco, Jr., J. conference, the employees are given the x x x. A probationary employee, probationary period, probationary
chance to defend themselves personally, as understood under Article 282 (now employees are still entitled to security of
Doctrine. As provided in Art. 277 with the assistance of a representative or Article 281) of the Labor Code, is one who tenure. It is expressly provided in the
of the Labor Code and the implementing counsel of their choice. Moreover, this is on trial by an employer during which the afore-quoted Article 281 that a
rule, the following should be considered in conference or hearing could be used by employer determines whether or not he is probationary employee may be terminated
terminating the services of employees the parties as an opportunity to come to an qualified for permanent employment. A only on two grounds: (a) for just cause, or
based on just causes under Art. 282: (1.) amicable settlement. (3.) After probationary appointment is made to (b) when he fails to qualify as a regular
The first written notice to be served on the determining that termination of afford the employer an opportunity to employee in accordance with reasonable
employees should contain the specific employment is justified, the employers observe the fitness of a probationer while standards made known by the employer to
causes or grounds for termination against shall serve the employees a written notice at work, and to ascertain whether he will the employee at the time of his
them, and a directive that the employees of termination indicating that: (1) all become a proper and efficient employee. engagement.
are given the opportunity to submit their circumstances involving the charge The word "probationary," as used to
written explanation within a reasonable against the employees have been describe the period of employment, PDI invokes the second ground
period. "Reasonable opportunity" under considered; and (2) grounds have been implies the purpose of the term or period under the premises. In claiming that it had
the Omnibus Rules means every kind of established to justify the severance of their but not its length. adequately apprised Magtibay of the
assistance that management must accord employment. reasonable standards against which his
to the employees to enable them to Being in the nature of a "trial performance will be gauged for purposes
prepare adequately for their defense. This period" the essence of a probationary of permanent employment, PDI cited the
should be construed as a period of at least iv. Terminating a probationary period of employment fundamentally lies in one-on-one seminar between Magtibay
five (5) calendar days from receipt of the employee the purpose or objective sought to be and its Personnel Assistant, Ms. Rachel
notice to give the employees an attained by both the employer and the Isip-Cuzio. PDI also pointed to Magtibay’s
opportunity to study the accusation against Phil. Daily Inquier vs. Magtibay, 528 employee during said period. The length of direct superior, Benita del Rosario, who
them, consult a union official or lawyer, SCRA 355, G.R. No. 164532, July 24, time is immaterial in determining the diligently briefed him about his
gather data and evidence, and decide on 2007, Garcia, J. correlative rights of both in dealing with responsibilities in PDI. These factual
the defenses they will raise against the each other during said period. While the assertions were never denied nor
complaint. Moreover, in order to enable Doctrine. Art. 281. Probationary employer, as stated earlier, observes the controverted by Magtibay. Neither did he
the employees to intelligently prepare their employment. ̶ Probationary employment fitness, propriety and efficiency of a belie the existence of a specific rule
explanation and defenses, the notice shall not exceed six (6) months from the probationer to ascertain whether he is prohibiting unauthorized persons from
should contain a detailed narration of the date the employee started working, unless qualified for permanent employment, the entering the telephone operator’s booth
facts and circumstances that will serve as it is covered by an apprenticeship probationer, on the other, seeks to prove and that he violated that prohibition. This
basis for the charge against the agreement stipulating a longer period. The to the employer, that he has the notwithstanding, the NLRC and the CA
employees. A general description of the services of an employee who has been qualifications to meet the reasonable proceeded nonetheless to rule that the
charge will not suffice. Lastly, the notice engaged on a probationary basis may be standards for permanent employment. records of the case are bereft of any
should specifically mention which terminated for a just cause or when he evidence showing that these rules and
company rules, if any, are violated and/or fails to qualify as a regular employee in It is well settled that the employer regulations form part of the so-called
which among the grounds under Art. 282 accordance with reasonable standards has the right or is at liberty to choose who company standards.
is being charged against the employees. made known by the employer to the will be hired and who will be denied
(2.) After serving the first notice, the employee at the time of his engagement. employment. In that sense, it is within the We do not agree with the
employers should schedule and conduct a An employee who is allowed to work after exercise of the right to select his appellate court when it cleared the NLRC
hearing or conference wherein the a probationary period shall be considered employees that the employer may set or of commission of grave abuse of discretion
employees will be given the opportunity to: a regular employee. fix a probationary period within which the despite the latter’s disregard of clear and
(1) explain and clarify their defenses to the latter may test and observe the conduct of convincing evidence that there were
reasonable standards made known by PDI
to Magtibay during his probationary nature of a probationary employment, the evidence establishing the legal termination (d) In all cases of probationary
employment. It is on record that Magtibay employee knows from the very start that of Magtibay’s probationary employment employment, the employer shall make
committed obstinate infractions of he will be under close observation and his and rendered judgment grossly and known to the employee the standards
company rules and regulations, which in performance of his assigned duties and directly contradicting such clear evidence, under which he will qualify as a regular
turn constitute sufficient manifestations of functions would be under continuous the NLRC commits grave abuse of employee at the time of his engagement.
his inadequacy to meet reasonable scrutiny by his superiors. It is in apprising discretion amounting to lack or excess of Where no standards are made known to
employment norms. The suggestion that him of the standards against which his jurisdiction. It was, therefore, reversible the employee at that time, he shall be
Magtibay ought to have been made to performance shall be continuously error on the part of the appellate court not deemed a regular employee.
understand during his briefing and assessed where due process regarding to annul and set aside such void judgment
orientation that he is expected to obey and the second ground lies, and not in notice of the NLRC. In other words, the employer is
comply with company rules and and hearing as in the case of the first made to comply with two (2) requirements
regulations strains credulity for ground. Abbot Laboratories vs. Alcaraz, G.R. when dealing with a probationary
acceptance. The CA’s observation that No. 192571, July 23, 2013, Perlas- employee: first, the employer must
"nowhere can it be found in the list of Even if perhaps he wanted to, Bernabe, J. communicate the regularization standards
Basic Responsibility and Specific Duties Magtibay cannot deny – as he has not to the probationary employee; and second,
and Responsibilities of respondent denied – PDI’s assertion that he was duly Doctrine. A probationary the employer must make such
Magtibay that he has to abide by the apprised of the employment standards employee, like a regular employee, enjoys communication at the time of the
duties, rules and regulations that he has expected of him at the time of his security of tenure. However, in cases of probationary employee’s engagement. If
allegedly violated" is a strained probationary employment when he probationary employment, aside from just the employer fails to comply with either,
rationalization of an unacceptable conduct underwent a one-on-one orientation with or authorized causes of termination, an the employee is deemed as a regular and
of an employee. Common industry PDI’s personnel assistant, Ms. Rachel Isip- additional ground is provided under Article not a probationary employee.
practice and ordinary human experience Cuzio. Neither has he denied nor rebutted 295 of the Labor Code, i.e., the
do not support the CA’s posture. All PDI’s further claim that his direct superior, probationary employee may also be Keeping with these rules, an
employees, be they regular or Benita del Rosario, briefed him regarding terminated for failure to qualify as a employer is deemed to have made known
probationary, are expected to comply with his responsibilities in PDI. regular employee in accordance with the the standards that would qualify a
company-imposed rules and regulations, reasonable standards made known by the probationary employee to be a regular
else why establish them in the first place. Lest it be overlooked, Magtibay employer to the employee at the time of employee when it has exerted reasonable
Probationary employees unwilling to abide had previously worked for PDI as the engagement. Thus, the services of an efforts to apprise the employee of what he
by such rules have no right to expect, telephone operator from February 7, 1995 employee who has been engaged on is expected to do or accomplish during the
much less demand, permanent to July 31, 1995 as a contractual probationary basis may be terminated for trial period of probation. This goes without
employment. We, therefore find sufficient employee. Thus, the Court entertains no any of the following: (a) a just or (b) an saying that the employee is sufficiently
factual and legal basis, duly established by doubt that when PDI took him in on authorized cause; and (c) when he fails to made aware of his probationary status as
substantial evidence, for PDI to legally September 21, 1995, Magtibay was qualify as a regular employee in well as the length of time of the probation.
terminate Magtibay’s probationary already very much aware of the level of accordance with reasonable standards
employment effective upon the end of the competency and professionalism PDI prescribed by the employer. The exception to the foregoing is
6-month probationary period. wanted out of him for the entire duration of when the job is self-descriptive in nature,
his probationary employment. Corollary thereto, Section 6(d), for instance, in the case of maids, cooks,
Unlike under the first ground for Rule I, Book VI of the Implementing Rules drivers, or messengers. Also, in Aberdeen
the valid termination of probationary PDI was only exercising its of the Labor Code provides that if the Court, Inc. v. Agustin, it has been held that
employment which is for just cause, the statutory hiring prerogative when it refused employer fails to inform the probationary the rule on notifying a probationary
second ground does not require notice to hire Magtibay on a permanent basis employee of the reasonable standards employee of the standards of
and hearing. Due process of law for this upon the expiration of the six-month upon which the regularization would be regularization should not be used to
second ground consists of making the probationary period. This was established based on at the time of the engagement, exculpate an employee who acts in a
reasonable standards expected of the during the proceedings before the labor then the said employee shall be deemed a manner contrary to basic knowledge and
employee during his probationary period arbiter and borne out by the records and regular employee, viz.: common sense in regard to which there is
known to him at the time of his the pleadings before the Court. When the no need to spell out a policy or standard to
probationary employment. By the very NLRC disregarded the substantial be met. In the same light, an employee’s
failure to perform the duties and 2005. Stated therein were the reasons for his hiring. Toussaint, 292 N.W .2d at 892.
responsibilities which have been clearly In fine, the Court rules that her termination, i.e., that after proper The principle is akin to estoppel. Once an
made known to him constitutes a Alcaraz’s status as a probationary evaluation, Abbott determined that she employer establishes an express
justifiable basis for a probationary employee and her consequent dismissal failed to meet the reasonable standards personnel policy and the employee
employee’s non-regularization. must stand. Consequently, in holding that for her regularization considering her lack continues to work while the policy remains
Alcaraz was illegally dismissed due to her of time and people management and in effect, the policy is deemed an implied
A punctilious examination of the status as a regular and not a probationary decision-making skills, which are contract for so long as it remains in effect.
records reveals that Abbott had indeed employee, the Court finds that the NLRC necessary in the performance of her If the employer unilaterally changes the
complied with the above-stated committed a grave abuse of discretion. functions as Regulatory Affairs policy, the terms of the implied contract are
requirements. This conclusion is largely Manager. Undeniably, this written notice also thereby changed.
impelled by the fact that Abbott clearly To elucidate, records show that sufficiently meets the criteria set forth
conveyed to Alcaraz her duties and the NLRC based its decision on the above, thereby legitimizing the cause and Hence, given such nature,
responsibilities as Regulatory Affairs premise that Alcaraz’s receipt of her job manner of Alcaraz’s dismissal as a company personnel policies create an
Manager prior to, during the time of her description and Abbott’s Code of Conduct probationary employee under the obligation on the part of both the employee
engagement, and the incipient stages of and Performance Modules was not parameters set by the Labor Code. and the employer to abide by the same.
her employment. equivalent to being actually informed of
the performance standards upon which Nonetheless, despite the Records show that Abbott’s
Considering the totality of the she should have been evaluated on. It, existence of a sufficient ground to PPSE procedure mandates, inter alia, that
circumstances, it cannot, therefore, be however, overlooked the legal implication terminate Alcaraz’s employment and the job performance of a probationary
doubted that Alcaraz was well-aware that of the other attendant circumstances as Abbott’s compliance with the Labor Code employee should be formally reviewed and
her regularization would depend on her detailed herein which should have termination procedure, it is readily discussed with the employee at least
ability and capacity to fulfill the warranted a contrary finding that Alcaraz apparent that Abbott breached its twice: first on the third month and second
requirements of her position as Regulatory was indeed a probationary and not a contractual obligation to Alcaraz when it on the fifth month from the date of
Affairs Manager and that her failure to regular employee – more particularly the failed to abide by its own procedure in employment. Abbott is also required to
perform such would give Abbott a valid fact that she was well-aware of her duties evaluating the performance of a come up with a Performance Improvement
cause to terminate her probationary and responsibilities and that her failure to probationary employee. Plan during the third month review to
employment. adequately perform the same would lead bridge the gap between the employee’s
to her non-regularization and eventually, Veritably, a company policy performance and the standards set, if
Verily, basic knowledge and her termination. partakes of the nature of an implied any. In addition, a signed copy of the
common sense dictate that the adequate contract between the employer and PPSE form should be submitted to
performance of one’s duties is, by and of A different procedure is applied employee. In Parts Depot, Inc. v. Abbott’s HRD as the same would serve as
itself, an inherent and implied standard for when terminating a probationary Beiswenger, it has been held that: basis for recommending the confirmation
a probationary employee to be employee; the usual two-notice rule does Employer statements of policy . . . can or termination of the probationary
regularized; such is a regularization not govern. Section 2, Rule I, Book VI of give rise to contractual rights in employees employment.
standard which need not be literally the Implementing Rules of the Labor Code without evidence that the parties mutually
spelled out or mapped into technical states that "if the termination is brought agreed that the policy statements would In this case, it is apparent that
indicators in every case. In this regard, it about by the x x x failure of an employee create contractual rights in the employee, Abbott failed to follow the above-stated
must be observed that the assessment of to meet the standards of the employer in and, hence, although the statement of procedure in evaluating Alcaraz. For one,
adequate duty performance is in the case of probationary employment, it shall policy is signed by neither party, can be there lies a hiatus of evidence that a
nature of a management prerogative be sufficient that a written notice is served unilaterally amended by the employer signed copy of Alcaraz’s PPSE form was
which when reasonably exercised – as the employee, within a reasonable time without notice to the employee, and submitted to the HRD. It was not even
Abbott did in this case – should be from the effective date of termination." contains no reference to a specific shown that a PPSE form was completed to
respected. This is especially true of a employee, his job description or formally assess her performance. Neither
managerial employee like Alcaraz who As the records show, Alcaraz's compensation, and although no reference was the performance evaluation discussed
was tasked with the vital responsibility of dismissal was effected through a letter was made to the policy statement in pre- with her during the third and fifth months of
handling the personnel and important dated May 19, 2005 which she received employment interviews and the employee her employment. Nor did Abbott come up
matters of her department. on May 23, 2005 and again on May 27, does not learn of its existence until after with the necessary Performance
Improvement Plan to properly gauge Court is wont to uphold the dismissal of Unless there is a restraining order issued, A scrutiny of the circumstances,
Alcaraz’s performance with the set Alcaraz because a valid cause exists, the it is ministerial upon the LA to implement however, will show that the delay in
company standards. payment of nominal damages on account the order of reinstatement. The unjustified reinstating the respondent was not due to
of Abbott’s contractual breach is warranted refusal of the employer to reinstate a the unjustified refusal of PAL to abide by
While it is Abbott’s management in accordance with Article 2221 of the Civil dismissed employee entitles him to the order but because of the constraints of
prerogative to promulgate its own Code. payment of his salaries effective from the corporate rehabilitation. It bears noting
company rules and even subsequently time the employer failed to reinstate him. that a year before the respondent filed his
amend them, this right equally demands Anent the proper amount of complaint for illegal dismissal on June 25,
that when it does create its own policies damages to be awarded, the Court In Garcia, however, the Court 1999, PAL filed a petition for approval of
and thereafter notify its employee of the observes that Alcaraz’s dismissal somehow relaxed the rule by taking into rehabilitation plan and for appointment of a
same, it accords upon itself the obligation proceeded from her failure to comply with consideration the cause of delay in rehabilitation receiver with the SEC. On
to faithfully implement them. Indeed, a the standards required for her executing the order of reinstatement of the June 23, 1998, the SEC appointed an
contrary interpretation would entail a regularization. As such, it is undeniable LA. It was declared, thus: Interim Rehabilitation Receiver. Thereafter,
disharmonious relationship in the work that the dismissal process was, in effect, the SEC issued an Order dated July 1,
place for the laborer should never be initiated by an act imputable to the After the labor arbiter’s decision 1998, suspending all claims for payment
mired by the uncertainty of flimsy rules in employee, akin to dismissals due to just is reversed by a higher tribunal, the against PAL.
which the latter’s labor rights and duties causes under Article 296 of the Labor employee may be barred from collecting The inopportune event of PAL’s
would, to some extent, depend. Code. Therefore, the Court deems it the accrued wages, if it is shown that the entering rehabilitation receivership justifies
appropriate to fix the amount of nominal delay in enforcing the reinstatement the delay or failure to comply with the
In this light, while there lies due damages at the amount of P30,000.00, pending appeal was without fault on the reinstatement order of the LA. Thus, in
cause to terminate Alcaraz’s probationary consistent with its rulings in both Agabon part of the employer. Garcia, the Court held:
employment for her failure to meet the and Jaka.
standards required for her regularization, The test is two-fold: (1) there It is settled that upon
and while it must be further pointed out 2. Failure to comply must be actual delay or the fact that the appointment by the SEC of a rehabilitation
that Abbott had satisfied its statutory duty with the requirements of due process order of reinstatement pending appeal was receiver, all actions for claims before any
to serve a written notice of termination, the not executed prior to its reversal; and (2) court, tribunal or board against the
fact that it violated its own company 2.1. the delay must not be due to the corporation shall ipso jure be suspended.
procedure renders the termination of Substantive employer’s unjustified act or omission. If As stated early on, during the pendency of
Alcaraz’s employment procedurally infirm, the delay is due to the employer’s petitioners’ complaint before the Labor
warranting the payment of nominal 2.1.1. unjustified refusal, the employer may still Arbiter, the SEC placed respondent under
damages. Reinstatement, Doctrine of Strained be required to pay the salaries an Interim Rehabilitation Receiver. After
Relations notwithstanding the reversal of the Labor the Labor Arbiter rendered his decision,
Evidently, the sanctions imposed Arbiter’s decision. the SEC replaced the Interim
in both Agabon and Jaka proceed from the PAL vs. Paz, G.R. No. 192924, Rehabilitation Receiver with a Permanent
necessity to deter employers from future November 26, 2014, Reyes, J. It is clear from the records that Rehabilitation Receiver.
violations of the statutory due process PAL failed to reinstate the respondent
rights of employees. In similar regard, the Doctrine. The rule is that the pending appeal of the LA decision to the Case law recognizes that unless
Court deems it proper to apply the same employee is entitled to reinstatement NLRC. It can be recalled that the LA there is a restraining order, the
principle to the case at bar for the reason salaries notwithstanding the reversal of the rendered the decision ordering the implementation of the order of
that an employer’s contractual breach of LA decision granting him said relief. In reinstatement of the respondent on March reinstatement is ministerial and mandatory.
its own company procedure – albeit not Roquero vs. Philippine Airlines, the Court 5, 2001. And, despite the self-executory This injunction or suspension of claims by
statutory in source – has the parallel effect underscored that it is obligatory on the part nature of the order of reinstatement, the legislative fiat partakes of the nature of a
of violating the laborer’s rights. Suffice it to of the employer to reinstate and pay the respondent nonetheless secured a partial restraining order that constitutes a legal
state, the contract is the law between the wages of the dismissed employee during writ of execution on May 25, 2001. Even justification for respondent's non-
parties and thus, breaches of the same the period of appeal until reversal by the then, the respondent was not reinstated to compliance with the reinstatement order.
impel recompense to vindicate a right that higher court. This is so because the order his former position or even through payroll. Respondent's failure to exercise the
has been violated. Consequently, while the of reinstatement is immediately executory. alternative options of actual reinstatement
and payroll reinstatement was thus payment of claims during the execution Regulations of the Labor Code, the imposed a sanction for its failure to give a
justified. Such being the case, stage after the case had become final and dismissal of an employee must be for a formal notice and conduct an investigation
respondent's obligation to pay the salaries executory. just or authorized cause and after due as required by law before dismissing
pending appeal, as the normal effect of the process. petitioner from employment. Considering
non-exercise of the options, did not attach. Furthermore, the actions that are the circumstance of this case petitioner
suspended cover all claims against the The two requirements of this must indemnify the private respondent the
In light of the fact that PAL's corporation whether for damages founded legal provision are: (1.) The legality of the amount of P1,000.00. The measure of this
failure to comply with the reinstatement on a breach of contract of carriage, labor act of dismissal, that is, dismissal under award depends on the facts of each case
order was justified by the exigencies of cases, collection suits or any other claims the ground provided under Article 283 of and the gravity of the omission committed
corporation rehabilitation, the respondent of a pecuniary nature. No exception in the New Labor Code; and (2.) The legality by the employer.
may no longer claim salaries which he favor of labor claims is mentioned in the in the manner of dismissal, that is, with
should have received during the period law. due observance of the procedural Public respondent's finding that
that the LA decision ordering his requirements of Sections 2, 5, and 6 of petitioner was not afforded due process is
reinstatement is still pending appeal until it This Court’s adherence to the Batas Pambansa Blg. 130. correct but the Commission erred when it
was overturned by the NLRC. Thus, the above-stated rule has been resolute and awarded separation pay in the amount of
CA committed a reversible error in steadfast as evidenced by its oft-repeated While the Labor Code treats of P32,750.00. In the Pacific Mills, Inc. and
recognizing the respondent's right to application in a plethora of cases involving the nature and the remedies available with Wenphil cases, this Court merely awarded
collect reinstatement salaries albeit PAL, the most recent of which is Philippine regard to the first, such as: (a) P1,000.00 as penalty for non-observance
suspending its execution while PAL is still Airlines, Inc. v. Zamora. reinstatement to his former position of due process.
under corporate rehabilitation. without loss of seniority rights, and (b)
Since petitioners’ claim against payment of backwages corresponding to The Board of Directors,
Garcia vs. PAL, G.R. No. 164856, PAL is a money claim for their wages the period from his illegal dismissal up to composed of the individual private
January 20, 2009, Quisumbing, J. during the pendency of PAL’s appeal to the actual reinstatement, said Code does not respondents herein, has the power
NLRC, the same should have been deal at all with the second, that is, the granted by the Corporation Code to
Doctrine. Worth stressing, upon suspended pending the rehabilitation manner of dismissal, which is therefore, implement a reorganization of respondent
appointment by the SEC of a rehabilitation proceedings. The Labor Arbiter, the NLRC, governed exclusively by the Civil Code. college's offices, including the abolition of
receiver, all actions for claims against the as well as the Court of Appeals should various positions, since it is implied or
corporation pending before any court, have abstained from resolving petitioners’ In cases where there was a valid incidental to its power to conduct the
tribunal or board shall ipso jure be case for illegal dismissal and should ground to dismiss an employee but there regular business affairs of the corporation.
suspended. The purpose of the automatic instead have directed them to lodge their was non-observance of due process, this
stay of all pending actions for claims is to claim before PAL’s receiver. Court held that only a sanction must be The prerogative of management
enable the rehabilitation receiver to imposed upon the employer for failure to to conduct its own business affairs to
effectively exercise its/his powers free However, to still require give formal notice and to conduct an achieve its purposes cannot be denied.
from any judicial or extra-judicial petitioners at this time to re-file their labor investigation required by law before Management is at liberty, absent any
interference that might unduly hinder or claim against PAL under the peculiar dismissing the employee in consonance malice on its part, to abolish positions
prevent the rescue of the corporation. circumstances of the case – that their with jurisprudence. which it deems no longer necessary.
dismissal was eventually held valid with
More importantly, the suspension only the matter of reinstatement pending In Wenphil, we held: However, Cabigting vs. San Miguel Foods, Inc.,
of all actions for claims against the appeal being the issue – this Court deems the petitioner must nevertheless be held to G.R. No. 167706, November 5, 2009,
corporation embraces all phases of the it legally expedient to suspend the account for failure to extend to private Peralta, J.
suit, be it before the trial court or any proceedings in this case. respondent his right to an investigation
tribunal or before this Court. No other before causing his dismissal. The rule is Doctrine. Under the law and
action may be taken, including the Aurelio vs. NLRC, 221 SCRA 432, G.R. explicit as discussed above. The dismissal prevailing jurisprudence, an illegally
rendition of judgment during the state of No. 99034, April 12, 1993, Melo, J. of an employee must be for just or dismissed employee is entitled to
suspension. It must be stressed that what authorized cause and after due process. reinstatement as a matter of right.
are automatically stayed or suspended are Doctrine. Under Section 1, Rule Petitioner committed an infraction of the However, if reinstatement would only
the proceedings of a suit and not just the XIV of the Implementing Rules and second requirement. Thus, it must be exacerbate the tension and strained
relations between the parties, or where the or is a warehouseman of a non-profit of his employer and that it is likely that if note, the NLRC was categorical that no
relationship between the employer and the organization whose primary purpose is to reinstated, an atmosphere of antipathy such accommodation existed, to wit: On
employee has been unduly strained by facilitate and maximize voluntary gifts by and antagonism may be generated as to the argument that Cabigting was merely
reason of their irreconcilable differences, foreign individuals and organizations to the adversely affect the efficiency and accommodated by the respondent after
particularly where the illegally dismissed Philippines; or is a manager of its Energy productivity of the employee concerned. the closure of the Tacoma Warehouse, it,
employee held a managerial or key Equipment Sales. however, appears that no such
position in the company, it would be more Accordingly, this Court is of the accommodation existed. x x x
prudent to order payment of separation Obviously, the principle of opinion that both the LA and the CA based
pay instead of reinstatement. "strained relations" cannot be applied their conclusions on impression alone. It The doctrine of strained relations
indiscriminately. Otherwise, reinstatement bears to stress that reinstatement is the has been made applicable to cases where
In Globe-Mackay Cable and can never be possible simply because rule and, for the exception of strained the employee decides not to be reinstated
Radio Corporation vs. National Labor some hostility is invariably engendered relations to apply, it should be proved that and demands for separation pay. The
Relations Commission, this Court between the parties as a result of litigation. it is likely that if reinstated, an atmosphere same, however, does not apply to herein
discussed the limitations and qualifications That is human nature. of antipathy and antagonism would be petition, as petitioner is asking for his
for the application of the "strained generated as to adversely affect the reinstatement despite his illegal dismissal.
relations" principle, in this wise: Besides, no strained relations efficiency and productivity of the employee
should arise from a valid and legal act of concerned. However, both the LA and the Lastly, this Court takes note of
x x x If, in the wisdom of the asserting one's right; otherwise, an CA failed to state the basis for their finding the findings of fact of the NLRC that the
Court, there may be a ground or grounds employee who shall assert his right could that a strained relationship exists. position of inventory controller and
for non-application of the above-cited be easily separated from the service, by warehouseman is still existing up to
provision, this should be by way of merely paying his separation pay on the This Court shares petitioner’s date. Petitioner has been an inventory
exception, such as when the reinstatement pretext that his relationship with his view that the words allegedly imputing controller for so many years, and there
may be inadmissible due to ensuing employer had already become strained. malice and bad faith towards the should be no problem in ordering the
strained relations between the employer respondent cannot be made a basis for reinstatement with facility of a laborer,
and the employee. Moreover, Chief Justice Reynato denying his reinstatement. Respondent’s clerk, or other rank-and-file employee.
S. Puno, in his dissenting opinion in MGG perceived antipathy and antagonism is not
In such cases, it should be Marine Services, Inc. v. National Labor of such degree as would preclude In conclusion, it bears to stress
proved that the employee concerned Relations Commission, gives the following reinstatement of petitioner to his former that it is human nature that some hostility
occupies a position where he enjoys the suggestion in the application of the position. In addition, by themselves alone, will inevitably arise between parties as a
trust and confidence of his employer; and doctrine of strained relations: the words used by petitioner in his result of litigation, but the same does not
that it is likely that if reinstated, an pleadings are insufficient to prove the always constitute strained relations in the
atmosphere of antipathy and antagonism x x x At the very least, I suggest presence of strained relations. Thus, this absence of proof or explanation that such
may be generated as to adversely affect that, henceforth, we should require that Court finds that one should not fault indeed exists.
the efficiency and productivity of the the alleged "strained relationship" must be petitioner for his choice of words,
employee concerned. pleaded and proved if either the employer especially in light of overwhelming Bank of Lubao vs. Manabat, G.R. No.
or the employee does not want the evidence showing he was illegally 188722, February 1, 2012, Reyes, J.
A few examples will suffice to employment tie to remain. By making dismissed.
illustrate the Court's application of the "strained relationship" a triable issue of Doctrine. Article 279. Security of
above principle: where the employee is a fact before the Arbiter or the NLRC we will Moreover, the filing of the Tenure. - In cases of regular employment,
Vice-President for Marketing and, as such, eliminate rulings on "strained relationship" complaint by petitioner cannot be used as the employer shall not terminate the
enjoys the full trust and confidence of top based on mere impression alone. a basis for strained relations. As a rule, no services of an employee except for a just
management; or is the Officer-In-Charge strained relations should arise from a valid cause or when authorized by this Title. An
of the extension office of the bank where Based on the foregoing, in order and legal act asserting one’s employee who is unjustly dismissed
he works; or is an organizer of a union for the doctrine of strained relations to right. Likewise, respondent’s claim that it from work shall be entitled to
who was in a position to sabotage the apply, it should be proved that the was betrayed by petitioner, after several reinstatement without loss of seniority
union's efforts to organize the workers in employee concerned occupies a position accommodations it had extended to rights and other privileges and to his full
commercial and industrial establishments; where he enjoys the trust and confidence him, deserves scant consideration. On this backwages, inclusive of allowances, and
to his other benefits or their monetary grant of separation pay in lieu of Time and again, this Court has (Possible Bar Problem in Labor Law
equivalent computed from the time his reinstatement in favor of the respondent. recognized that strained relations between and Remedial Law)
compensation was withheld from him up to the employer and employee is an
the time of his actual reinstatement. First, it cannot be gainsaid that exception to the rule requiring actual Doctrine. Considering that the
the petitioner’s reinstatement to his former reinstatement for illegally dismissed judgment decreeing the computation of
Under the law and prevailing position would only serve to intensify the employees for the practical reason that the backwages up to the promulgation of the
jurisprudence, an illegally dismissed atmosphere of antipathy and antagonism already existing antagonism will only fester NLRC decision has long become final and
employee is entitled to reinstatement as a between the parties. Undoubtedly, the and deteriorate, and will only worsen with executory, the key question is whether a
matter of right. However, if reinstatement petitioner’s filing of various criminal possible adverse effects on the parties, if recomputation of backwages up to the
would only exacerbate the tension and complaints against the respondent for we shall compel reinstatement; thus, the date of the actual reinstatement of Lim
strained relations between the parties, or qualified theft and the subsequent filing by use of a viable substitute that protects the would violate the principle of immutability
where the relationship between the the latter of the complaint for illegal interests of both parties while ensuring of judgments.
employer and the employee has been dismissal against the latter, taken together that the law is respected.
unduly strained by reason of their with the pendency of the instant case for The rule is that it is the
irreconcilable differences, particularly more than six years, had caused strained 2.1.2. dispositive portion that categorically states
where the illegally dismissed employee relations between the parties. Backwages the rights and obligations of the parties to
held a managerial or key position in the the dispute as against each other. Thus, it
company, it would be more prudent to Second, considering that the is the dispositive portion that must be
order payment of separation pay instead respondent’s former position as bank 2.1.2.1. Basis/Rationale enforced to ensure the validity of the
of reinstatement. encoder involves the handling of accounts execution. That a judgment should be
of the depositors of the Bank of Lubao, it Bustamante vs. NLRC, 265 SCRA 61, implemented according to the terms of its
Under the doctrine of strained would not be equitable on the part of the G.R. No. 111651, March 15, 1996, dispositive portion is a long and well-
relations, the payment of separation pay is petitioner to be ordered to maintain the Padilla, J. established rule. A companion to this rule
considered an acceptable alternative to former in its employ since it may only is the principle of immutability of final
reinstatement when the latter option is no inspire vindictiveness on the part of the Doctrine. Reliance by public judgments. Save for recognized
longer desirable or viable. On one hand, respondent. respondent on the case of Manila Electric exceptions, a final judgment may no
such payment liberates the employee from Company vs. NLRC is misplaced. In that longer be altered, amended or modified,
what could be a highly oppressive work Third, the refusal of the case, the Court ordered the reinstatement even if the alteration, amendment or
environment. On the other hand, it respondent to be re-admitted to work is in of an employee, without backwages modification is meant to correct what is
releases the employer from the grossly itself indicative of the existence of strained because, although there was a valid cause perceived to be an erroneous conclusion
unpalatable obligation of maintaining in its relations between him and the petitioner. for dismissal, the penalty was too severe of fact or law and regardless of what court
employ a worker it could no longer trust. In the case of Lagniton, Sr. v. National for an employee who had rendered service renders it. Any attempt to insert, change or
Labor Relations Commission, the Court for an uninterrupted period of twenty (20) add matters not clearly contemplated in
In such cases, it should be held that the refusal of the dismissed years with two commendations for the dispositive portion violates the rule on
proved that the employee concerned employee to be re-admitted is constitutive honesty. In the case at bar, there is no immutability of judgments.
occupies a position where he enjoys the of strained relations: It appears that valid cause for dismissal. The employees
trust and confidence of his employer; and relations between the petitioner and the (petitioners) have not performed any act to The cases of Session Delights
that it is likely that if reinstated, an complainants have been so strained that warrant termination of their employment. Ice Cream and Fast Foods v. Court of
atmosphere of antipathy and antagonism the complainants are no longer willing to Consequently, petitioners are entitled to Appeals and Nacar v. Gallery Frames
may be generated as to adversely affect be reinstated. As such reinstatement their full backwages and other benefits shed much light on the apparent
the efficiency and productivity of the would only exacerbate the animosities that from the time their compensation was discrepancy in the case at hand. As in the
employee concerned. have developed between the parties, the withheld from them up to the time of their present case, both involve labor cases
public respondents were correct in actual reinstatement. finding that the employees therein were
Here, we agree with the CA that ordering instead the grant of separation illegally dismissed. At the LA level, in
the relations between the parties had been pay to the dismissed employees in the Lim vs. HMR Philippines, G.R. No. awarding backwages, a precise
already strained thereby justifying the interest of industrial peace. 201483, August 4, 2014, Mendoza, J. computation was provided from the time of
illegal dismissal up to the promulgation of
the LA decision. Additionally, the awards of separation pay in lieu of The petitioner appropriately To illustrate these points, had the
dispositive portion of the LA decision in reinstatement, backwages, attorney’s fees, sought to nullify the NLRC decision on case involved a pure money claim for a
Nacar also made a declaration that and legal interests. jurisdictional grounds through a timely filed specific sum (e.g. salary for a specific
separation pay in lieu of reinstatement be Rule 65 petition for certiorari. The CA period) or a specific benefit (e.g. 13th
"computed only up to promulgation of this The second part is the decision, finding that NLRC exceeded its month pay for a specific year) made by a
decision." The LA decisions in these cases computation of the awards made. On its authority in affirming the payment of 13th former employee, the labor arbiter’s
were affirmed by the NLRC and the CA face, the computation the labor arbiter month pay and indemnity, lapsed to finality computation would admittedly have
and subsequently became final and made shows that it was time-bound as can and was subsequently returned to the continuing currency because the sum is
executory. At the execution stage, the be seen from the figures used in the labor arbiter of origin for execution. specific and any variation may only be on
computation of backwages came into computation. This part, being merely a the interests that may run from the finality
issue. computation of what the first part of the It was at this point that the of the decision ordering the payment of the
decision established and declared, can, by present case arose. Focusing on the core specific sum.
Session Delights made clear that its nature, be recomputed. This is the part, illegal dismissal portion of the original
a case for illegal dismissal is one that too, that the petitioner now posits should labor arbiter’s decision, the implementing In contrast with a ruling on a
relates to status, where the decision or no longer be re-computed because the labor arbiter ordered the award specific pure money claim, is a claim that
ruling is essentially declaratory of the computation is already in the labor recomputed; he apparently read the relates to status (as in this case, where the
status and of the rights, obligations and arbiter’s decision that the CA had affirmed. figures originally ordered to be paid to be claim is the legality of the termination of
monetary consequences that flow from the The public and private respondents, on the the computation due had the case been the employment relationship). In this type
declared status, such as, the payment of other hand, posit that a recomputation is terminated and implemented at the labor of cases, the decision or ruling is
separation pay and backwages. In necessary because the relief in an illegal arbiter’s level. Thus, the labor arbiter essentially declaratory of the status and of
execution, what is primarily implemented dismissal decision goes all the way up to recomputed the award to include the the rights, obligations and monetary
is the declaratory finding on the status and reinstatement if reinstatement is to be separation pay and the backwages due up consequences that flow from the declared
the rights and obligations of the parties made, or up to the finality of the decision, to the finality of the CA decision that fully status (in this case, the payment of
therein; the arising monetary if separation pay is to be given in lieu of terminated the case on the merits. separation pay and backwages and
consequences from the declaration only reinstatement. Unfortunately, the labor arbiter’s approved attorney’s fees when illegal dismissal is
follow as component of the parties’ rights xxx computation went beyond the finality of the found). When this type of decision is
and obligations. The precise amount of Clearly implied from this original CA decision (July 29, 2003) and included executed, what is primarily implemented is
backwages should ideally be stated in the computation is its currency up to the as well the payment for awards the final the declaratory finding on the status and
final decision; otherwise, the matter is for finality of the labor arbiter’s decision. As CA decision had deleted – specifically, the the rights and obligations of the parties
handling and computation by the LA of we noted above, this implication is proportionate 13th month pay and the therein; the arising monetary
origin as the labor official charged with the apparent from the terms of the indemnity awards. Hence, the CA issued consequences from the declaration only
implementation of decisions before the computation itself, and no question would the decision now questioned in the present follow as component of the parties’ rights
NLRC. have arisen had the parties terminated the petition. and obligations.
case and implemented the decision at that
The Court’s disquisition in point. We see no error in the CA In the present case, the CA
Session Delights, also referenced with decision confirming that a recomputation is confirmed that indeed an illegal dismissal
approval in Nacar, is enlightening: However, the petitioner disagreed necessary as it essentially considered the had taken place, so that separation pay in
with the labor arbiter’s findings on all labor arbiter’s original decision in lieu of reinstatement and backwages
A source of misunderstanding in counts – i.e., on the finding of illegality as accordance with its basic component parts should be paid. How much that separation
implementing the final decision in this case well as on all the consequent awards as we discussed above. To reiterate, the pay would be, would ideally be stated in
proceeds from the way the original labor made. Hence, the petitioner appealed the first part contains the finding of illegality the final CA decision; if not, the matter is
arbiter framed his decision. The decision case to the NLRC which, in turn, affirmed and its monetary consequences; the for handling and computation by the labor
consists essentially of two parts. The first the labor arbiter’s decision. By law, the second part is the computation of the arbiter of origin as the labor official
is that part of the decision that cannot now NLRC decision is final, reviewable only by awards or monetary consequences of the charged with the implementation of
be disputed because it has been the CA on jurisdictional grounds. illegal dismissal, computed as of the time decisions before the NLRC.
confirmed with finality. This is the finding of of the labor arbiter’s original decision. xxx
the illegality of the dismissal and the
 Consistent with what we Although the NLRC decision in alteration or amendment of the final In Equitable Banking Corporation
discussed above, we hold that under the the present case did not provide a precise decision being implemented as the illegal v. Sadac, the Court held that although
terms of the decision under execution, no computation, the principles enunciated in dismissal ruling stands. Thus, in the Article 279 of the Labor Code mandates
essential change is made by a re- Session Delights still equally apply. In present case, a computation of backwages that an employee’s full backwages be
computation as this step is a necessary Session Delights, the computation of the until actual reinstatement is not a violation inclusive of allowances and other benefits,
consequence that flows from the nature of LA was found to be time-bound, which of the principle of immutability of final salary increases cannot be interpreted as
the illegality of dismissal declared in that implied the currency of the computation up judgments. either an allowance or a benefit, as
decision. A re-computation (or an original to the finality of the LA decision. In the allowances and benefits are separate from
computation, if no previous computation present case, the NLRC declared The respondents aver that the salary, while a salary increase is added to
has been made) is a part of the law – backwages to be reckoned "up to the recoverable backwages cannot go beyond salary as an increment thereto. It was
specifically, Article 279 of the Labor Code promulgation" of its decision, which was December 26, 2007, the date HMR offered further held therein that the base figure to
and the established jurisprudence on this an express declaration of the currency of to reinstate Lim, who allegedly refused to be used in the computation of backwages
provision – that is read into the decision. the computation up to the finality of the be reinstated and abandoned his job. was pegged at the wage rate at the time of
By the nature of an illegal dismissal case, NLRC decision, especially considering that the employee’s dismissal, inclusive of
the reliefs continue to add on until full HMR was "ordered to reinstate HMR sent the petitioner a regular allowances that the employee had
satisfaction, as expressed under Article immediately" petitioner Lim. The decisions letter, dated December 22, 2007, directing been receiving such as the emergency
279 of the Labor Code. The re- in both cases are premised on their him to report for work on December living allowances and the 13th month pay
computation of the consequences of illegal immediate execution, in that no question 26,2007, with an offer of separation pay in mandated by law. The award of salary
dismissal upon execution of the decision would have arisen had the parties the amount of P150,000.00 in lieu of differentials was not allowed, the rule
does not constitute an alteration or terminated the case and the decision reinstatement which he could avail of not being that upon reinstatement, illegally
amendment of the final decision being implemented at that point. later than December26, 2007. Lim replied dismissed employees were to be paid their
implemented. The illegal dismissal ruling in a letter, dated December 24, 2007, backwages without deduction and
stands; only the computation of monetary As discussed above, no essential requesting for a meeting in January 2008, qualification as to any wage increases or
consequences of this dismissal is affected change is being made by a recomputation considering that his counsel was out of the other benefits that might have been
and this is not a violation of the principle of because such is a necessary country; that the NLRC was still in the received by their co-workers who were not
immutability of final judgments. consequence which flows from the nature process of computing the amount of the dismissed.
xxx of the illegality of the dismissal. To award which was necessary to consider
That the amount the petitioner reiterate, a recomputation, or an original the offer of separation pay; and that a writ It must be noted that the NLRC
shall now pay has greatly increased is a computation, if no previous computation of execution had not yet been issued. did not err in awarding the unpaid salary
consequence that it cannot avoid as it is was made, as in the present case, is a HMR never responded to the petitioner’s increase for the years 1998-2000 as such
the risk that it ran when it continued to part of the law that is read into the request, and up to the present, the latter did not constitute backwages as a
seek recourses against the labor arbiter’s decision, namely, Article 279 of the Labor has yet to be reinstated. consequence of the petitioner’s illegal
decision. Article 279 provides for the Code and established dismissal, but was earned and owing to
consequences of illegal dismissal in no jurisprudence. Article 279 provides for the From the above, it is apparent the petitioner before he was illegally
uncertain terms, qualified only by consequences of illegal dismissal, one of that the petitioner cannot be deemed to terminated.
jurisprudence in its interpretation of when which is the payment of full backwages have refused reinstatement or to have
separation pay in lieu of reinstatement is until actual reinstatement, qualified only by abandoned his job. HMR’s offer of Whether or not holiday pay is
allowed. When that happens, the finality of jurisprudence when separation pay in lieu reinstatement appeared superficial and included in the monthly salary of an
the illegal dismissal decision becomes the of reinstatement is allowed, where the insincere considering that it never replied employee, may be gleaned from the
reckoning point instead of the finality of the illegal dismissal decision to the petitioner’s letter. It did not make divisors used by the company in the
reinstatement that the law decrees. In instead becomes the reckoning point. any further attempt to reinstate the computation of overtime pay and
allowing separation pay, the final decision petitioner either. The recoverable employees’ absences. To illustrate, if all
effectively declares that the employment The nature of an illegal dismissal backwages, thus, continue to run, and nonworking days are paid, the divisor
relationship ended so that separation pay case requires that backwages continue to must be reckoned up until the petitioner’s ofthe monthly salary to obtain daily rate
and backwages are to be computed up to add on until full satisfaction. The actual reinstatement. should be 365. If nonworking days are not
that point. x x x computation required to reflect full paid, the divisor is 251, which is a result of
satisfaction does not constitute an subtracting all Saturdays, Sundays, and
the ten legal holidays. Hence, if the (which was not modified by Nacar), which privileges as well as to full backwages, Bank of Lubao vs. Manabat, G.R. No.
petitioner’s base pay does not yet include states: 2. When an obligation, not inclusive of allowances, and to other 188722, February 1, 2012, Reyes, J.
holiday pay, it must be added to his constituting a loan or forbearance of benefits or their monetary equivalent
monetary award. money, is breached, an interest on the computed from the time his compensation Doctrine. However, the
amount of damages awarded may be was withheld from him up to the time of his backwages that should be awarded to the
In both Session Delights and imposed at the discretion of the court at actual reinstatement. However, in the respondent should be modified.
Nacar, no interest was expressly awarded the rate of 6% per annum. No interest, event that reinstatement is no longer Employees who are illegally dismissed are
before the judgments became final and however, shall be adjudged on possible, the employee may be given entitled to full backwages, inclusive of
executory, yet in both cases, the Court, unliquidated claims or damages except separation pay instead. allowances and other benefits or their
nonetheless, awarded legal interest. when or until the demand can be monetary equivalent, computed from the
Session Delights explained that the established with reasonable certainty. Notably, reinstatement and time their actual compensation was
decision had become a judgment for Accordingly, where the demand is payment of backwages are distinct and withheld from them up to the time of their
money from which another consequence established with reasonable certainty, the separate reliefs given to alleviate the actual reinstatement. But if reinstatement
flowed, namely, the payment of interest in interest shall begin to run from the time the economic setback brought about by the is no longer possible, the backwages shall
case of delay in accordance with Eastern claim is made judicially or extrajudicially employee’s dismissal. The award of one be computed from the time of their illegal
Shipping Lines v. Court of Appeals (This (Art. 1169, Civil Code) but when such does not bar the other. Backwages may be termination up to the finality of the
underlined portion was asked in the certainty cannot be so reasonably awarded without reinstatement, and decision.
2016 Bar). It was held therein that when established at the time the demand is reinstatement may be ordered without
the judgment of the court awarding a sum made, the interest shall begin to run only awarding backwages. Thus, when there is an order of
of money became final and executory, the from the date the judgment of the court is reinstatement, the computation of
rate of legal interest, should be 12% per made (at which time the quantification of In a number of cases, the Court, backwages shall be reckoned from the
annumfrom finality until satisfaction. damages may be deemed to have been despite ordering reinstatement or payment time of illegal dismissal up to the time that
reasonably ascertained). The actual base of separation pay in lieu of reinstatement, the employee is actually reinstated to his
The rules on legal interest in for the computation of legal interest shall, has not awarded backwages as penalty for former position.
Eastern Shipping have, however, been in any case, be on the amount finally the misconduct or infraction committed by
recently modified by Nacar in accordance adjudged. the employee. Pursuant to the order of
with Bangko Sentral ng Pilipinas Monetary reinstatement rendered by the LA, the
Board (BSP-MB) Circular No. 799, which It is plain from the above that the In the case at bar, petitioner petitioner sent the respondent a letter
became effective on July 1, 2013. interest of 6% per annum for obligations admitted that she granted the BP requiring him to report back to work on
Pertinently, it amended the rate of legal not constituting a loan or forbearance of accommodation against Mercado’s May 4, 2007. Notwithstanding the said
interest in judgments from 12% to 6% per money is one that may be imposed at the personal checks beyond and outside her letter, the respondent opted not to report
annum, with the qualification that the new discretion of the court. This form of interest authority. The Labor Arbiter, the NLRC and for work. Thus, it is but fair that the
rate be applied prospectively. Thus, the is not mandatory but discretionary in the Court of Appeals all found her to have backwages that should be awarded to the
12% per annum legal interest in judgments nature and therefore, not necessarily committed an "error of judgment," "honest respondent be computed from the time
under Eastern Shipping shall apply only owing to the petitioner in the present case. mistake," "honest mistake" vis-à-vis a that the respondent was illegally dismissed
until June 30, 2013, and the new rate of "major offense." until the time when he was required to
6% per annum shall be applied from July report for work, i.e. from September 1,
1, 2013 onwards (This underlined 2.1.2.2. Not availing Since petitioner was not faultless 2005 until May 4, 2007. It is only during
portion was asked in the 2016 Bar in in regard to the offenses imputed against the said period that the respondent is
Civil Law). Palteng vs. UCPB, G.R. No. 172199, her, we hold that the award of separation deemed to be entitled to the payment of
February 27, 2009, Quisumbing, J. pay only, without backwages, is proper. backwages.
Petitioner also prays that he be
awarded interest at a rate of 6% per Doctrine. Settled is the rule that The fact that the CA, in its April 4,
annum on the amounts awarded from the an employee who is illegally dismissed 2.1.2.3. Period Covered 2009 decision, ordered the payment of
time they became legally due him until from work is entitled to reinstatement separation pay in lieu of the respondent’s
entry of judgment, presumably under the without loss of seniority rights, and other reinstatement would not entitle the latter to
second paragraph in Eastern Shipping backwages. It bears stressing that
decisions of the CA, unlike that of the LA, season in a year in a year should be retirement benefits or separation pay. employer for whom services had been
are not immediately executory. construed as one year of service." Likewise, the provision regarding the 13th rendered by the employees who were
Accordingly, the petitioner should only pay month pay is not applicable to separation separated from employment in view of the
the respondent backwages from The amount of separation pay is pay. In fact, an employee who worked for a cessation of its business operations by the
September 1, 2005, the date when the based on two factors: the amount of single month in a year is entitled to a 13th cancellation of its management contract
respondent was illegally dismissed, until monthly salary and the number of years of month pay equivalent to only 1/12 of his or with the PPA. Petitioner, however, argues
May 4, 2007, the date when the petitioner service. Although the Labor Code provides her monthly salary. Finally, Manila Hotel otherwise and would shift liability for
required the former to report to work. different definitions as to what constitutes Company v. CIR did not rule that seasonal separation pay to MARINA on the strength
"one year of service," Book Six does not workers are considered at work during off of Paragraph 7 of the additional terms and
2.1.3. specifically define "one year of service" for season with regard to the computation of conditions appended to the permit to
Separation pay purposes of computing separation pay. separation pay. Said case merely held operate granted to MARINA.
However, Articles 283 and 284 both state that, in regard to season workers, the
in connection with separation pay that a employer-employee relationship is not Paragraph 7 aforequoted
2.1.3.1. Basis for computation fraction of at least six months shall be severed during off-season but merely provides that the employees of the
considered one whole year. Applying this suspended. "previous operator", meaning ERI/MPSI,
Phil. Tobacco Flue Curing vs. NLRC, to the case at bar, we hold that the amount shall be "absorbed" by the permit
300 SCRA 37, G.R. No. 127395, of separation pay which respondent "grantee", meaning MARINA, and the
December 10, 1998, Panganiban, J. members of the Lubat and Luris groups 2.1.3.1. Who is liable to pay benefits given the same employees under
should receive is one-half (1/2) their the "existing CBA" shall be "honored". A
Doctrine. Petitioner posits that respective average monthly pay during the E. Razon, Inc. vs. Secretary of Labor, key in the interpretation of this paragraph
the separation pay of a seasonal worker, last season they worked multiplied by the 222 SCRA 1, G.R. No. 85867, May 13, is the word "absorbed" which is
who works for only a fraction of a year, number of years they actually rendered 1993, Melo, J. synonymous with the words "assimilate" or
should not be equated with that of a service, provided that they worked for at "incorporate" and which, in business
regular worker. Positing that the total least six months during a given year. Doctrine. There appears to be parlance, means "to take over". As such, it
number of working days in one year is 303 no quarrel over the issue of whether or not appears at first blush, that an "absorbing"
days, petitioner submits the following The formula that petitioner separation pay should be paid to the employer shall be responsible for all the
formula for the computation of a seasonal proposes, wherein a year of work is workers of ERI/MPSI. The controversy benefits accruing to the "absorbed"
worker's separation pay: equivalent to actual work rendered for 303 actually is: which of the contending employees.
days, is both unfair and inapplicable, corporations, petitioner ERI/MPSI or
Total No. of Days considering that Articles 283 and 284 private respondent MARINA, should pay The circumstances of this case,
Actually Worked provide that in connection with separation such benefit to the employees concerned. however, do not warrant the conclusion
——————————— pay, a fraction of at least six months shall that, by "absorbing" the ERI/MPSI
————— x Daily Rate be considered one whole year. Under Separation or severance pay is employees, MARINA took the place of the
x 15 days these provisions, an employee who an allowance usually based on length or ERI/MPSI as an employer as if there had
Total No. of Working worked for only six months in a given year service that is payable to an employee on been no interruption in the employer-
Days In One Year — which is certainly less than 303 days — severance except usually in case of employee relationship between ERI/MPSI
is considered to have worked for one disciplinary discharge, or as compensation and its employees and, therefore, MARINA
Agreeing with the labor arbiter whole year. due an employee upon the severance of should assume all responsibilities of
and the NLRC, private respondents, on his employment status with the employer. ERI/MPSI. For, while in Marina Port
the other hand, claim that their separation In the same manner, Chartered Under Article 283 of the Labor Code, Services, Inc. vs. NLRC, the Court opined
pay should be based on the actual number Bank v. Ople, which private respondents separation pay is required where the that by virtue of Paragraph 7, security
of years they have been in petitioner's cite, does not support their cause. The termination of employment relationship is guards of the MPSI did become
service. They cite the law on service said case ruled that regular workers and occasioned by the "cessation of employees of MARINA, the undeniable
incentive leave, the implementing rules those who are paid by the month are both operations" of an establishment. The said fact is that, by the termination of its
regarding the 13th month pay, Manila entitled to holiday pay. On the other hand, article, therefore, puts the burden of management contract with the PPA,
Hotel v. CIR, and Chartered Bank v. the law on service incentive leave paying separation pay on ERI/MPSI, the ERI/MPSI ceased to be an employer.
Ople which allegedly stated that "each pay does not necessarily apply to Admittedly, the consequent separation
from the employment of its employees was hiring them back upon their separation ISSUE: Whether or not an employer that meaning and applied without attempted
not of the ERI/MPSI's own making. from the employment of ERI/MPSI. It was compelled to cease its operation interpretation.
However, it may not validly lay such should be recalled, however, there is no because of the compulsory acquisition by
consequence on the lap of MARINA which, law that requires the purchaser to absorb the government of its land for purposes of In other words, Article 283 of the
like itself, had no hand in the termination the employees of the selling corporation. agrarian reform, is liable to pay separation Labor Code does not contemplate a
of the management contract by the PPA. As such, when MARINA rehired the pay to its affected employees. situation where the closure of the business
The fact that a couple of days later, the ERI/MPSI employees, it had all the right to establishment is forced upon the employer
PPA, without public bidding, issued to consider them as new ones. On the other HELD: No. It is clear that Article 283 of and ultimately for the benefit of the
MARINA, permit to operate, does not hand, ERI/MPSI, to whom years of service the Labor Code applies in cases of employees.
imply that MARINA stepped into the shoes had been rendered by its suddenly jobless closures of establishment and reduction of
of ERI/MPSI as if there were absolute employees, had the corresponding personnel. The peculiar circumstances in As earlier stated, the Patalon
identity between them. Parenthetically, the obligation to grant them what is theirs the case at bar, however, involves neither Coconut Estate was closed down because
issue of the legality of the cancellation of under the law and the collective bargaining the closure of an establishment nor a a large portion of the said estate was
MPSI's permit to operate was laid to rest agreement. After all, a collective reduction of personnel as contemplated acquired by the DAR pursuant to the
in E. Razon, Inc. vs. Philippine Ports bargaining agreement is the law between under the aforesaid article. When the CARP. Hence, the closure of the Patalon
Authority. the parties and compliance therewith is Patalon Coconut Estate was closed Coconut Estate was not effected
mandated by the express policy of the law. because a large portion of the estate was voluntarily by private respondents who
By absorbing ERI/MPSI acquired by DAR pursuant to CARP, the even filed a petition to have said estate
employees and honoring the terms and The situation in this case is ownership of that large portion of the exempted from the coverage of RA 6657.
conditions in the collective bargaining completely different from that obtaining estate was precisely transferred to PEARA Unfortunately, their petition was denied by
agreement between ERI/MPSI and the in Filipinas Port Services, Inc. vs. NLRC, and ultimately to the petitioners as the Department of Agrarian Reform. Since
employees, MARINA did not assume the where the petitioner was obligated "not members thereof and as agrarian lot the closure was due to the act of the
responsibility of ERI/MPSI to pay only to absorb the workers of the dissolved beneficiaries. Hence, Article 283 of the government to benefit the petitioners, as
separation pay to its employees. As companies but also to include the length of Labor Code is not applicable to the case at members of the Patalon Estate Agrarian
correctly put by public respondent, service earned by the absorbed bench. Reform Association, by making them
Paragraph 7, insofar as it refers to employees with their former employers as agrarian lot beneficiaries of said estate,
employees' benefits, should be applied well" because said case involved a merger Even assuming, arguendo, that the petitioners are not entitled to
prospectively with respect to MARINA. of different companies into a single the situation in this case were a closure of separation pay. The termination of their
This conclusion is supported by Paragraph company as a result of the PPA's the business establishment called Patalon employment was not caused by the private
14 of Permit No. 104286 granted to integration of stevedoring/arastre services. Coconut Estate of private respondents, respondents. The blame, if any, for the
MARINA which states: On the other hand, in the case at bar, still the petitioners/employees are not termination of petitioners' employment can
there is no privity of contract between entitled to separation pay. The closure even be laid upon the petitioner-
14. Grantee shall be ERI/MPSI and MARINA so as to make the contemplated under Article 283 of the employees themselves inasmuch as they
responsible for all latter a common or even substitute Labor Code is a unilateral and voluntary formed themselves into a cooperative,
obligations, liabilities or employer that it should be burdened with act on the part of the employer to close the PEARA, ultimately to take over, as
claims arising out of any the obligations of the former. business establishment as may be agrarian lot beneficiaries, of private
transactions or gleaned from the wording of the said legal respondents' landed estate pursuant to RA
undertakings in provision that "The employer may also 6657. The resulting closure of the
connections with their 2.1.3.2. Employer not liable terminate the employment of any business establishment, Patalon Coconut
cargo handling employee due to. . .". The use of the word Estate, when it was placed under CARP,
operations as of the National Federation of Labor vs. NLRC, "may," in a statute, denotes that it is occurred through no fault of the private
actual date of transfer 327 SCRA 158, G.R. No. 127718, March directory in nature and generally respondents.
thereof to grantee. 2, 2000, De Leon, Jr., J. (Possible Bar permissive only. The "plain meaning rule"
Problem) or verba legis in statutory construction is While the Constitution provides
MARINA might have been thus applicable in this case. Where the that "the State . . . shall protect the rights
impelled not only by compassion for the words of a statute are clear, plain and free of workers and promote their welfare", that
employees but also by their tested skills in from ambiguity, it must be given its literal constitutional policy of providing full
protection to labor is not intended to Jo Cinema Corp. vs. Abellana, 360 position because suspension beyond this from the time that the 30-day suspension
oppress or destroy capital and SCRA 142, G.R. No. 132837, June 28, maximum period amounts to constructive period had expired, respondent can be
management. Thus, the capital and 2001, Buena, J. dismissal. already deemed as constructively
management sectors must also be dismissed.
protected under a regime of justice and Doctrine. A constructive Petitioner denies that it
the rule of law. discharge is defined as a quitting because constructively dismissed respondent and Second, the strict adherence by
continued employment is rendered alleges that it was respondent who went the NLRC to the definition of constructive
c. impossible, unreasonable or unlikely; as AWOL and who refused to resume his dismissal is erroneous. Apparently, the
Constructive dismissal an offer involving demotion in rank and a work because he could not account for NLRC ruled out constructive dismissal in
diminution in pay. union funds. Both the Labor Arbiter and this case mainly because according to it
> Clearly, constructive dismissal had the NLRC rejected petitioner's claims. We "constructive dismissal consists in the act
already set in when the suspension went Private respondent was not affirm the rejection. It bears stressing that of quitting because continued employment
beyond the maximum period allowed by demoted nor suffered any diminution of in illegal dismissal cases, it is the is rendered impossible, unreasonable or
law. (Hyatt Taxi Services, Inc. vs. Catinoy, pay, neither was she prevented from employer who has the burden of unlikely as in the case of an offer involving
359 SCRA 686, G.R. No. 143204, June returning for work. As discussed earlier, proof. Since petitioner claims that demotion in rank and a diminution in
21, 2001, Gonzaga-Reyes, J.) private respondent was suspended from respondent abandoned his work, petitioner pay". Based on this definition, the NLRC
work for twenty (20) days for violating has to establish the concurrence of the concluded that since respondent neither
> A diminution of pay is prejudicial to the company rules. Petitioners stance to following: (1) the employee's intention to resigned nor abandoned his job and the
employee and amounts to constructive oblige private respondent to pay the abandon employment and (2) overt acts fact that respondent pursued his
dismissal. (Siemens Philippines, Inc. vs. amount of the checks is just fair and from which such intention may be inferred reinstatement negate constructive
Domingo, 560 SCRA 86, G.R. No. reasonable considering that she indorsed —as when the employee shows no desire dismissal. What makes this conclusion
150488, July 28, 2008, Nachura, J.) the subject checks. As an endorser, to resume work. Petitioner failed to make tenuous is the fact that constructive
private respondent undertook to pay the out its case of abandonment. Even the dismissal does not always involve
> This Court thus rules that petitioner’s amount of the dishonored checks. The NLRC in its modified decision confirmed forthright dismissal or diminution in rank,
prolonged suspension, owing to payment of said amount is not that there were no overt acts unerringly compensation, benefit and
respondent’s neglect to conclude the discriminatory, impossible, and pointing to the fact that respondent had no privileges. There may be constructive
investigation, had ripened to constructive unreasonable to foreclose any choice on intention of returning to work anymore. dismissal if an act of clear discrimination,
dismissal. (Pido vs. NLRC, G.R. No. the part of the private respondent to forego Also, the fact that respondent filed a insensibility, or disdain by an employer
169812, February 23, 2007, Carpio- her continued employment. It was private complaint against his employer within a becomes so unbearable on the part of the
Morales, J.) respondent who signified her intention not reasonable period of time belies employee that it could foreclose any
to report for work when she filed the abandonment. choice by him except to forego his
> In cases of a transfer of an employee, instant case. continued employment.
the rule is settled that the employer is Petitioner implores this Court to
charged with the burden of proving that its Hyatt Taxi Services, Inc. vs. Catinoy, respect the modified decision of the Here, what made it impossible or
conduct and action are for valid and 359 SCRA 686, G.R. No. 143204, June NLRC. While it is true that the essence of unacceptable for respondent to resume
legitimate grounds such as genuine 21, 2001, Gonzaga-Reyes, J. a motion for reconsideration is a second work was petitioner's insistence that
business necessity and that the transfer is review of the facts, this theory does not respondent first desist from filing his
not unreasonable, inconvenient or Doctrine. Clearly, constructive apply in the case at bar. As correctly criminal complaint against the acting
prejudicial to the employee. If the dismissal had already set in when the pointed out by the Court of Appeals, the president of the union and to withdraw his
employer cannot overcome this burden of suspension went beyond the maximum motion for reconsideration of petitioner complaint for illegal suspension against
proof, the employee’s transfer shall be period allowed by law. Section 4, Rule XIV, before the NLRC contained no factual petitioner before he could be allowed to
tantamount to unlawful constructive Book V of the Omnibus Rules provides basis that could support the NLRC's return to work. Respondent refused and
dismissal. (Morales vs. Harbour Center, that preventive suspension cannot be change of heart. The evidence as it stands amended his complaint to include
G.R. No. 174208, January 25, 2012, more than the maximum period of 30 shows that after the lapse of the 30-day constructive dismissal. Respondent's
Perez, J.) days. Hence, we have ruled that after the suspension period, respondent reported refusal to yield to petitioner's conditioned
30-day period of suspension, the for work but he was not allowed to resume offer to take him back is understandable
employee must be reinstated to his former his duties as a taxi driver. To reiterate, for respondent has every right not to
bargain away his right to prosecute his reality not his choice but a situation intimate corporate relationship of Siemens
complaints in exchange for the A diminution of pay is prejudicial created by the company, thereby Germany and Siemens Philippines,
employment to which he was in the first to the employee and amounts to amounting to constructive dismissal. including the practice of the two
place rightfully entitled. constructive dismissal. The gauge for companies of integrating their workforce.
constructive dismissal is whether a The argument of Siemens
In acting on the motion for reasonable person in the employee’s Philippines that it is not privy to the Second, in Domingo’s contract of
reconsideration of petitioner, the NLRC position would feel compelled to give up consultancy agreement between Domingo employment with Siemens Philippines, it is
gave credence to petitioner's contention his employment under the prevailing and Siemens Germany is unacceptable. provided that Domingo shall not be
that petitioner's failure to reinstate circumstances. Constructive dismissal is By virtue of its employment contract with connected in any other work capacity or
respondent to his job was merely a result defined as quitting when continued Domingo, Siemens Philippines stepped employment or be otherwise involved,
of a miscommunication between the two employment is rendered impossible, into the shoes of ETSI as Domingo’s directly or indirectly, with any other
parties since petitioner was willing to take unreasonable or unlikely as the offer of employer. The stipulation in the contract business or concern without first having
back respondent as its employee. employment involves a demotion in rank that Domingo shall suffer no diminution in obtained the written consent of the
or diminution in pay. It exists when the salary, benefits and privileges that he company. Yet, Siemens Philippines never
We disagree. Instead, we are in resignation on the part of the employee enjoyed as employee of ETSI is, in effect, questioned the continued consultancy
full accord with the Court of Appeals that was involuntary due to the harsh, hostile assumption by Siemens Philippines of work of Domingo with Siemens Germany,
the predicament respondent faced was not and unfavorable conditions set by the ETSI’s obligations and commitments. This not even when the consultancy agreement
just a product of miscommunication, an employer. It is brought about by the clear included the guarantee that Domingo’s was renewed twice during the lifetime of
argument that the NLRC had in fact discrimination, insensibility or disdain consultancy contract with Siemens Domingo’s contract of employment with
branded in its earlier decision as a mere shown by an employer which becomes Germany would be renewed. After all, Siemens Philippines.
afterthought. Respondent had written the unbearable to the employee. An employee there was a commitment by Siemens
assistant vice president of petitioner to who is forced to surrender his position Germany that the consultancy contract Third, the guarantee letter issued
complain about his non-reinstatement after through the employer’s unfair or would continue as long as Domingo by Siemens Germany in favor of Domingo
the lapse of his preventive suspension. unreasonable acts is deemed to have remained an employee of ETSI; and was never questioned, much less revoked
Petitioner failed to reply, and it is actually been illegally terminated and such Domingo’s employment with Siemens by Siemens Philippines when it assumed
from petitioner's inaction where the termination is deemed to be involuntary. Philippines was merely a continuation of the employment of Domingo. The
supposed miscommunication sprung. his employment with ETSI. Guarantee Letter was a security given to
We have, under the law’s Domingo by Siemens Germany assuring
Moreover, from the time that mandate, consistently resolved this While admittedly, Siemens Domingo that Siemens Philippines would
petitioner failed to recall respondent to situation in favor of the employee in order Philippines is not a party to the ensure that Siemens Germany would
work after the expiration of the suspension to protect his rights and interests from the arrangement between Siemens Germany, extend the consultancy agreement as long
period, taken together with petitioner's coercive acts of the employer. ETSI and Domingo, knowledge of and as Domingo was under its employ.
precondition that respondent withdraw the acquiescence to – if not actual
complaints against the acting president of In the instant case, Domingo’s concurrence in – the arrangement can be Fourth, the consultancy
the union and against petitioner itself, resignation was brought about by the imputed to Siemens Philippines as to bind agreement was a form of benefit or
respondent's security of tenure was decision of the management of Siemens it to the arrangement. This conclusion privilege given to Domingo by ETSI, a
already undermined by petitioner. Philippines not to renew ― or work for the finds support in the following: privilege that was allowed by Siemens
Petitioner's actions undoubtedly constitute renewal of ― his consultancy contract with Philippines to continue when it took over
constructive dismissal.w Siemens Germany which clearly resulted First, based on the findings of the majority of the business activities of
in the substantial diminution of his salary. facts of the LA, NLRC and CA ― MATEC, ETSI and, consequently, became
Siemens Philippines, Inc. vs. Domingo, The situation brought about the feeling of ETSI, Siemens Philippines and Siemens Domingo’s employer. The outright removal
560 SCRA 86, G.R. No. 150488, July 28, oppression which compelled Domingo to Germany are related companies, the first of the privilege contravenes the law,
2008, Nachura, J. resign. The diminution in pay created an three being subsidiaries of the parent because it resulted in the effective
adverse working environment that company, and the fourth, Siemens diminution of Domingo’s salary.
Doctrine. We believe, and so rendered it impossible for Domingo to Germany, having an investment in
hold, that Domingo was constructively continue working for Siemens Philippines. Siemens Philippines. Short of piercing the Pido vs. NLRC, G.R. No. 169812,
dismissed from employment. His resignation from the company was in veil of corporate fiction, we note the February 23, 2007, Carpio-Morales, J.
 work can be assigned. This, respondent shall thereafter reinstate the worker in his This Court thus rules that
Doctrine. We stress that Article failed to discharge. former or in a substantially equivalent petitioner’s prolonged suspension, owing
286 applies only when there is a bona fide position or the employer may extend the to respondent’s neglect to conclude the
suspension of the employer's operation of From the January 23, 2000 period of suspension provided that during investigation, had ripened to constructive
a business or undertaking for a period not Recall Order issued by respondent the period of extension, he pays the dismissal.
exceeding six (6) months. In such a case, reading: wages and other benefits due to the
there is no termination of employment worker. In such case, the worker shall not Morales vs. Harbour Center, G.R. No.
but only a temporary displacement of 1. You are hereby instructed to be bound to reimburse the amount paid to 174208, January 25, 2012, Perez, J.
employees, albeit the displacement should report to Cherubim Office him during the extension if the employer
not exceed six (6) months. The paramount tomorrow, 24 January 2000 for decides, after completion of the hearing, to Doctrine. Constructive dismissal
consideration should be the dire exigency investigation and effective to dismiss the worker. exists where there is cessation of work
of the business of the employer that date, your duty at Tower One because "continued employment is
compels it to put some of its employees Console is [t]emporarily As above-quoted Section 9 of the rendered impossible, unreasonable or
temporarily out of work. In security suspended. said Implementing Rules expressly unlikely, as an offer involving a demotion in
services, the temporary "off-detail" of provides, in the event the employer rank or a diminution in pay" and other
guards takes place when the security 2. The outright suspension is due chooses to extend the period of benefits. Aptly called a dismissal in
agency's clients decide not to renew their to the argumentation (sic) [that] suspension, he is required to pay the disguise or an act amounting to dismissal
contracts with the security agency, happened between you and ASF wages and other benefits due the worker but made to appear as if it were
resulting in a situation where the available Alcantara last 21 January 2000, and the worker is not bound to reimburse not, constructive dismissal may, likewise,
posts under its existing contracts are less 0900 Hrs. the amount paid to him during the exist if an act of clear discrimination,
than the number of guards in its roster. 3. In this regard, report to Mr. extended period of suspension even if, insensibility, or disdain by an employer
Marcelino N. Tolod, the after the completion of the hearing or becomes so unbearable on the part of the
Verily, a floating status requires Operation[s] Manager, after your investigation, the employer decides to employee that it could foreclose any
the dire exigency of the employer's bona investigation for further dismiss him. choice by him except to forego his
fide suspension of operation of a business instruction, continued employment. In cases of a
or undertaking. In security services, this Respondent did not inform transfer of an employee, the rule is settled
happens when the security agency’s it is gathered that respondent intended to petitioner that it was extending its that the employer is charged with the
clients which do not renew their contracts put petitioner under preventive suspension investigation, nor did it pay him his wages burden of proving that its conduct and
are more than those that do and the new for an indefinite period of time pending the and other benefits after the lapse of the action are for valid and legitimate grounds
ones that the agency gets. Also, in investigation of the complaint against him. 30-day period of suspension. Neither did such as genuine business necessity and
instances when contracts for security The allowable period of suspension in respondent issue an order lifting that the transfer is not unreasonable,
services stipulate that the client may such a case is not six months but only 30 petitioner’s suspension, or any official inconvenient or prejudicial to the
request the agency for the replacement of days, following Sections 8 and 9 of Rule assignment, memorandum or detail order employee. If the employer cannot
the guards assigned to it even for want of XXIII, Book V of the Omnibus Rules for him to assume his post or another post. overcome this burden of proof, the
cause, the replaced security guard may be Implementing the Labor Code Respondent merely chose to dawdle with employee’s transfer shall be tantamount to
placed on temporary "off-detail" if there are (Implementing Rules), viz: the investigation, in absolute disregard of unlawful constructive dismissal.
no available posts under respondent’s petitioner’s welfare.
existing contracts. SEC. 8. Preventive suspension. - Our perusal of the record shows
The employer may place the worker At the time petitioner filed the that HCPTI miserably failed to discharge
When a security guard is placed concerned under preventive suspension if complaint for illegal suspension and/or the foregoing onus. While there was a lack
on a "floating status," he does not receive his continued employment poses a serious constructive dismissal on October 23, of showing that the transfer or
any salary or financial benefit provided by and imminent threat to the life or property 2000, petitioner had already been placed reassignment entailed a diminution of
law. Due to the grim economic of the employer or of his co-workers. under preventive suspension for nine salary and benefits, one fact that must not
consequences to the employee, the months. To date, there is no showing or be lost sight of was that Morales was
employer should bear the burden of SEC. 9. Period of suspension. information that, if at all, respondent still already occupying the position of Division
proving that there are no posts available to - No preventive suspension shall last intends to conclude its investigation. Manager at HCPTI’s Accounting
which the employee temporarily out of longer than thirty (30) days. The employer Department as a consequence of his
promotion to said position on 22 October d. Floating is considered a temporary retrenchment the period set by law that the operation of
2002. Concurrently appointed as member Status measure, there is similarly no provision in a business or undertaking may be
of HCPTI’s Management Committee the Labor Code which treats of a suspended thereby suspending the
(MANCOM) on 2 December 2002, Morales Exocet Security vs. Serrano, G.R. No. temporary retrenchment or lay-off. Neither employment of the employees concerned.
was subsequently reassigned by HCPTI 198538, September 29, 2014, Velasco, is there any provision which provides for The temporary lay-off wherein the
"from managerial accounting to Operations Jr., J. (Possible Bar Problem) its requisites or its duration. Nevertheless, employees likewise cease to work should
Cost Accounting" on 27 March 2003, since an employee cannot be laid-off also not last longer than six months. After
without any mention of the position to Doctrine. While there is no indefinitely, the Court has applied Article six months, the employees should either
which he was actually being transferred. specific provision in the Labor Code which 292 (previously Article 286) of the Labor be recalled to work or permanently
That the reassignment was a demotion is, governs the "floating status" or temporary Code by analogy to set the specific period retrenched following the requirements of
however, evident from Morales’ new duties "off-detail" of security guards employed by of temporary lay-off to a maximum of six the law, and that failing to comply with this
which, far from being managerial in nature, private security agencies, this situation (6) months. The said provision states: would be tantamount to dismissing the
were very simply and vaguely described was considered by this Court in several employees and the employer would thus
as inclusive of "monitoring and evaluating cases as a form of temporary ART. 292. When employment not be liable for such dismissal.
all consumables requests, gears and retrenchment or lay-off. The concept has deemed terminated.- The bonafide
equipments related to [HCPTI’s] been defined as that period of time when suspension of the operation of a business In accordance with the
operations" as well as "close interaction security guards are in between or undertaking for a period not exceeding aforementioned ruling, the Department of
with [its] sub-contractor Bulk Fleet Marine assignments or when they are made to six (6) months, or the fulfillment by the Labor and Employment (DOLE) issued
Corporation." wait after being relieved from a previous employee of a military or civic duty shall Department Order No. 14, Series of 2001
post until they are transferred to a new not terminate employment. In all such (DO 14-01), entitled "Guidelines
We have carefully pored over the one. As pointed out by the CA, it takes cases, the employer shall reinstate the Governing the Employment and Working
records of the case but found no place when the security agency’s clients employee to his former position without Conditions of Security Guards and Similar
evidentiary basis for the CA’s finding that decide not to renew their contracts with loss of seniority rights if he indicates his Personnel in the Private Security Industry,"
Morales was designated as head of the agency, resulting in a situation where desire to resume his work not later than Section 6.5, in relation to Sec. 9.3, of
HCPTI’s Operations Department which, as the available posts under its existing one (1) month from the resumption of which states that the lack of service
indicated in the corporation’s plantilla, had contracts are less than the number of operations of his employer or from his assignment for a continuous period of six
the Vice-President for Operations at its guards in its roster. It also happens in relief from the military or civic duty. (6) months is an authorized cause for the
helm. On the contrary, Morales’ demotion instances where contracts for security termination of the employee, who is then
is evident from the fact that his services stipulate that the client may Thus, this Court has held, citing entitled to a separation pay equivalent to
reassignment entailed a transfer from a request the agency for the replacement of Sebuguero v. NLRC, that the placement of half month pay for every year of service,
managerial position to one which was not the guards assigned to it, even for want of the employee on a floating status should viz:
even included in the corporation’s plantilla. cause, such that the replaced security not last for more than six months. After six
For an employee newly charged with guard may be placed on temporary "off- months, the employee should be recalled 6.5 Other Mandatory Benefits. In
functions which even the CA recognized detail" if there are no available posts under for work, or for a new assignment; appropriate cases, security guards/similar
as pertaining to the Operations the agency’s existing contracts. otherwise, he is deemed terminated. personnel are entitled to the mandatory
Department, it also struck a discordant benefits as listed below, although the
chord that Morales was, just the same, As the circumstance is generally There is no specific provision of same may not be included in the monthly
directed by HCPTI to report to Filart, its outside the control of the security agency law which treats of a temporary cost distribution in the contracts, except
Vice- President for Finance with whom he or the employer, the Court has ruled that retrenchment or lay-off and provides for the required premiums form their
already had a problematic working when a security guard is placed on a the requisites in effecting it or a period or coverage:
relationship. This matter was pointed out "floating status," he or she does not duration therefor. These employees
in Morales’ 31 March 2003 protest but was receive any salary or financial benefit cannot forever be temporarily laid-off. To a. Maternity benefit as provided
notably brushed aside by HCPTI by simply provided by law. remedy this situation or fill the hiatus, under SS Law;
invoking management prerogative in its Article 286 [now 292] may be applied but b. Separation pay if the
inter-office memorandum dated 4 April It must be emphasized, however, only by analogy to set a specific period termination of employment is for
2003. that although placing a security guard on that employees may remain temporarily authorized causeas provided by
"floating status" or a temporary "off-detail" laid-off or in floating status. Six months is law and as enumerated below:
 filing complaints against the employer on 01, the security agency must comply with It cannot, therefore, be gainsaid
Half-Month Pay Per Year of violations of labor laws, among others. the provisions of Article 289 (previously that the right of security guards to security
Service, but in no case less than Art. 283) of the Labor Code, which of tenure is safeguarded by administrative
One Month Pay if separation pay If after the period of 6 months, mandates that a written notice should be issuances and jurisprudence, in parallel
is due to: the security agency/employer cannot served on the employee on temporary off- with the mandate of the Labor Code and
provide work or give assignment to the detail or floating status and to the DOLE the Constitution to protect labor and the
1. Retrenchment or reserved security guard, the latter can be one (1) month before the intended date of working people. Nonetheless, while the
reduction of personnel dismissed from service and shall be termination. This is also clear in Sec. 9.2of Court has recognized the security guards’
effected by management entitled to separation pay as described in DO 14-01 which provides: right to security of tenure under the
to prevent serious subsection 6.5. "floating status" rule, the Court has
losses; 9.2 Notice of Termination - In similarly acknowledged the management
2. Closure or cessation Security guards on reserved case of termination of employment due to prerogative of security agencies to transfer
of operation of an status who accept employment in other authorized causes provided in Article 283 security guards when necessary in
establishment not due to security agencies or employers before the and 284 of the Labor Code and in the conducting its business, provided it is
serious losses or end of the above six-month period may not succeeding subsection, the employer shall done in good faith. In Megaforce Security
financial reverses; be given separation pay. serve a written notice on the security and Allied Services, Inc. v. Lactao, the
3. Illness or disease not guard/personnel and the DOLE at least Court explained:
curable within a period In Reyes v. RP Guardians one (1) month before the intended date
of 6 months and Security Agency, Inc., the Court explained thereof. In cases involving security
continued employment the application of DO 14-01 to security guards, a relief and transfer order in itself
is prohibited by law or agencies and their security guards, and In every case, the Court has does not sever employment relationship
prejudicial to the the procedural requirements with which declared that the burden of proving that between a security guard and his agency.
employee’s health or the security agencies must comply: there are no posts available to which the An employee has the right to security of
that of coemployees; security guard may be assigned rests on tenure, but this does not give him such a
4. Lack of service Furthermore, the entitlement of the employer. We ruled in Nationwide vested right in his position as would
assignment for a the dismissed employee to separation pay Security and Allied Services Inc. v. deprive the company of its prerogative to
continuous period of 6 of one month for every year of service Valderama: change his assignment or transfer him
months. should not be confused with Section 6.5 where his service, as security guard, will
xxxx (4) of DOLE D.O. No. 14 which grants a In cases involving security be most beneficial to the client. Temporary
9.3 Reserved Status – A security separation pay of one half month for every guards, a relief and transfer order in itself "off-detail" or the period of time security
guard or similar personnel may be placed year service x x x. does not sever employment relationship guards are made to wait until they are
in a work pool or on reserved status due to xxxx between a security guard and his agency. transferred or assigned to a new post or
lack of service assignments after the The said provision contemplates An employee has the right to security of client does not constitute constructive
expiration or termination of the service a situation where a security guard is tenure, but this does not give him a vested dismissal as their assignments primarily
contract with the principal where he/she or removed for authorized causes such as right to his position as would deprive the depend on the contracts entered into by
assigned or due to temporary suspension when the security agency experiences a company of its prerogative to change his the security agencies with third parties.
of agency operations. surplus of security guards brought about assignment or transfer him where his Indeed, the Court has repeatedly
by lack of clients. In such a case, the service, as security guard, will be most recognized that "off-detailing" is not
No security guard or personnel security agency has the option to resort to beneficial to the client. Temporary "off- equivalent to dismissal, so long as such
can be placed in a work pool or on retrenchment upon compliance with the detail" or the period of time security guards status does not continue beyond a
reserved status in any of the following procedural requirements of "two-notice are made to wait until they are transferred reasonable time; when such a "floating
situations: a) after expiration of a service rule" set forth in the Labor Code. or assigned to a new post or client does status" lasts for more than six months, the
contract if there are other principals where not constitute constructive dismissal, so employee may be considered to have
he/she can be assigned; b) as a measure Thus, to validly terminate a long as such status does not continue been constructively dismissed.
to constructively dismiss the security security guard for lack of service beyond six months.
guard; and c) as an act of retaliation for assignment for a continuous period of six In the controversy now before the
months under Secs. 6.5 and 9.3 of DO 14- Court, there is no question that the
security guard, Serrano, was placed on security guard. As aptly found by the Thus, it is manifestly unfair and equivalent to half month pay for every year
floating status after his relief from his post NLRC: unacceptable to immediately declare the of his actual service.
as a VIP security by his security agency’s mere lapse of the six-month period of
client. Yet, there is no showing that his Anent the client’s action, floating status as a case of constructive Tatel vs. JLFP Investigation, G.R. No.
security agency, petitioner Exocet, acted in respondent agency had no recourse but to dismissal, without looking into the peculiar 206942, February 25, 2015, Perlas-
bad faith when it placed Serrano on such assign complainant to a new posting. circumstances that resulted in the security Bernabe, J.
floating status. What is more, the present However, complainant, having had a taste guard’s failure to assume another post.
case is not a situation where Exocet did of VIP detail and perhaps the perks that This is especially true in the present case Doctrine. In Superstar Security
not recall Serrano to work within the six- come with such kind of assignment, where the security guard’s own refusal to Agency, Inc. and/or Col. Andrada v.
month period as required by law and vaingloriously assumed that he can only accept a non-VIP detail was the reason NLRC, the Court ruled that placing an
jurisprudence. Exocet did, in fact, make an be assigned to VIP close-in posting and that he was not given an assignment employee on temporary "off-detail" is not
offer to Serrano to go back to work. It is that he would accept nothing less. In fact, within the six-month period. The security equivalent to dismissal provided that such
just that the assignment—although it does after his relief and tardy appearance at agency, Exocet, should not then be held temporary inactivity should continue only
not involve a demotion in rank or respondent’s office, he was offered liable. for a period of six (6) months. In security
diminution in salary, pay, benefits or reassignment albeit to general security agency parlance, being placed "off-detail"
privileges—was not the security detail services which he refused. Respondents Indeed, from the facts presented, or on "floating status" means "waiting to be
desired by Serrano. clearly made known to him that as of the Serrano was guilty of wilful disobedience posted." In Salvaloza vs. NLRC, the Court
moment no VIP detail was vacant or to a lawful order of his employer in further explained the nature of the "floating
Clearly, Serrano’s lack of sought by other clients but complainant connection with his work, which is a just status," to wit: Temporary "off-detail" or
assignment for more than six months was adamant in his refusal. Complainant cause for his termination under Art. 288 "floating status" is the period of time when
cannot be attributed to petitioner even had the nerve to assert that he just (previously Art. 282) of the Labor security guards are in between
Exocet. On the contrary, records show be informed if there is already a VIP detail Code. Nonetheless, Exocet did not take assignments or when they are made to
that, as early as September 2006, or one available for him and that he will just report Serrano’s wilful disobedience against him. wait after being relieved from a previous
month after Serrano was relieved as a VIP for re-assignment by then. It is also well to Hence, Exocet is considered to have post until they are transferred to a new
security, Exocet had already offered note that to these allegations, complainant waived its right to terminate Serrano on one. It takes place when the security
Serrano a position in the general security made no denial. such ground. agency's clients decide not to renew their
service because there were no available contracts with the agency, resulting in a
clients requiring positions for VIP security. To repeat for emphasis, the In this factual milieu, since situation where the available posts under
Notably, even though the new assignment security guard’s right to security of tenure respondent Serrano was not actually or its existing contracts are less than the
does not involve a demotion in rank or does not give him a vested right to the constructively dismissed from his number of guards in its roster. It also
diminution in salary, pay, or benefits, position as would deprive the company of employment by petitioner Exocet, it is best happens in instances where contracts for
Serrano declined the position because it its prerogative to change the assignment that petitioner Exocet direct him to report security services stipulate that the client
was not the post that suited his of, or transfer the security guard to, a for work, if any security assignment is still may request the agency for the
preference, as he insisted on being a VIP station where his services would be most available to him. If respondent Serrano still replacement of the guards assigned to it
Security. beneficial to the client. Indeed, an refuses to be assigned to any available even for want of cause, such that the
employer has the right to transfer or guard position, he shall be deemed to replaced security guard may be placed on
In fact, even during the meeting assign its employees from one office or have abandoned his employment with temporary "off-detail" if there are no
with the Labor Arbiter, Exocet offered a area of operation to another, or in pursuit petitioner. available posts under the agency's existing
position in the general security only to be of its legitimate business interest, provided contracts. During such time, the security
rebuffed by Serrano. It was as if Serrano there is no demotion in rank or diminution If no security assignment is guard does not receive any salary or any
obliged Exocet to look for a client in need of salary, benefits, and other privileges, available for respondent, petitioner Exocet financial assistance provided by law. It
of a VIP security—the availability of which and the transfer is not motivated by should comply with the requirements of does not constitute a dismissal, as the
is obviously not within Exocet’s control, discrimination or bad faith, or effected as a DO 14-01, in relation to Art. 289 of the assignments primarily depend on the
and by nature, difficult to procure as these form of punishment or demotion without Labor Code, and serve a written notice on contracts entered into by the security
contracts depend on the trust and sufficient cause. Serrano and the DOLE one (1) month agencies with third parties, so long as
confidence of the client or principal on the before the intended date of termination, such status does not continue beyond a
and pay Serrano separation pay reasonable time. When such a "floating
status" lasts for more than six (6) months, Doctrine. RA 7641, which was benefits should be computed in services rendered during normal
the employee may be considered to have enacted on December 9, 1992, amended accordance with Article 287 of the Labor working days and hours, whether
been constructively dismissed. Article 287 of the Labor Code, providing Code, as amended by RA 7641, being the such payments are fixed or
for the rules on retirement pay to qualified more beneficent retirement scheme. They ascertained on a time, task, piece
Relative thereto, constructive private sector employees in the absence differ, however, in the resulting benefit or commission basis, or other
dismissal exists when an act of clear of any retirement plan in the differentials due to divergent method of calculating the same,
discrimination, insensibility, or disdain, on establishment. The said law states that "an interpretations of the term "one-half (1/2) and includes the fair and
the part of the employer has become so employee’s retirement benefits under any month salary" as used under the law. reasonable value, as determined
unbearable as to leave an employee with collective bargaining [agreement (CBA)] by the Secretary of Labor and
no choice but to forego continued and other agreements shall not be less The Court, in the case of Elegir Employment, of food, lodging or
employment, or when there is cessation of than those provided" under the same – vs. Philippine Airlines, Inc., has recently other facilities customarily
work because continued employment is that is, at least one half (1/2) month salary affirmed that "one-half (1/2) month salary furnished by the employer to his
rendered impossible, unreasonable, or for every year of service, a fraction of at means 22.5 days: 15 days plus 2.5 days employees. The term does not
unlikely, as an offer involving a demotion in least six (6) months being considered as representing one-twelfth (1/12) of the 13th include cost of living allowance,
rank and a diminution in pay. one whole year – and that "[u]nless the month pay and the remaining 5 days for profit-sharing payments and other
parties provide for broader inclusions, the [SIL]." The Court sees no reason to depart monetary benefits which are not
In this case, respondents term one-half (1/2) month salary shall from this interpretation. GCHS’ considered as part of or
themselves claimed that after having mean fifteen (15) days plus one-twelfth argument therefore that the 5 days SIL integrated into the regular salary
removed Tatel from his post at (1/12) of the 13th month pay and the cash should be likewise pro-rated to their 1/12 of the employees.
BaggerWerken on August 24, 2009 due to equivalent of not more than five (5) days of equivalent must fail.
several infractions committed thereat, they service incentive leaves." (b) The cash equivalent of not
subsequently reassigned him to SKI from Section 5.2, Rule II of the more than five (5) days of service
September 16, 2009 to October 12, 2009 The foregoing provision is Implementing Rules of Book VI of the incentive leave;
and then to IPVG from October 21 to 23, applicable where (a) there is no CBA or Labor Code, as amended, promulgated to
2009. Thereafter, and until Tatel filed the other applicable agreement providing for implement RA 7641, further clarifies what (c) One-twelfth of the 13th month
instant complaint for illegal dismissal six retirement benefits to employees, or (b) comprises the "½ month salary" due a pay due the employee.
(6) months later, or on May 4, 2010, he there is a CBA or other applicable retiring employee, to wit:
was not given any other postings or agreement providing for retirement (d) All other benefits that the
assignments. While it may be true that benefits but it is below the requirement set RULE II employer and employee may
respondents summoned him back to work by law. Verily, the determining factor in Retirement Benefits agree upon that should be
through the November 26, 2009 choosing which retirement scheme to included in the computation of the
Memorandum, which Tatel acknowledged apply is still superiority in terms of benefits xxxx employee’s retirement pay.
to have received on December 11, 2009, provided. SEC. 5. Retirement Benefits. xxxx
records are bereft of evidence to show that xxxx
he was given another detail or In the present case, GCHS has a 5.2 Components of One-half (1/2) The foregoing rules are, thus,
assignment. As the "off-detail" period had retirement plan for its faculty and non- Month Salary.— For the purpose of clear that the whole 5 days of SIL are
already lasted for more than six (6) faculty members, which gives it the option determining the minimum retirement pay included in the computation of a retiring
months, Tatel is therefore deemed to have to retire a teacher who has rendered at due an employee under this Rule, the term employees’ pay, as correctly ruled by the
been constructively dismissed. least 20 years of service, regardless of "one-half month salary" shall include all CA.
age, with a retirement pay of one-half (1/2) the following:
b. Retirement (Art. month for every year of service. Universal Robina Sugar Milling Corp.
287) Considering, however, that GCHS (a) Fifteen (15) days salary of the vs. Caballeda, 560 SCRA 115, G.R. No.
computed Filipinas’ retirement pay without employee based on his latest 156644, July 28, 2008, Nachura, J.
Grace Christian High School vs. including one-twelfth (1/12) of her 13th salary rate. As used herein, the
Lavandera, G.R. No. 177845, August 20, month pay and the cash equivalent of her term "salary" includes all Doctrine. The issue of the
2014, Perlas-Bernabe, J. five (5) days SIL, both the NLRC and the remunerations paid by an retroactive effect of R.A. 7641 on prior
CA correctly ruled that Filipinas’ retirement employer to his employees for existing employment contracts has long
been settled. In Enriquez Security agreement between the employer and the documentary requirements, accepted the months being considered as one whole
Services, Inc. vs. Cabotaje, we held: RA employee whereby the latter, after retirement benefits and executed a year.
7641 is undoubtedly a social legislation. reaching a certain age, agrees to sever his quitclaim in favor of URSUMCO.
The law has been enacted as a labor or her employment with the former. The Respondents claim otherwise, contending The CBA in the case at bar
protection measure and as a curative age of retirement is primarily determined that they were merely forced to comply as established 60 as the compulsory
statute that — absent a retirement plan by the existing agreement between the they were no longer given any work retirement age. However, it is not alleged
devised by, an agreement with, or a employer and the employees. However, in assignment and considering that the that either Javier or Llagas had reached
voluntary grant from, an employer — can the absence of such agreement, the severance of their employment with the compulsory retirement age of 60
respond, in part at least, to the financial retirement age shall be fixed by law. Under URSUMCO is a condition precedent for years, but instead that they had rendered
well-being of workers during their twilight Art. 287 of the Labor Code as amended, them to receive their retirement benefits. at least 20 years of service in the School,
years soon following their life of labor. the legally mandated age for compulsory the last three (3) years continuous. Clearly,
There should be little doubt about the fact retirement is 65 years, while the set Cainta Catholic School vs. Cainta the CBA provision allows the employee to
that the law can apply to labor contracts minimum age for optional retirement is 60 Catholic School Employees Union, 489 be retired by the School even before
still existing at the time the statute has years. SCRA 468, G.R. No. 151021, May 4, reaching the age of 60, provided that
taken effect, and that its benefits can be 2006, Tinga, J. he/she had rendered 20 years of service.
reckoned not only from the date of the In this case, it may be stressed Would such a stipulation be valid?
law's enactment but retroactively to the that the CBA does not per se specifically Doctrine. ART. 287. Retirement. Jurisprudence affirms the position of the
time said employment contracts have provide for the compulsory retirement age – Any employee may be retired upon School.
started. nor does it provide for an optional reaching the retirement age established in
retirement plan. It merely provides that the the collective bargaining agreement or Pantranco North Express, Inc. v.
This doctrine has been retirement benefits accorded to an other applicable employment contract. NLRC, cited by petitioners, finds direct
repeatedly upheld and clarified in several employee shall be in accordance with law. application in this case. The CBA involved
cases. Pursuant thereto, this Court Thus, we must apply Art. 287 of the Labor In case of retirement, the in Pantranco allowed the employee to be
imposed two (2) essential requisites in Code which provides for two types of employee shall be entitled to receive such compulsorily retired upon reaching the age
order that R.A. 7641 may be given retirement: (a) compulsory and (b) retirement benefits as he may have of 60 "or upon completing [25] years of
retroactive effect: (1) the claimant for optional. The first takes place at age 65, earned under existing laws and any service to [Pantranco]." On the basis of the
retirement benefits was still in the employ while the second is primarily determined collective bargaining agreement and other CBA, private respondent was compulsorily
of the employer at the time the statute took by the collective bargaining agreement or agreements: Provided, however, That an retired by Pantranco at the age of 52, after
effect; and (2) the claimant had complied other employment contract or employer's employee’s retirement benefits under any 25 years of service. Interpreting Article
with the requirements for eligibility for such retirement plan. In the absence of any collective bargaining agreement and other 287, the Court ruled that the Labor Code
retirement benefits under the statute. provision on optional retirement in a agreements shall not be less than those permitted employers and employees to fix
collective bargaining agreement, other provided herein. the applicable retirement age at below 60
It is evident from the records that employment contract, or employer's years of age. Moreover, the Court also
when respondents were compulsorily retirement plan, an employee may In the absence of a retirement held that there was no illegal dismissal
retired from the service, R.A. 7641 was optionally retire upon reaching the age of plan or agreement providing for retirement since it was the CBA itself that
already in full force and effect. The 60 years or more, but not beyond 65 benefits of employees in the incorporated the agreement reached
petitioners failed to prove that the years, provided he has served at least five establishment, an employee upon between the employer and the bargaining
respondents did not comply with the years in the establishment concerned. reaching the age of sixty (60) years or agent with respect to the terms and
requirements for eligibility under the law That prerogative is exclusively lodged in more, but not beyond sixty-five (65) years conditions of employment; hence, when
for such retirement benefits. In sum, the the employee. which is hereby declared the compulsory the private respondent ratified the CBA
aforementioned requisites were retirement age, who has served at least with his union, he concurrently agreed to
adequately satisfied, thus, warranting the Indubitably, the voluntariness of five (5) years in the said establishment, conform to and abide by its provisions.
retroactive application of R.A. 7641 in this the respondents' retirement is the meat of may retire and shall be entitled to Thus, the Court asserted, "[p]roviding in a
case. the instant controversy. Petitioners retirement pay equivalent to at least one- CBA for compulsory retirement of
postulate that respondents voluntarily half (1/2) month salary for every year of employees after twenty-five (25) years of
Retirement is the result of a retired particularly when Alejandro filed his service, a fraction of at least six (6) service is legal and enforceable so long as
bilateral act of the parties, a voluntary application for retirement, submitted all the
the parties agree to be governed by such they had agreed to cede to management. better physical and mental condition, can Moreover, the United States Court of
CBA." The questioned retirement provisions enjoy them better and longer." Appeals Eighth Circuit, which decided the
cannot be deemed as an imposition case, ultimately concluded that "here the
A similar set of facts informed our foisted on the Union, which very well had We affirm the continued validity of evidence abounds that there was a
decision in Progressive Development the right to have refused to agree to Pantranco and its kindred cases, and thus justifiable cause for [the employee’s]
Corporation v. NLRC. The CBA therein allowing management to retire employees reiterate that under Article 287 of the discharge," his union activities
stipulated that an employee "with [20] with at least 20 years of service. Labor Code, a CBA may validly accord notwithstanding. Certainly, the Union and
years of service, regardless of age, may management the prerogative to optionally the Court of Appeals would have been
be retired at his option or at the option of It should not be taken to mean retire an employee under the terms and better off citing a case wherein the
the company." The stipulation was used by that retirement provisions agreed upon in conditions mutually agreed upon by decision actually concluded that the
management to compulsorily retire two the CBA are absolutely beyond the ambit management and the bargaining union, employee was invalidly dismissed for
employees with more than 20 years of of judicial review and nullification. A CBA, even if such agreement allows for union activities despite the ostensible
service, at the ages of 45 and 38. The as a labor contract, is not merely retirement at an age lower than the existence of a valid cause for termination.
Court affirmed the validity of the stipulation contractual in nature but impressed with optional retirement age or the compulsory
on retirement as consistent with Article public interest. If the retirement provisions retirement age. The Court of Appeals Nonetheless, the premise
287 of the Labor Code. in the CBA run contrary to law, public gravely erred in refusing to consider this warrants considering whether
morals, or public policy, such provisions case from the perspective of Pantranco, or management may be precluded from
Philippine Airlines, Inc. v. Airline may very well be voided. Certainly, a CBA from the settled doctrine enunciated retiring an employee whom it is entitled to
Pilots Association of the Phils. further provision or employment contract that therein. retire upon a determination that the true
bolsters the School’s position. At would allow management to subvert cause for compulsory retirement is the
contention therein was a provision of the security of tenure and allow it to What the Court of Appeals did employee’s union activities.
PAL-ALPAP Retirement Plan, the Plan unilaterally "retire" employees after one instead was to favorably consider the
having subsequently been misquoted in month of service cannot be upheld. claim of the Union that the real purpose The law and this Court frowns
the CBA mutually negotiated by the Neither will the Court sustain a retirement behind the retirement of Llagas and Javier upon unfair labor practices by
parties. The Plan authorized PAL to clause that entitles the retiring employee was to "bust" the union, they being its management, including so-called union-
exercise the option of retirement over to benefits less than what is guaranteed president and vice-president, respectively. busting. Such illegal practices will not be
pilots who had chosen not to retire after under Article 287 of the Labor Code, To that end, the appellate court favorably sustained by the Court, even if guised
completing 20 years of service or logging pursuant to the provision’s express proviso adopted the citation by the Union of the under ostensibly legal premises. But with
over 20,000 hours for PAL. After PAL thereto in the provision. American case of NLRB v. Ace Comb, respect to an active unionized employee
exercised such option over a pilot, ALPAP Co., which in turn was taken from a who claims having lost his/her job for
charged PAL with illegal dismissal and Yet the CBA in the case at bar popular local labor law textbook. The union activities, there are different
union-busting. While the Secretary of contains no such infirmities which must be citation stated that "[f]or the purpose of considerations presented if the termination
Labor upheld the unilateral retirement, it stricken down. There is no essential determining whether or not a discharge is is justified under just or authorized cause
nonetheless ruled that PAL should first difference between the CBA provision in discriminatory, it is necessary that the under the Labor Code; and if separation
consult with the pilot to be retired before it this case and those we affirmed in underlying reason for the discharge be from service is effected through the
could exercise such option. The Court Pantranco and Progressive. Twenty years established. The fact that a lawful cause exercise of a duly accorded management
struck down that proviso, ruling that "the is a more than ideal length of service an for discharge is available is not a defense prerogative to retire an employee. There is
requirement to consult the pilots prior to employee can render to one employer. where the employee is actually discharged perhaps a greater imperative to recognize
their retirement defeats the exercise by Under ordinary contemplation, a CBA because of his union activities." the management prerogative on retirement
management of its option to retire the said provision entitling an employee to retire than the prerogative to dismiss employees
employees, [giving] the pilot concerned an after 20 years of service and accordingly Reliance on NLRB v. Ace Comb, for just or authorized causes. For one,
undue prerogative to assail the decision of collect retirement benefits is "reward for Co. was grossly inapropos. The case did there is a greater subjectivity, not to
management." services rendered since it enables an not involve an employee sought to be mention factual dispute, attached to the
employee to reap the fruits of his labor — retired, but one who cited for termination concepts of just or authorized cause than
By their acceptance of the CBA, particularly retirement benefits, whether from employment for cause, particularly for retirement which normally contemplates
the Union and its members are obliged to lump-sum or otherwise — at an earlier violating Section 8(a)(3) of the National merely the attainment of a certain age or a
abide by the commitments and limitations age, when said employee, in presumably Labor Relations Act, or for insubordination. certain number of years in the service. It
would be easier for management desirous their leadership role alone. Should we more than ten (10) employees. As used
to eliminate pesky union members to entertain such a notion, the detriment is Unless the parties provide for in this sub-section;
abuse the prerogative of termination for ultimately to the union itself, promoting as broader inclusions, the term one-half xxxx
such purpose since the determination of it would a stagnating entrenched (1/2) month salary shall mean fifteen SECTION 5
just or authorized cause is rarely a leadership. (15) days plus one-twelfth (1/12) of the Retirement Benefits.
simplistic question, but involves facts 13th month pay and the cash
highly prone to dispute and subjective We can thus can comfortably equivalent of not more than five (5) 5.1 In the absence of an applicable
interpretation. uphold the principle, as reiterated in days of service incentive leaves. agreement or retirement plan, an
Philippine Airlines, that the exercise by the employee who retires pursuant to the Act
On the other hand, the exercise employer of a valid and duly established Retail, service and agricultural shall be entitled to retirement pay
by management of its retirement prerogative to retire an employee does not establishments or operations equivalent to at least one-half (―) month
prerogative is less susceptible to constitute unfair labor practice. employing not more than (10) salary for every year of service, a fraction
dubitability as to the question whether an employees or workers are exempted of at least six (6) months being considered
employee could be validly retired. The only Serrano vs. Severino Santos Transit, from the coverage of this provision. as one whole year.
factual matter to consider then is whether G.R. No. 187698, August 9, 2010, xxxx
the employee concerned had attained the Carpio-Morales, J. Further, the Implementing Rules 5.2 Components of One-half (―) Month
requisite age or number of years in service of said law provide: Salary. — For the purpose of determining
pursuant to the CBA or employment Doctrine. Republic Act No. 7641 RULE II the minimum retirement pay due an
agreement, or if none, pursuant to Article which was enacted on December 9, Retirement Benefits employee under this Rule, the term "one-
287 of the Labor Code. In fact, the 1992 amended Article 287 of the Labor half month salary" shall include all of the
question of the amount of retirement Code by providing for retirement pay to SECTION 1. following:
benefits is more likely to be questioned qualified private sector employees in the General Statement on Coverage.
than the retirement itself. Evidently, it more absence of any retirement plan in the — This Rule shall apply to all (a) Fifteen (15) days salary of
clearly emerges in the case of retirement establishment. The pertinent provision of employees in the private sector, the employee based on his
that management would anyway have the said law reads: regardless of their position, latest salary rate. As used
right to retire an employee, no matter the designation or status and irrespective herein, the term "salary"
degree of involvement of said employee in Section 1. Article 287 of of the method by which their wages are includes all remunerations
union activities. Presidential Decree No. 442, as amended, paid, except to those specifically paid by an employer to his
otherwise known as the Labor Code of the exempted under Section 2 hereof. As employees for services
There is another point that Philippines, is hereby amended to read as used herein, the term "Act" shall refer to rendered during normal
militates against the Union. A ruling in its follows: Republic Act No. 7641 which took effect on working days and hours,
favor is tantamount to a concession that a xxxx January 7, 1993. whether such payments are
validly drawn management prerogative to In the absence of a retirement SECTION 2 fixed or ascertained on a time,
retire its employees can be judicially plan or agreement providing for Exemptions. — This Rule shall task, piece of commission
interfered on a showing that the employee retirement benefits of employees in the not apply to the following employees: basis, or other method of
in question is highly valuable to the union. establishment, an employee upon 2.1 Employees of the National calculating the same, and
Such a rule would be a source of mischief, reaching the age of sixty (60) years or Government and its political subdivisions, includes the fair and reasonable
even if narrowly carved out by the Court, more, but not beyond sixty-five (65) including Government-owned and/or value, as determined by the
for it would imply that an active union years which is hereby declared the controlled corporations, if they are covered Secretary of Labor and
member or officer may be, by reason of compulsory retirement age, who by the Civil Service Law and its Employment, of food, lodging or
his/her importance to the union, somehow has served at least five (5) years in the regulations. other facilities customarily
exempted from the normal standards of said establishment, may retire and shall 2.2 Domestic helpers and persons in the furnished by the employer to his
retirement applicable to the other, perhaps be entitled to retirement pay equivalent personal service of another. employees. The term does not
less vital members of the union. Indeed, to at least one-half (1/2) month salary for 2.3 Employees of retail, service and include cost of living allowances,
our law’s protection of the right to organize every year of service, a fraction of at agricultural establishment or profit-sharing payments and other
labor does not translate into perpetual job least six (6) months being considered operations regularly employing not monetary benefits which are not
security for union leaders by reason of as one whole year. considered as part of or
 integrated into the regular salary hand, are paid a certain percentage of the not automatically exempted from the the retirement age established in the
of the employees. bus’ earnings for the day. grant of service incentive leave, unless, collective bargaining agreement or other
(b) The cash equivalent of not they fall under the classification of field applicable employment contract.
more than five (5) days of It bears emphasis that under P.D. personnel.
service incentive leave; 851 or the SIL Law, the exclusion from its xxxx In case of retirement, the
(c) One-twelfth of the 13th coverage of workers who are paid on a According to Article 82 of the employee shall be entitled to receive such
month pay due the employee. purely commission basis is only with Labor Code, "field personnel" shall refer retirement benefits as he may have
(d) All other benefits that the respect to field personnel. The more to non-agricultural employees who earned under existing laws and any
employer and employee may recent case of Auto Bus Transport regularly perform their duties away collective bargaining agreement and other
agree upon that should be Systems, Inc., v. Bautista clarifies that an from the principal place of business or agreements: Provided, however, That an
included in the computation of the employee who is paid on purely branch office of the employer and employee’s retirement benefits under any
employee’s retirement pay. commission basis is entitled to SIL: whose actual hours of work in the field collective bargaining agreement and other
cannot be determined with reasonable agreements shall not be less than those
Admittedly, petitioner worked for A careful perusal of said certainty. This definition is further provided herein.
14 years for the bus company which did provisions of law will result in the elaborated in the Bureau of Working
not adopt any retirement scheme. Even if conclusion that the grant of service Conditions (BWC), Advisory Opinion to In the absence of a retirement
petitioner as bus conductor was paid on incentive leave has been delimited by the Philippine Technical-Clerical Commercial plan or agreement providing for retirement
commission basis then, he falls within the Implementing Rules and Regulations of Employees Association which states that: benefits of employees in the
coverage of R.A. 7641 and its the Labor Code to apply only to those establishment, an employee upon
implementing rules. As thus correctly ruled employees not explicitly excluded by As a general rule, [field reaching the age of sixty (60) years or
by the Labor Arbiter, petitioner’s retirement Section 1 of Rule V. According to the personnel] are those whose performance more, but not beyond sixty-five (65) years
pay should include the cash equivalent of Implementing Rules, Service Incentive of their job/service is not supervised by the which is hereby declared the compulsory
the 5-day SIL and 1/12 of the 13th month Leave shall not apply to employees employer or his representative, the retirement age, who has served at least
pay. classified as "field personnel." The workplace being away from the principal five (5) years in the said establishment,
phrase "other employees whose office and whose hours and days of work may retire and shall be entitled to
The affirmance by the appellate performance is unsupervised by the cannot be determined with reasonable retirement pay equivalent to at least one-
court of the reliance by the NLRC on R & employer" must not be understood as a certainty; hence, they are paid specific half (1/2) month salary for every year of
E Transport, Inc. is erroneous. In said separate classification of employees to amount for rendering specific service or service, a fraction of at least six (6)
case, the Court held that a taxi driver paid which service incentive leave shall not be performing specific work. If required to be months being considered as one whole
according to the "boundary system" is not granted. Rather, it serves as an at specific places at specific year.
entitled to the 13th month and the SIL pay, amplification of the interpretation of the times, employees including drivers
hence, his retirement pay should be definition of field personnel under the cannot be said to be field personnel Unless the parties provide for
computed on the sole basis of his salary. Labor Code as those "whose actual hours despite the fact that they are broader inclusions, the term one-half (1/2)
of work in the field cannot be determined performing work away from the month salary shall mean fifteen (15) days
For purposes, however, of with reasonable certainty." principal office of the employee. plus one-twelfth (1/12) of the 13th month
applying the law on SIL, as well as on pay and the cash equivalent of not more
retirement, the Court notes that there is The same is true with respect Obusan vs. PNB, G.R. No. 181178, July than five (5) days of service incentive
a difference between drivers paid under to the phrase "those who are engaged 26, 2010, Nachura, J. leaves.
the "boundary system" and conductors on task or contract basis, purely
who are paid on commission basis. commission basis." Said phrase should Doctrine. The pertinent law on Undoubtedly, under this
be related with "field this matter, Article 287 of the Labor Code, provision, the retirement age is primarily
In practice, taxi drivers do not personnel," applying the rule on ejusdem as amended by Republic Act No. 7641, determined by the existing agreement or
receive fixed wages. They retain only generis that general and unlimited terms which took effect on January 7, 1993, employment contract. Absent such an
those sums in excess of the "boundary" or are restrained and limited by the particular provides – agreement, the retirement age shall be
fee they pay to the owners or operators of terms that they follow. Hence, employees fixed by law. The above-cited law
the vehicles. Conductors, on the other engaged on task or contract basis ART. 287. Retirement. – Any mandates that the compulsory retirement
or paid on purely commission basis are employee may be retired upon reaching age is at 65 years, while the minimum age
for optional retirement is set at 60 years. 3. For service rendered after employees’ retirement benefits under any opened for scrutiny. The employees had
Moreover, Article 287 of the Labor Code, privatization, a Member, regardless CBA and other agreements shall not be every opportunity to question the plan if,
as amended, applies only to a situation whether or not he received GSIS less than those provided therein. By this indeed, it would not be beneficial to the
where (1) there is no CBA or other Retirement Gratuity Benefits, shall be yardstick, the PNB-RRP complies. employees, as compared to what was
applicable employment contract providing entitled to one hundred twelve (112%) mandated by Article 287 of the Labor
for retirement benefits for an employee; or percent of his "Latest Monthly Plan However, company retirement Code. Consequently, the union of PNB’s
(2) there is a collective bargaining Salary" for every year of service rendered, plans must not only comply with the rank-and-file employees recognized it as a
agreement or other applicable a fraction of at least six (6) months being standards set by existing labor laws, but legally-compliant and reasonable
employment contract providing for considered as one (1) whole year. they should also be accepted by the retirement plan by the act of incorporating
retirement benefits for an employee, but it employees to be commensurate to their it in their CBA with PNB.
is below the requirement set by law. The The vesting multiple of one faithful service to the employer within the
rationale for the first situation is to prevent hundred twelve (112%) percent that is requisite period. With respect to Obusan and the
the absurd situation where an employee, applied to the "Latest Monthly Plan Salary" PNB Supervisors and Officers Association,
deserving to receive retirement benefits, is is derived as the sum of fifteen (15) days To our mind, Obusan’s invocation of which she was the President when she
denied them through the nefarious of the "Latest Daily Plan Salary" plus five of Jaculbe on account of her lack of was compulsorily retired, there is nothing
scheme of employers to deprive (5) days of the service incentive leave consent to the PNB-RRP, particularly as on record to show that they expressed
employees of the benefits due them under (based on Latest Daily Plan Salary) plus regards the provision on compulsory their dissent to the PNB-RRP. This
existing labor laws. The rationale for the one-twelfth (1/12) of the "Latest Monthly retirement age, is rather misplaced. deafening silence eloquently speaks of
second situation is to prevent private Plan Salary." The Daily Plan Salary used is their lack of disagreement with its
contracts from derogating from the public computed as "Latest Monthly Plan Salary" It is true that her membership in provisions. It was only at the time that she
law. multiplied by thirteen (13) months and the PNB-RRP was made automatic, to wit was to be compulsorily retired that Obusan
divided by two hundred fifty-one (251) – questioned the PNB-RRP’s provision on
In this case, Obusan was initially days. compulsory retirement age.
hired in 1979 as a government employee, Section 1. Membership.
PNB then being a government-owned and Moreover, the PNB-RRP also Membership in the Plan shall be automatic Besides, we already had the
controlled corporation. As such, she was considered the effects of PNB’s for all full-time regular and permanent occasion to strike down the added
governed by civil service laws, and the privatization, as it also provided for officers and employees of the Bank as of requirement that an employer must first
compulsory retirement age, as imposed by additional benefits to those employees the effectivity date of the Plan. For consult its employee prior to retiring him,
law, was at 65 years. Peculiar to her who were not qualified to receive the GSIS employees hired after the effectivity of this as this requirement unduly constricts the
situation, however, was that the corporate Retirement Gratuity Benefits, viz. – Plan, their membership shall be effective exercise by management of its option to
entity that hired her ceased to be on "Date Entered Bank." retire the said employee. Due process only
government-owned and controlled when it 2. A Member who failed to qualify requires that notice of the employer’s
was privatized in 1996. As a result of the to receive GSIS Retirement Gratuity The records show that the PNB decision to retire an employee be given to
privatization of PNB, all of its officers and Benefits shall be entitled [to] one Month Board of Directors approved the PNB-RRP the employee.
employees were deemed retired from the Basic Salary (as of May 26, 1996) for on December 22, 2000. On February 21,
government service. Consequently, many every year of service rendered before 2001, PNB informed all of its officers and Finally, it is also worthy to
of them, Obusan included, received their privatization. employees about it, complete with its mention that, unlike in Jaculbe, the PNB-
respective retirement gratuities. terms and conditions and the guidelines RRP is solely and exclusively funded by
Retirement plans allowing for its implementation. Then, the PNB- PNB, and no financial burden is imposed
It cannot be said that the PNB- employers to retire employees who have RRP was registered with the BIR and, on the employees for their retirement
RRP is a retirement plan providing not yet reached the compulsory retirement later, was recognized by the Philnabank benefits.
retirement benefits less than what the law age of 65 years are not per se repugnant Employees Association in the CBA it
requires. In fact, in the computation of the to the constitutional guaranty of security of entered with PNB. Paz vs. Northern Tobacco Redrying,
employees’ retirement pay, the plan tenure. By its express language, the Labor G.R. No. 199554, February 18, 2015,
factored what Article 287 requires. Thus Code permits employers and employees With the information properly Leonen, J.
the plan provides: to fix the applicable retirement age at 60 disseminated to all of PNB’s officers and
years or below, provided that the employees, the PNB-RRP was then
 Doctrine. An employer may "Zenaida Paz’s retirement pay should be The formula that petitioner months [petitioner Paz] actually rendered
provide for retirement benefits in an computed pursuant to RA 7641 and that all proposes, wherein a year of work is work [for respondent NTRCI]." On the
agreement with its employees such as in a the months she was engaged to work for equivalent to actual work rendered for 303 other hand, both the Labor Arbiter and the
Collective Bargaining Agreement. respondent for the last twenty eight (28) days, is both unfair and inapplicable, Court of Appeals established from the
Otherwise, Article 287 of the Labor Code, years should be added and divide[d] by six considering that Articles 283 and 284 records that she rendered at least six
as amended, governs. (for a fraction of six months is considered provide that in connection with separation months of service for 1995, 1999, and
as one year) to get the number of years pay, a fraction of at least six months shall 2000 only.
Since respondent NTRCI failed to her retirement pay should be computed." be considered one whole year. Under
present a copy of a Collective Bargaining these provisions, an employee who Based on these factual findings,
Agreement on the alleged retirement The National Labor Relations worked for only six months in a given year retirement pay pursuant to Article 287 of
policy, we apply Article 287 of the Labor Commission also discussed that applying — which is certainly less than 303 days — the Labor Code was correctly computed at
Code, as amended by Republic Act No. the computation of separation pay in is considered to have worked for one 12,487.50 and was awarded to petitioner
7641. Philippine Tobacco to this case "would whole year. Paz.
render nugatory the very purpose of RA
Respondent NTRCI followed the 7641, which seeks to reward employees of . . . . Finally, Manila Hotel Goodyear Phils. vs. Angus, G.R. No.
formula in Article 287 and offered their long and dedicated service to their Company v. CIR did not rule that seasonal 185449, November 12, 2014, Del
petitioner Paz the amount employer, as well as its humanitarian workers are considered at work during off- Castillo, J.
of P12,487.50 as retirement pay based on purpose to provide for the retiree’s season with regard to the computation of
the three years she worked for at least six sustenance and hopefully even comfort, separation pay. Said case merely held Doctrine. In Aquino v. National
months in 1995, 1999, and 2000. when he no longer has the stamina to that, in regard to seasonal workers, the Labor Relations Commission, citing
continue earning his livelihood." employer-employee relationship is not Batangas Laguna Tayabas Bus Company
The Labor Arbiter agreed with severed during off-season but merely v. Court of Appeals and University of the
respondent NTRCI’s computation based This court in Philippine Tobacco suspended. East v. Hon. Minister of Labor, the Court
on these three years and reached the explained its computation of separation held that an employee is entitled to
same amount as petitioner Paz’s pay as follows: Philippine Tobacco considered recover both separation pay and
retirement pay. The amount of separation pay is based on Articles 283 and 284 of the Labor Code on retirement benefits in the absence of a
two factors: the amount of monthly salary separation pay, and these articles include specific prohibition in the Retirement Plan
On appeal, the National Labor and the number of years of service. the proviso "a fraction of at least six (6) or CBA. Concomitantly, the Court ruled
Relations Commission found that Although the Labor Code provides months shall be considered one (1) whole that an employee's right to receive
petitioner Paz "became a regular seasonal different definitions as to what constitutes year." separation pay in addition to retirement
employee by virtue of her long years of "one year of service," Book Six does not benefits depends upon the provisions of
service and the repetitive hiring of her specifically define "one year of service" for While the present case involves the company's Retirement Plan and/or
services by respondent NTRCI every purposes of computing separation pay. retirement pay and not separation pay, CBA.
season."87 It then considered her as However, Articles 283 and 284 both state Article 287 of the Labor Code on
having worked for every tobacco season in connection with separation pay that a retirement pay similarly provides that "a Here, petitioners allege that there
from 1974 to 2003 or for a total of 29 fraction of at least six months shall be fraction of at least six (6) months being is a provision in the last CBA against the
years. considered one whole year. Applying this considered as one whole year." recovery of both retirement benefits and
to the case at bar, we hold that the amount separation pay. To support their claim,
The National Labor Relations of separation pay which respondent Thus, this court’s reading of this petitioners submitted a copy of what
Commission discussed that "[i]t would be a members of the Lubat and Luris groups proviso in the Labor Code in Philippine appears to be a portion of the company
great injustice if [petitioner Paz’s]services should receive is one-half (1/2) their Tobacco applies in this case. An employee CBA entitled "Retirement Plan, Life
which did not last long for six months be respective average monthly pay during the must have rendered at least six months in Insurance, Physical Disability Pay and
disregarded in computing her retirement last season they worked multiplied by the a year for said year to be considered in the Resignation Pay." Section 1, Article XI
pay especially so that it is upon the sole number of years they actually rendered computation. thereof provides that the availment of
discretion of the respondent company on service, provided that they worked for at retirement benefits precludes entitlement
how long her services for a given season least six months during a given year. The Court of Appeals found "no to any separation pay. The same,
was required." Thus, it explained that positive proof o[n] the total number of however, can hardly be considered as
substantial evidence because it does not showing that what petitioners decided to severance from employment, designed to employment to end the employment
appear to be an integral part of grant Angus was her early retirement provide the employee with the wherewithal relationship.
Goodyear's CBA. Even assuming that it is, benefits, they cannot now be permitted to during the period that he is looking for
it would still not suffice as there is no deny having paid such benefit. another employment and is recoverable Section 33. Termination Initiated
showing if the CBA under which the said only in instances enumerated under by the Domestic Worker. – The domestic
provision is found was the one in force at Petitioners further argue that Articles 283 and 284 of the Labor Code or worker may terminate the employment
the time material to this case. On the other Angus is not entitled to retirement pay in illegal dismissal cases when relationship at any time before the
hand, Angus presented the parties' 2001- because she does not meet the reinstatement is not feasible. In the case expiration of the contract for any of the
2004 CBA and upon examination of the requirements enumerated in the at bar, Article 283 clearly entitles Angus to following causes:
same, the Court agrees with her that it Retirement Plan provision of the CBA. The separation pay apart from the retirement
does not contain any restriction on the Court disagrees. While it is obvious that benefits she received from petitioners. (a) Verbal or emotional abuse of
availment of benefits under the company's Angus is not entitled to compulsory the domestic worker by the
Retirement Plan and of separation pay. retirement as she has not yet reached the R.A. No. 10361 (Domestic Workers’ Act employer or any member of the
Indeed, the Labor Arbiter and the NLRC age of 60, there is no denying, however, or Batas Kasambahay) household;
erred in ignoring this material piece of that she is qualified for early retirement. (b) Inhuman treatment including
evidence which is decisive of the issue Under the provision of the Retirement Plan Section 32. Termination of physical abuse of the domestic
presented before them. The CA, thus, of the CBA as earlier quoted, a worker Service. – Neither the domestic worker nor worker by the employer or any
committed no error in reversing the who is at least 50 years old and with at the employer may terminate the contract member of the household;
Decisions of the labor tribunals when it least 15 years of service, and who has before the expiration of the term except for (c) Commission of a crime or
ruled in favor of Angus' entitlement to both been recommended by the President of grounds provided for in Sections 33 and offense against the domestic
retirement benefits and separation pay. the Union for early retirement and duly 34 of this Act. If the domestic worker is worker by the employer or any
approved by the Human Resources unjustly dismissed, the domestic worker member of the household;
Moreover, the Court agrees with Director, shall be entitled to lump sum shall be paid the compensation already (d) Violation by the employer of
the CA that the amount Angus received retirement benefits. At the time of her earned plus the equivalent of fifteen (15) the terms and conditions of the
from petitioners represented only her termination, Angus was already 57 years days work by way of indemnity. If the employment contract and other
retirement pay and not separation pay. A of age and had been in the service for domestic worker leaves without justifiable standards set forth under this
cursory reading of petitioners' September more than 34 years. The exchange of reason, any unpaid salary due not law;
18, 2001 letter notifying Angus of her correspondence between Angus and exceeding the equivalent fifteen (15) days (e) Any disease prejudicial to the
termination from employment shows that Ramos also shows that the latter, as work shall be forfeited. In addition, the health of the domestic worker, the
they granted her early retirement benefits Goodyear's Human Resources Director, employer may recover from the domestic employer, or member/s of the
pegged at 47 days' pay per year of offered, recommended and approved the worker costs incurred related to the household; and
service. This rate was arrived at after grant of early retirement in favor of the deployment expenses, if (f) Other causes analogous to the
petitioners considered respondent's length former. Clearly, all the requirements for any: Provided, That the service has been foregoing.
of service with the company, as well as her Angus' availment of early retirement under terminated within six (6) months from the
age which qualified her for early the Retirement Plan of CBA were domestic worker’s employment. Section 34. Termination Initiated
retirement. In fact, petitioners were even substantially complied with. by the Employer. – An employer may
explicit in stating in the said letter that the If the duration of the domestic terminate the services of the domestic
amount she was to receive would come It is worthy to mention at this service is not determined either in worker at any time before the expiration of
from the company's Pension Fund, which, point that retirement benefits and stipulation or by the nature of the service, the contract, for any of the following
as correctly asserted by Angus, was separation pay are not mutually exclusive. the employer or the domestic worker may causes:
created to cover retirement benefit Retirement benefits are a form of reward give notice to end the working relationship (a) Misconduct or willful
payment of employees. In addition, the for an employee's loyalty and service to an five (5) days before the intended disobedience by the domestic
document showing a detailed account of employer and are earned under existing termination of the service. worker of the lawful order of the
Angus' termination benefits speaks for laws, CBAs, employment contracts and employer in connection with the
itself as the same is entitled "Sununary of company policies. On the other hand, The domestic worker and the former’s work;
Retirement Pay and other Company separation pay is that amount which an employer may mutually agree upon written (b) Gross or habitual neglect or
Benefits." In view therefore of the clear employee receives at the time of his notice to pre-terminate the contract of inefficiency by the domestic
 worker in the performance of that their complaints for illegal dismissal terms shall, unless the context
duties; were duly filed within the four-year In like manner, while the filing of indicates otherwise, have the
(c) Fraud or willful breach of the prescriptive period since the period during the complaint for illegal dismissal before following meanings:
trust reposed by the employer on which their cases were pending should be the LA interrupted the running of the
the domestic worker; deducted from the period of prescription. prescriptive period, its voluntary "(a) SSS - The Social Security
(d) Commission of a crime or On the other hand, the respondents insist withdrawal left the petitioners in exactly System created by this Act.
offense by the domestic worker that said complaints have already the same position as though no complaint
against the person of the prescribed. Hence, the pivotal question in had been filed at all. The withdrawal of
employer or any immediate resolving the issues hinges on the their complaint effectively erased the "(b) Commission - The Social
member of the employer’s family; resolution of whether the period during tolling of the reglementary period. Security Commission as herein
(e) Violation by the domestic which the petitioners’ cases were pending created.
worker of the terms and should be excluded from the period of A prudent review of the
conditions of the employment prescription. antecedents of the claim reveals that it has "(c) Employer- Any person,
contract and other standards set in fact prescribed due to the petitioners’ natural or juridical, domestic or
forth under this law; Settled is the rule that when one withdrawal of their labor case docketed as foreign, who carries on in the
(f) Any disease prejudicial to the is arbitrarily and unjustly deprived of his NLRC RAB-I-01-1007. Hence, while the Philippines any trade, business,
health of the domestic worker, the job or means of livelihood, the action filing of the said case could have industry, undertaking, or activity
employer, or member/s of the instituted to contest the legality of one’s interrupted the running of the four-year of any kind and uses the services
household; and dismissal from employment constitutes, in prescriptive period, the voluntary of another person who is under
(g) Other causes analogous to essence, an action predicated upon an withdrawal of the petitioners effectively his orders as regards the
the foregoing. injury to the rights of the plaintiff, as cancelled the tolling of the prescriptive employment, except the
contemplated under Article 1146 of the period within which to file their illegal Government and any of its
Section 35. Employment New Civil Code, which must be brought dismissal case, leaving them in exactly the political subdivisions, branches or
Certification. – Upon the severance of the within four years. same position as though no labor case instrumentalities, including
employment relationship, the employer had been filed at all. The running of the corporations owned or controlled
shall issue the domestic worker within five The petitioners contend that the four-year prescriptive period not having by the Government: Provided,
(5) days from request a certificate of period when they filed a labor case on been interrupted by the filing of NLRC That a self-employed person
employment indicating the nature, duration May 14, 1998 but withdrawn on March 22, RAB-I-01-1007, the petitioners’ cause of shall be both employee and
of the service and work performance. 1999 should be excluded from the action had already prescribed in four years employer at the same time.
computation of the four-year prescriptive after their cessation of employment on
c. Prescription period for illegal dismissal cases. October 26, 1997 and November 24, "(d) Employee - Any person who
However, the Court had already ruled that 1997. Consequently, when the petitioners performs services for an
Montero vs. Times Transportation, G.R. the prescriptive period continues even filed their complaint for illegal dismissal, employer in which either or both
No. 190828, March 16, 2015, Reyes, J. after the withdrawal of the case as though separation pay, retirement benefits, and mental or physical efforts are
(Possible Bar Problem) no action has been filed at all. The damages in 2002, their claim, clearly, had used and who receives
applicability of Article 1155 of the Civil already been barred by prescription. compensation for such services,
Doctrine. In the case at bar, Code in labor cases was upheld in the where there is an employer-
October 26, 1997 and November 24, 1997 case of Intercontinental Broadcasting III. Social Legislation employee relationship: Provided,
appear on record to be the dates when the Corporation v. Panganiban where the That a self-employed person
petitioners’ employment were terminated Court held that "although the A. Social Security Act of 1997 shall be both employee and
by TTCI. The antecedent facts that gave commencement of a civil action stops the (R.A. No. 8282) employer at the same time.
rise to the petitioners’ dismissal from running of the statute of prescription or
employment are not disputed in this case. limitations, its dismissal or voluntary a. Definitions
There is no question about the fact that abandonment by plaintiff leaves the "(e) Dependents - The
the petitioners’ complaints for unfair labor parties in exactly the same position as dependents shall be the
"SEC. 8. Terms Defined. - For following:
practice and money claims have already though no action had been commenced at purposes of this Act, the following
prescribed. The petitioners however argue all."
 "(1) The legal spouse "(h) Monthly - The period from instrumentality: Provide employees of the
entitled by law to receive one end of the last payroll period d, however, That this employer engaging the
support from the of the preceding month to the end exemption service of said
member; of the last payroll period of the notwithstanding, any contractors.
current month if compensation is foreign government,
"(2) The legitimate, on hourly, daily or weekly basis; if international "(k) Beneficiaries - The
legitimated or legally on any other basis, 'monthly' shall organization or their dependent spouse until he or she
adopted, and illegitimate mean a period of one (1) month. wholly-owned remarries, the dependent
child who is unmarried, instrumentality legitimate, legitimated or legally
not gainfully employed, "(i) Contribution - The amount employing workers in adopted, and illegitimate children,
and has not reached paid to the SSS by and on behalf the Philippines or who shall be the primary
twenty-one (21) years of of the members in accordance employing Filipinos beneficiaries of the
age, or if over twenty- with Section Eighteen of this Act. outside of the member: Provided, That the
one (21) years of age, Philippines, may enter dependent illegitimate children
he is congenitally or into an agreement with shall be entitled to fifty percent
"(j) Employment - Any service the Philippine
while still a minor has performed by an employee for his (50%) of the share of the
been permanently Government for the legitimate, legitimated or legally
employer except: inclusion of such
incapacitated and adopted
incapable of self- employees in the SSS children: Provided, further, That
support, physically or "(1) Employment purely except those already in the absence of the dependent
mentally; and casual and not for the covered by their legitimate, legitimated children of
purpose of occupation respective civil service the member, his/her dependent
or business of the retirement illegitimate children shall be
"(3) The parent who is employer; systems: Provided, furth
receiving regular entitled to one hundred percent
er, That the terms of (100%) of the benefits. In their
support from the such agreement shall
member. "(2) Service performed absence, the dependent parents
on or in connection with conform with the who shall be the secondary
an alien vessel by an provisions of this Act on beneficiaries of the member. In
"(f) Compensation - All actual employee if he is coverage and amount of the absence of all the foregoing,
remuneration for employment, employed when such payment of contributions any other person designated by
including the mandated cost-of- vessel is outside the and the member as his/her secondary
living allowance, as well as the Philippines; benefits: Provided, finall beneficiary.
cash value of any remuneration y, That the provisions of
paid in any medium other than this Act shall be
cash except that part of the "(3) Service performed supplementary to any "(l) Contingency - The retirement,
remuneration in excess of the in the employ of the such agreement; and death, disability, injury or
maximum salary credit Philippine Government sickness and maternity of the
as Provided under Section or instrumentality or member.
agency thereof; "(5) Such other services
Eighteen of this Act. performed by temporary
and other employees "(m) Average monthly salary
"(g) Monthly salary credit - The "(4) Service performed which may be excluded credit - The result obtained by
compensation base for in the employ of a by regulation of the dividing the sum of the last sixty
contributions and benefits as foreign government or Commission. (60) monthly salary credits
indicated in the schedule in international Employees of bona fide immediately preceding the
Section Eighteen of this Act. organization, or their independent contractors semester of contingency by sixty
wholly-owned shall not be deemed (60), or the result obtained by
dividing the sum of all the eighty five (1985), the number of not over sixty (60) years of age continue for his employees shall
monthly salary credits paid prior calendar years in which six (6) or and their employers: Provided, remain under the employer's
to the semester of contingency by more contributions have been That in the case of domestic management and control unless
the number of monthly paid from the year of coverage up helpers, their monthly income there is an existing agreement to
contributions paid in the same to the calendar year containing shall not be less than One the contrary: Provided, finally,
period, whichever is the semester prior to the thousand pesos (P1,000.00) a That nothing in this Act shall be
greater: Provided, That the injury contingency: Provided, That the month: Provided, further, That construed as a limitation on the
or sickness which caused the Commission may provide for a any benefit already earned by the right of employers and
disability shall be deemed as the different number of contributions employees under private benefit employees to agree on and adopt
permanent disability for the in a calendar year for it to be plans existing at the time of the benefits which are over and
purpose of computing the considered as a credited year of approval of this Act shall not be above those Provided under this
average monthly salary credit. service. discontinued, reduced or Act.
otherwise
"(n) Average daily salary credit- "(r) Member - The worker who is impaired: Provided, further, That "SEC. 9-A. Compulsory
The result obtained by dividing covered under Section Nine and private plans which are existing Coverage of the Self-Employed. -
the sum of the six (6) highest Section Nine-A of this Act. and in force at the time of Coverage in the SSS shall also
monthly salary credits in the compulsory coverage shall be be compulsory upon such self-
twelve-month period immediately integrated with the plan of the employed persons as may be
"(s) Self-employed - Any person SSS in such a way where the determined by the Commission
preceding the semester of whose income is not derived from
contingency by one hundred employer's contribution to his under such rules and regulations
employment, as defined under private plan is more than that as it may prescribe, including but
eighty (180). this Act, as well as those workers required of him in this Act, he not limited to the following:
enumerated in Section Nine-A shall pay to the SSS only the
"(o) Semester - A period of two hereof. contribution required of him and "1. All self-employed
(2) consecutive quarters ending he shall continue his contribution professionals;
in the quarter of contingency. "(t) Net earnings - Net income to such private plan less his
before income taxes plus non- contribution to the SSS so that "2. Partners and single
"(p) Quarter - A period of three (3) cash charges such as the employer's total contribution proprietors of
consecutive calendar months depreciation and depletion to his benefit plan and to the SSS businesses;
ending on the last day of March, appearing in the regular financial shall be the same as his
June, September and December. statement of the issuing or contribution to his private benefit "3. Actors and
assuming institution. plan before the compulsory actresses, directors,
"(q) Credited years of service - coverage: Provided, further, That scriptwriters and news
For a member covered prior to "(u) Fixed charges - Recurring any changes, adjustments, correspondents who do
January nineteen hundred and expense such as amortization of modifications, eliminations or not fall within the
eighty five (1985) minus the debt discount or rentals for improvements in the benefits to definition of the term
calendar year of coverage plus leased properties, including be available under the remaining "employee" in Section 8
the number of calendar years in interest on funded and unfunded private plan, which may be (d) of this Act;
which six (6) or more debt. necessary to adopt by reason of
contributions have been paid the reduced contributions thereto "4. Professional
from January nineteen hundred b. Compulsory as a result of the integration, shall athletes, coaches,
and eighty five (1985) up to the members be subject to agreements trainers and jockeys;
calendar year containing the between the employers and and
semester prior to the contingency. "SEC. 9. Coverage. - (a) employees
For a member covered in or after Coverage in the SSS shall be concerned: Provided, further, "5. Individual farmers
January nineteen hundred and compulsory upon all employees That the private benefit plan and fishermen.
which the employer shall
 "Unless otherwise specified and advisable by the payment of contributions shall be allowed,
herein, all provisions of this Act applicable Commission, the collection and "2. By issuing a warrant except as Provided in this Section.
to covered employees shall also be remittance of contributions shall to the Sheriff of any
applicable to the covered self-employed be made quarterly or semi- province or city "SEC. 28. Penal Clause. - (a)
persons. annually in advance, the commanding him to levy Whoever, for the purpose of causing any
contributions payable by the upon and sell any real payment to be made under this Act, or
c. Voluntary members employees to be advanced by and personal property of under an agreement thereunder, where
their respective the debtor. The Sheriff's none is authorized to be paid, shall make
"(b) Spouses who employers: Provided, That upon sale by virtue of said or cause to be made false statement or
devote full time to managing the separation of an employee, any warrant shall be representation as to any compensation
household and family affairs, contribution so paid in advance governed by the same paid or received or whoever makes or
unless they are also engaged in but not due shall be credited or procedure prescribed for causes to be made any false statement of
other vocation or employment refunded to his employer. executions against a material fact in any claim for any benefit
which is subject to mandatory property upon payable under this Act, or application for
coverage, may be covered by the "(b) The contributions judgments by a court of loan with the SSS, or whoever makes or
SSS on a voluntary basis. payable under this Act in cases record. causes to be made any false statement,
where an employer refuses or representation, affidavit or document in
"(c) Filipinos recruited by neglects to pay the same shall be "(d) The last complete connection with such claim or loan, shall
foreign-based employers for collected by the SSS in the same record of monthly contributions suffer the penalties Provided for in Article
employment abroad may be manner as taxes are made paid by the employer or the One hundred seventy-two of the Revised
covered by the SSS on a collectible under the National average of the monthly Penal Code.
voluntary basis. Internal Revenue Code, as contributions paid during the past
amended. Failure or refusal of three (3) years as of the date of
d. Non-payment of the employer to pay or remit the filing of the action for collection "(b) Whoever shall obtain or
premium contributions herein prescribed shall be presumed to be the receive any money or check under this Act
shall not prejudice the right of the monthly contributions payable by or any agreement thereunder, without
"SEC. 22. Remittance of covered employee to the benefits and due from the employer to the being entitled thereto with intent to defraud
Contributions. -- (a) The of the coverage. SSS for each of the unpaid any member, employer or the SSS, shall
contributions imposed in the "The right to institute the month, unless contradicted and be fined not less than Five thousand
preceding Section shall be necessary action against the overcome by other pesos (P5,000.00) nor more than Twenty
remitted to the SSS within the employer may be commenced evidence: Provided, That the SSS thousand pesos (P20,000.00) and
first ten (10) days of each within twenty (20) years from the shall not be barred from imprisoned for not less than six (6) years
calendar month following the time the delinquency is known or determining and collecting the and one (1) day nor more than twelve (12)
month for which they are the assessment is made by the true and correct contributions due years.
applicable or within such time as SSS, or from the time the benefit the SSS even after full payment
the Commission may prescribe. accrues, as the case may be. pursuant to this paragraph, nor "(c) Whoever buys, sells, offers
Every employer required to "(c) Should any person, natural or shall the employer be relieved of for sale, uses, transfers or takes or gives
deduct and to remit such juridical, default in any payment his liability under Section Twenty- in exchange, or pledges or gives in
contributions shall be liable for of contributions, the Commission eight of this Act. pledge, except as authorized in this Act or
their payment and if any may also collect the same in in regulations made pursuant thereto, any
contribution is not paid to the either of the following ways: "SEC. 22-A. Remittance of stamp, coupon, ticket, book or other
SSS as herein prescribed, he Contributions of Self-Employed Member. - device, prescribed pursuant to Section
shall pay besides the contribution "1. By an action in court, Self-employed members shall remit their Twenty-three hereof by the Commission
a penalty thereon of three which shall hear and monthly contributions quarterly on such for the collection or payment of
percent (3%) per month from the dispose of the case in dates and schedules as the Commission contributions required herein, shall be
date the contribution falls due preference to any other may specify through rules and fined not less than Five thousand pesos
until paid. If deemed expedient civil action; or regulations: Provided, That no retroactive
(P5,000.00) nor more than Twenty more than Twenty thousand pesos action may be filed by the SSS in the city (1) The legal spouse
thousand pesos (P20,000.00), or (P20,000.00) and imprisonment for not or municipality where the SSS office is entitled by law to receive
imprisoned for not less than six (6) years less than six (6) years and one (1) day nor located, if the violation was committed support from the
and one (1) day nor more than twelve (12) more than twelve (12) years. within its territorial jurisdiction or in Metro member;
years, or both, at the discretion of the Manila, at the option of the SSS. (2) The legitimate,
court. "(f) If the act or omission legitimated or legally
penalized by this Act be committed by an *Some parts of the foregoing adopted, and illegitimate
"(d) Whoever, with intent to association, partnership, corporation or provisions were asked in the 2016 Bar child who is unmarried,
defraud, alters, forges, makes or any other institution, its managing head, not gainfully employed,
counterfeits any stamp, coupon, ticket, directors or partners shall be liable for the e. Nature of fund and has not reached
book or other device prescribed by the penalties Provided in this Act for the twenty-one (21) years of
Commission for the collection or payment offense. (look at the jurisprudence age, or if over twenty-
of any contribution required herein, or below) one (21) years of age,
uses, sells, lends, or has in his possession he is congenitally or
"(g) Any employee of the SSS f. Failure to remit while still a minor has
any such altered, forged or counterfeited who receives or keeps funds or property
materials, or makes, uses, sells or has in been permanently
belonging, payable or deliverable to the (see the provisions in letter incapacitated and
his possession any such altered, forged, SSS and who shall appropriate the same,
material in imitation of the material used in “d”) incapable of self-
or shall take or misappropriate, or shall support, physically or
the manufacture of such stamp, coupon, consent, or through abandonment or
ticket, book or other device, shall be fined SSS vs. Azote, G.R. No. 209741, April mentally; and
negligence, shall permit any other person 15, 2015, Mendoza, J. (3) The parent who is
not less than Five thousand pesos to take such property or funds, wholly or
(P5,000.00) non more than Twenty receiving regular
partially, or shall otherwise be guilty of Doctrine. The law in force at the support from the
thousand pesos (P20,000.00) or misappropriation of such funds or property,
imprisoned for not less than six years (6) time of Edgardo’s death was Republic Act member.
shall suffer the penalties Provided in (R.A.) No. 8282, the amendatory law of xxxx
and one (1) day nor more than twelve (12) Article Two hundred seventeen of the
years, or both, at the discretion of the R.A. No. 1161 or the "Social Security Law." (k) Beneficiaries - The dependent
Revised Penal Code. It is a tax-exempt social security service spouse until he or she remarries,
court.
designed to promote social justice and the dependent legitimate,
"(h) Any employer who, after provide meaningful protection to members legitimated or legally adopted,
"(e) Whoever fails or refuses to deducting the monthly contributions or and their beneficiaries against the hazards and illegitimate children, who
comply with the provisions of this Act or loan amortizations from his employee's of disability, sickness, maternity, old age, shall be the primary beneficiaries
with the rules and regulations promulgated compensation, fails to remit the said death, and other contingencies resulting in of the member: Provided, That
by the Commission, shall be punished by deduction to the SSS within thirty (30) loss of income or financial burden. As a the dependent illegitimate
a fine of not less than Five thousand days from the date they became due, shall social security program of the government, children shall be entitled to fifty
pesos (P5,000.00) nor more than Twenty be presumed to have misappropriated Section 8 (e) and (k) of the said law percent (50%) of the share of the
thousand pesos (P20,000.00), or such contributions or loan amortizations expressly provides who would be entitled legitimate, legitimated or legally
imprisonment for not less than six (6) and shall suffer the penalties Provided in to receive benefits from its deceased- adopted children: Provided,
years and one (1) day nor more than Article Three hundred fifteen of the member, to wit: further, That in the absence of the
twelve (12) years, or both, at the discretion Revised Penal Code. dependent legitimate, legitimated
of the court: Provided, That where the SEC. 8. Terms Defined. - For children of the member, his/her
violation consists in failure or refusal to purposes of this Act, the following terms dependent illegitimate children
register employees or himself, in case of "(i) Criminal action arising from a
violation of the provisions of this Act may shall, unless the context indicates shall be entitled to one hundred
the covered self-employed or to deduct otherwise, have the following meanings: percent (100%) of the benefits. In
contributions from the employees' be commenced by the SSS or the
employee concerned either under this Act xxxx their absence, the dependent
compensation and remit the same to the (e) Dependents - The dependents parents who shall be the
SSS, the penalty shall be a fine of not less or in appropriate cases under the Revised
Penal Code: Provided, That such criminal shall be the following: secondary beneficiaries of the
Five thousand pesos (P5,000.00) nor member. In the absence of all the
 foregoing, any other person was no impediment or that the impediment analyses of statistical and economic data on their database as expressly permitted
designated by the member as was already removed at the time of the and to make an investigation as may be by Section 4(b) (7) of R.A. No. 8282.
his/her secondary beneficiary. celebration of her marriage to Edgardo. needed for its proper administration and
Settled is the rule that "whoever claims development. Precisely, the investigations It is of no moment that the first
Applying Section 8(e) and (k) of entitlement to the benefits provided by law conducted by SSS are appropriate in order wife, Rosemarie, did not participate or
R.A. No. 8282, it is clear that only the legal should establish his or her right thereto by to ensure that the benefits provided under oppose Edna's claim. Rosemarie's non-
spouse of the deceased-member is substantial evidence." Edna could not the SS Law are received by the rightful participation or her subsequent death on
qualified to be the beneficiary of the adduce evidence to prove that the earlier beneficiaries. It is not hard to see that November 11, 2004 did not cure or
latter’s SS benefits. In this case, there is a marriage of Edgardo was either annulled such measure is necessary for the legitimize the status of Edna.
concrete proof that Edgardo contracted an or dissolved or whether there was a system’s proper administration, otherwise,
earlier marriage with another individual as declaration of Rosemarie’s presumptive it will be swamped with bogus claims that Dy Caico vs. SSS, G.R. No. 161357,
evidenced by their marriage contract. death before her marriage to Edgardo. will pointlessly deplete its funds. Such November 30, 2009, Callejo, Sr., J.
Edgardo even acknowledged his married What is apparent is that Edna was the scenario will certainly frustrate the purpose
status when he filled out the 1982 Form E- second wife of Edgardo. Considering that of the law which is to provide covered Doctrine. The Court holds that
4 designating Rosemarie as his spouse. Edna was not able to show that she was employees and their families protection the proviso "as of the date of his
the legal spouse of a deceased-member, against the hazards of disability, sickness, retirement" in Section 12-B(d) of Rep. Act
It is undisputed that the second she would not qualify under the law to be old age and death, with a view to No. 8282, which qualifies the term
marriage of Edgardo with Edna was the beneficiary of the death benefits of promoting their well-being in the spirit of "primary beneficiaries," is unconstitutional
celebrated at the time when the Family Edgardo. social justice. Moreover and as correctly for it violates the due process and equal
Code was already in force. Article 41 of pointed out by SSC, such investigations protection clauses of the Constitution.
the Family Code expressly states, “A The Court does not subscribe to are likewise necessary to carry out the
marriage contracted by any person during the disquisition of the CA that the updated mandate of Section 15 of the SS Law In an analogous
subsistence of a previous marriage shall Form E-4 of Edgardo was determinative of which provides in part, viz: case, Government Service Insurance
be null and void, unless before the Edna’s status and eligibility to claim the System v. Montesclaros, the Court
celebration of the subsequent marriage, death benefits of deceased-member. Sec. 15. Non-transferability of invalidated the proviso in Presidential
the prior spouse had been absent for four Although an SSS member is free to Benefits. - The SSS shall pay the benefits Decree (P.D.) No. 1146 which stated that
consecutive years and the spouse present designate a beneficiary, the designation provided for in this Act to such [x x xj "the dependent spouse shall not be
has a well-founded belief that the absent must always conform to the statute. To persons as may be entitled thereto in entitled to said pension if his marriage with
spouse was already dead. In case of blindly rely on the form submitted by the accordance with the provisions of this Act the pensioner is contracted within three
disappearance where there is danger deceased-member would subject the x x x. years before the pensioner qualified for
under the circumstances set forth in the entire social security system to the whims the pension." In the said case, the Court
provisions of Article 391 of the Civil Code, and caprices of its members and would The existence of two Form E-4s characterized retirement benefits as
an absence of only two years shall be render the SS Law inutile. designating, on two different dates, two property interest of the pensioner as well
sufficient. different women as his spouse is already as his or her surviving spouse. The
Although the SSC is not an indication that only one of them can be proviso, which denied a dependent
For the purpose of contracting a intrinsically empowered to determine the the legal spouse. As can be gleaned from spouse’s claim for survivorship pension if
subsequent marriage under the preceding validity of marriages, it is required by the certification issued by the NSO, there the dependent spouse contracted
paragraph, the spouse present must Section 4(b) (7) of R.A. No. 8282 to is no doubt that Edgardo married marriage to the pensioner within the three-
institute a summary proceeding as examine available statistical and economic Rosemarie in 1982. Edna cannot be year prohibited period, was declared
provided in this Code for the declaration of data to ensure that the benefits fall into the considered as the legal spouse of Edgardo offensive to the due process clause. There
presumptive death of the absentee, rightful beneficiaries. As held in Social as their marriage took place during the was outright confiscation of benefits due
without prejudice to the effect of Security Commission vs. Favila, SSS, as existence of a previously contracted the surviving spouse without giving him or
reappearance of the absent spouse.” the primary institution in charge of marriage. For said reason, the denial of her an opportunity to be heard. The
extending social security protection to Edna's claim by the SSC was correct. It proviso was also held to infringe the equal
Using the parameters outlined in workers and their beneficiaries is should be emphasized that the SSC protection clause as it discriminated
Article 41 of the Family Code, Edna, mandated by Section 4(b)(7) of RA 8282 determined Edna's eligibility on the basis against dependent spouses who
without doubt, failed to establish that there to require reports, compilations and of available statistical data and documents contracted their respective marriages to
pensioners within three years before they offsprings of a retired SSS member to be As earlier stated, the petitioner benefits. In particular, the proviso was
qualified for their pension. considered as his primary beneficiaries belongs to the second group of dependent apparently intended to prevent sham
under Section 12-B(d) of Rep. Act No. spouses, i.e., her marriage to Bonifacio marriages or those contracted by persons
For reasons which shall be 8282 is not substantially affected by the was contracted after his retirement. She solely to enable one spouse to claim
discussed shortly, the proviso "as of the proviso "as of the date of his retirement." A and those similarly situated are benefits upon the anticipated death of the
date of his retirement" in Section 12-B(d) biological child, whether legitimate, undoubtedly discriminated against as the other spouse.
of Rep. Act No. 8282 similarly violates the legitimated or illegitimate, is entitled to proviso "as of the date of his retirement"
due process and equal protection clauses survivor’s pension upon the death of a disqualifies them from being considered This concern is concededly valid.
of the Constitution. retired SSS member so long as the said "primary beneficiaries" for the purpose of However, classifying dependent spouses
child is unmarried, not gainfully employed entitlement to survivor’s pension. and determining their entitlement to
The proviso infringes the equal and has not reached twenty-one (21) survivor’s pension based on whether the
protection clause. As illustrated by the years of age, or if over twenty-one (21) Generally, a statute based on marriage was contracted before or after
petitioner’s case, the proviso "as of the years of age, he or she is congenitally or reasonable classification does not violate the retirement of the other spouse,
date of his retirement" in Section 12-B(d) while still a minor has been permanently the constitutional guaranty of the equal regardless of the duration of the said
of Rep. Act No. 8282 which qualifies the incapacitated and incapable of self- protection clause of the law. With respect marriage, bears no relation to the
term "primary beneficiaries" results in the support, physically or mentally. to Rep. Act No. 8282, in particular, as a achievement of the policy objective of the
classification of dependent spouses as social security law, it is recognized that it law, i.e., "provide meaningful protection to
primary beneficiaries into two groups: On the other hand, the eligibility "is permeated with provisions that draw members and their beneficiaries against
of legally adopted children to be lines in classifying those who are to the hazard of disability, sickness,
(1) Those dependent spouses considered "primary beneficiaries" under receive benefits. Congressional decisions maternity, old age, death and other
whose respective marriages to SSS Section 12-B(d) of Rep. Act No. 8282 is in this regard are entitled to deference as contingencies resulting in loss of income
members were contracted prior to the affected by the proviso "as of the date of those of the institution charged under our or financial burden." The nexus of the
latter’s retirement; and his retirement" in the same manner as the scheme of government with the primary classification to the policy objective is
(2) Those dependent spouses dependent spouses. A legally adopted responsibility for making such judgments vague and flimsy. Put differently, such
whose respective marriages to SSS child who satisfies the requirements in in light of competing policies and classification of dependent spouses is not
members were contracted after the latter’s Section 8(e)(2) thereof is considered a interests." germane to the aforesaid policy objective.
retirement. primary beneficiary of a retired SSS
member upon the latter’s death only if the However, as in other statutes, the For if it were the intention of
Underlying these two said child had been legally adopted prior classification in Rep. Act No. 8282 with Congress to prevent sham marriages or
classifications of dependent spouses is to the member’s retirement. One who was respect to entitlement to benefits, to be those entered in contemplation of
that their respective marriages are valid. In legally adopted by the SSS member after valid and reasonable, must satisfy the imminent death, then it should have
other words, both groups are legitimate or his or her retirement does not qualify as a following requirements: (1) it must rest on prescribed a definite "duration-of-
legal spouses. The distinction between primary beneficiary for the purpose of substantial distinctions; (2) it must be relationship" or durational period of
them lies solely on the date the marriage entitlement to survivor’s pension under germane to the purpose of the law; (3) it relationship as one of the requirements for
was contracted. The petitioner belongs to Section 12-B(d) of Rep. Act No. 8282. must not be limited to existing conditions entitlement to survivor’s pension. For
the second group of dependent only; and (4) it must apply equally to all example, in the United States, a provision
spouses, i.e., her marriage to Bonifacio In any case, the issue that now members of the same class. in their social security law which excludes
was contracted after his retirement. As confronts the Court involves a dependent from social security benefits the surviving
such, she and those similarly situated do spouse who claims to have been unjustly The legislative history of Rep. Act wife and stepchild of a deceased wage
not qualify as "primary beneficiaries" under deprived of her survivor’s pension under No. 8282 does not bear out the purpose of earner who had their respective
Section 12-B(d) of Rep. Act No. 8282 and, Section 12-B(d) of Rep. Act No. 8282. Congress in inserting the proviso "as of relationships to the wage earner for less
therefore, are not entitled to survivor’s Hence, the subsequent discussion will the date of his retirement" to qualify the than nine months prior to his death, was
pension under the same provision by focus on the resultant classification of the term "primary beneficiaries" in Section 12- declared valid. Thus, nine months is
reason of the subject proviso. dependent spouses as primary B(d) thereof. To the Court’s mind, however, recognized in the United States as the
beneficiaries under the said provision. it reflects congressional concern with the minimum duration of a marriage to
It is noted that the eligibility of possibility of relationships entered after consider it as having been contracted in
"dependent children" who are biological retirement for the purpose of obtaining
good faith for the purpose of entitlement to the purpose of acquiring benefits accruing under Rep. Act No. 8282. This is so not afforded any opportunity to disprove
survivorship pension. upon the death of the other spouse. The because the mandatory contributions of the presence of the illicit purpose. The
proviso thus unduly prejudices the rights of both the employers and the employees to proviso, as it creates this conclusive
In contrast, the proviso "as of the the legal surviving spouse, like the the SSS do not, likewise, make the presumption, is unconstitutional because it
date of his retirement" in Section 12-B(d) petitioner, and defeats the avowed policy retirement benefits under Rep. Act No. presumes a fact which is not necessarily
in Rep. Act No. 8282 effectively of the law "to provide meaningful 8282 mere gratuity but form part of the or universally true. In the United States,
disqualifies from entitlement to survivor’s protection to members and their latter’s compensation. Even the retirement this kind of presumption is characterized
pension all those dependent spouses beneficiaries against the hazards of benefits of self-employed individuals, like as an "irrebuttable presumption" and
whose respective marriages to retired SSS disability, sickness, maternity, old age, Bonifacio, who have been included in the statutes creating permanent and
members were contracted after the latter’s death, and other contingencies resulting in compulsory coverage of Rep. Act No. irrebutable presumptions have long been
retirement. The duration of the marriage is loss of income or financial burden." 8282 are not mere gratuity because they disfavored under the due process clause.
not even considered. It is observed that, in are required to pay both the employer and
certain instances, the retirement age The proviso infringes the due employee contributions. Further, under In the petitioner’s case, for
under Rep. Act No. 8282 is sixty (60) process clause. As earlier opined, Rep. Act No. 8282, the surviving spouse is example, she asserted that when she and
years old. A marriage contracted by a in Government Service Insurance System entitled to survivor’s pension accruing on Bonifacio got married in 1997, it was
retired SSS member after the said age v. Montesclaros, the Court characterized the death of the member; hence, the merely to legalize their relationship and
may still last for more than ten years, retirement benefits as a property interest surviving spouse’s right to receive such not to commit fraud. This claim is quite
assuming the member lives up to over of a retiree. We held therein that "[i]n a benefit following the demise of the wife or believable. After all, they had been living
seventy (70) years old. In such a case, it pension plan where employee participation husband, as the case may be, is also part together since 1980 and, in fact, during
cannot be said that the marriage was a is mandatory, the prevailing view is that of the latter’s contractual compensation. that time their eldest child was already
sham or was entered into solely for the employees have contractual or vested twenty-four (24) years old. However, the
purpose of enabling one spouse to obtain rights in the pension where the pension is The proviso "as of the date of his petitioner was not given any opportunity to
the financial benefits due upon the death part of the terms of employment." Thus, it retirement" in Section 12-B(d) of Rep. Act prove her claim that she was
of the other spouse. Nonetheless, the said was ruled that, "where the employee No. 8282 runs afoul of the due process Bonifacio’s bona fide legal spouse as she
surviving spouse is not entitled to retires and meets the eligibility clause as it outrightly deprives the was automatically disqualified from being
survivor’s pension because he or she is requirements, he acquires a vested right to surviving spouses whose respective considered as his primary beneficiary. In
not a primary beneficiary as of the date of benefits that is protected by the due marriages to the retired SSS members effect, the petitioner was deprived of the
retirement of the SSS member following process clause" and "[r]etirees enjoy a were contracted after the latter’s survivor’s benefits, a property interest,
Section 12-B(d) of Rep. Act No. 8282. protected property interest whenever they retirement of their survivor’s benefits. accruing from the death of Bonifacio
acquire a right to immediate payment There is outright confiscation of benefits without any opportunity to be heard.
Further, the classification of under pre-existing law." Further, since due such surviving spouses without giving Standards of due process require that the
dependent spouses on the basis of pursuant to the pertinent law therein, the them an opportunity to be heard. petitioner be allowed to present evidence
whether their respective marriages to the dependent spouse is entitled to to prove that her marriage to Bonifacio
SSS member were contracted prior to or survivorship pension, "a widow’s right to By this outright disqualification of was contracted in good faith and as
after the latter’s retirement for the purpose receive pension following the demise of the surviving spouses whose respective his bona fide spouse she is entitled to the
of entitlement to survivor’s pension does her husband is also part of the husband’s marriages to SSS members were survivor’s pension accruing upon his
not rest on real and substantial contractual compensation." contracted after the latter’s retirement, the death. Hence, the proviso "as of the date
distinctions. It is arbitrary and proviso "as of the date of his retirement" of his retirement" in Section 12-B(d) which
discriminatory. It is too sweeping because Although the subject matter in the qualifying the term "primary beneficiaries" deprives the petitioner and those similarly
the proviso "as of the date of his above-cited case involved the retirement for the purpose of entitlement to survivor’s situated dependent spouses of retired
retirement," which effectively disqualifies benefits under P.D. No. 1146 or the pension has created the presumption that SSS members this opportunity to be heard
the dependent spouses whose respective Revised Government Service Insurance marriages contracted after the retirement must be struck down.
marriages to the retired SSS member Act of 1977 covering government date of SSS members were entered into
were contracted after the latter’s employees, the pronouncement therein for the purpose of securing the benefits Social Service Commission vs. Alba,
retirement as primary beneficiaries, that retirees enjoy a protected property under Rep. Act No. 8282. This 559 SCRA 477, G.R. No. 165482, July
unfairly lumps all these marriages as sham interest in their retirement benefits applies presumption, moreover, is conclusive 23, 2008, Tinga, J.
relationships or were contracted solely for squarely to those in the private sector because the said surviving spouses are
 Doctrine. First, the Court co-worker, Rodolfo Sales. Anent the power created by law and an is employee’s right otherwise known as the Social Security
observes that Far Alba was no ordinary of control with regard to the work of the protected by law. Act of 1997, to wit:
administrator. He was no less than the son employee, the element refers merely to Having established Far Alba’s
of the hacienda’s owner and as such he the existence of the power and not the accountability to the SSS for Lamboso’s SEC. 5. Settlement of Disputes.–
was an owner-in-waiting prior to his actual exercise thereof. It is not essential unremitted contributions from 1960 to (a) Any dispute arising under this
father’s death. He was a member of the for the employer to actually supervise the 1970, a discussion on the propriety of filing Act with respect to coverage,
owner’s family assigned to actively performance of duties of the employee; it a claim of such nature against the estate benefits, contributions and
manage the operations of the hacienda. is sufficient that the former has a right to proceedings of Arturo Alba, Sr. becomes penalties thereon or any other
As he stood to benefit from wield the power. unnecessary. In any event, the Court matter related thereto, shall be
the hacienda’s successful operation, he sustains the jurisdiction of the Commission cognizable by the Commission,
ineluctably took his job and his father’s Third, not to be forgotten is the over disputes under the Social Security and any case filed with respect
wishes to heart. As emphasized by the definition of an employer under Article Act "with respect to coverage, benefits, thereto shall be heard by the
Commission his and the owner’s interests 167(f) of the Labor Code which deals with contributions and penalties thereon or any Commission, or any of its
in the business were plainly and employees’ compensation and state other matter related thereto. Moreover, the members, or by hearing officers
inextricably linked by filial bond. He more insurance fund. The said provision of the Court agrees with the Commission’s duly authorized by the
than just acted in the interests of his father law defines an employer as "any person, assertion that an action for remittance of Commission and decided within
as employer, and could himself pass off as natural or juridical, employing the services SS monthly contributions is not a type of the mandatory period of twenty
the employer, the one carrying on the of the employee." It also defines a person money claim which needs to be filed (20) days after the submission of
undertaking. as "any individual, partnership, firm, against the estate proceedings. In the the evidence. The filing,
association, trust, corporation or legal case of Vera, et al. v. Judge determination and settlement of
Second, nomenclature aside, Far representative thereof." Plainly, Far Alba, Fernandez, the Court declared that claims disputes shall be governed by the
Alba was not merely an administrator of as the hacienda administrator, acts as the by the government for unpaid taxes are rules and regulations
the hacienda. Applying the control test legal representative of the employer and is not covered by the statute of non-claims promulgated by the Commission.
which is used to determine the existence thus an employer within the meaning of as these are monetary obligations created
of employer-employee relationship for the law liable to pay the SS contributions. by law. Even after the distribution of the The law clearly vests upon the
purposes of compulsory coverage under estate, claims for taxes may be enforced Commission jurisdiction over "disputes
the SSS law, Far Alba is technically Finally, the Court believes that against the distributees in proportion to arising under this Act with respect to
Lamboso’s employer. Section 8(c) of the Social Security Act of their shares in the inheritance. Similarly, coverage, benefits, contributions and
1954 is broad enough to include those employers are required to remit the penalties thereon or any matter related
The essential elements of an persons acting directly or indirectly in the contributions to the SSS by mandate of thereto..." Dispute is defined as "a conflict
employer-employee relationship are: (a) interest of the employer. As pointed out by law. As such, actions of this type should be or controversy."
the selection and engagement of the the Court of Appeals, that the said treated in much the same way as taxes—
employee; (b) the payment of wages; (c) provision does not contain the definitive that they are not required to be filed From the allegations of
the power of dismissal; and (d) the power phrase contained in Article 212(e) of the against the estate and that they be respondents’ complaint, it readily appears
of control with regard to the means and Labor Code should not be taken to mean claimed against the heirs of the errant that there is no longer any dispute with
methods by which the work is to be that administrators such as Far Alba, decedent. respect to respondents’ accountability to
accomplished, with the power of control whose interests are closely linked with his the SSS. Respondents had, in fact,
being the most determinative factor. father-employer, do not come within the SSS vs. Atlantic Gulf and Pacific admitted their delinquency and offered to
purview of the law. If under Article 212(e), Company of Manila, 553 SCRA 677, settle them by way of dacion en
Lamboso testified that he was persons acting in the interest of the G.R. No. 175952, April 30, 2008, Tinga, pago subsequently approved by the SSS
selected and his services were engaged employer, directly or indirectly, are obliged J. in Resolution No. 270-s. 2001. SSS stated
by Far Alba himself. Corollarily, Far Alba to follow the government labor relations in said resolution that "the dacion en pago
held the prerogative of terminating policy, it could be reasonably concluded Doctrine. The pertinent proposal of AG&P Co. of Manila and
Lamboso’s employment. Lamboso also that such persons may likewise be held provision of law detailing the jurisdiction of Semirara Coals Corporation to pay their
testified in a direct manner that he had liable for the remittance of SS the Commission is Section 5(a) of R.A. liabilities in the total amount
been paid his wages by Far Alba. This contributions which is an obligation No. 1161, as amended by R.A. No. 8282, of P30,652,710.71 as of 31 March 2001
testimony was seconded by Lamboso’s by offering their 5.8 ha. property located in
San Pascual, Batangas, be, as it is coronary artery disease, ischemic heart specific official purpose. This holds greater percent (3%) per month from the date the
hereby, approved.." disease, severe hypertension and a host significance where there exist differences contribution falls due until paid. x x x.
of other serious illnesses filed with the or doubts as to the medical condition of
The controversy, instead, lies in SSS[.]" the person. The mandatory coverage under
the non-implementation of the approved the Social Security Act is premised on the
and agreed dacion en pago on the part of A perusal of the records shows In this case, the SSS medical existence of an employer-employee
the SSS. As such, respondents filed a suit that when the case was already submitted examiners are tasked by law to analyze relationship. This is evident from Section
to obtain its enforcement which is, for decision before the appellate court, the extent of personal incapacity resulting 9(a) which provides:
doubtless, a suit for specific performance petitioner manifested that he suffered a from disease or injury. Oftentimes, a
and one incapable of pecuniary estimation heart attack on February 25, 2004, for physician who is adequately versed in the SEC. 9. Coverage. - (a)
beyond the competence of the which he claimed to have undergone a knowledge of anatomy and physiology will Coverage in the SSS shall be compulsory
Commission. coronary angiogram on March 9, 2005 and find himself deficient when called upon to upon all employees not over sixty (60)
a coronary angioplasty on September 27, express an opinion on the permanent years of age and their
Ortega vs. Social Security Commission, 2005 at the Philippine Heart Center. changes resulting from a disability. Unlike employers: Provided, That in the case of
555 SCRA 353, G.R. No. 176150, June the general practitioner who merely domestic helpers, their monthly income
25, 2008, Carpio-Morales, J. Unfortunate as these events concerns himself with the examination of shall not be less than One thousand pesos
were, the appellate court correctly ruled his patient for purposes of diagnosis and (P1,000.00) a month x x x.
Doctrine. Claims under the that it could not consider such allegation of treatment, the medical examiner has to
Labor Code for compensation and under subsequent events since "a factual consider varied factors and ascertain the Section 8(d) of the same law
the Social Security Law for benefits are question may not be raised for the first claimant’s related history and subjective defines an employee as any person who
not the same as to their nature and time on appeal[,] and documents forming complaints. The members of this Court performs services for an employer in
purpose. On the one hand, the pertinent no part of the proofs before the appellate cannot strip their judicial robe and don the which either or both mental or physical
provisions of the Labor Code govern court will not be considered in disposing of physician’s gown, so to speak, in a efforts are used and who receives
compensability of work-related disabilities the issues of an action." pretense to correlate variances in medical compensation for such services, where
or when there is loss of income due to findings. there is an employer-employee
work-connected or work-aggravated injury The issues in every case are relationship. The illegal dismissal case
or illness. On the other hand, the benefits limited to those presented in the SSC vs. Rizal Poultry and Livestock before the NLRC involved an inquiry into
under the Social Security Law are pleadings. The object of the pleadings is to Corp., G.R. No. 167050, June 1, 2011, the existence or non-existence of an
intended to provide insurance or protection draw the lines of battle between the Perez, J. employer-employee relationship. The very
against the hazards or risks of disability, litigants and to indicate fairly the nature of same inquiry is needed in the SSC case.
sickness, old age or death, inter alia, the claims or defenses of both parties. A Doctrine. The remittance of SSS And there was no indication therein that
irrespective of whether they arose from or change of theory on appeal is not contributions is mandated by Section 22(a) there is an essential conceptual difference
in the course of the allowed. In this case, the matter of of the Social Security Act of 1997, viz: between the definition of "employee"
employment. And unlike under the Social petitioner’s serious heart condition was not under the Labor Code and the Social
Security Law, a disability is total and raised in his application before the SSS or SEC. 22. Remittance of Security Act.
permanent under the Labor Code if as a in his June 19, 2000 petition before the Contributions. - (a) The contributions
result of the injury or sickness the SSC. imposed in the preceding Section shall be In the instant case, therefore, res
employee is unable to perform any gainful remitted to the SSS within the first ten (10) judicata in the concept of "conclusiveness
occupation for a continuous period Fair play dictates that the SSS be days of each calendar month following the of judgment" applies. The judgment in the
exceeding 120 days regardless of whether afforded the opportunity to properly meet month for which they are applicable or NLRC case pertaining to a finding of an
he loses the use of any of his body parts. the issue with respect to the new ailments within such time as the Commission may absence of employer-employee
besetting petitioner, in line with the actual prescribe. Every employer required to relationship between Angeles and
The Court notes that the main practice that only qualified government deduct and to remit such contributions respondents is conclusive on the SSC
issue petitioner proffers is whether he is physicians, by virtue of their oath as civil shall be liable for their payment and if any case.
entitled to total permanent disability service officials, are competent to examine contribution is not paid to the SSS as
benefits from the SSS given his persons and issue medical certificates herein prescribed, he shall pay besides B. Workmen’s Compensation
"angioplasty operation of the heart, which will be used by the government for a the contribution a penalty thereon of three (P.D. No. 628, Arts. 166-208)
 Headquarters. They boarded a tricycle, Hinoguin did not effectively cease c. Act of
a. Compensable presumably a motor-driven one, Sgt. performing "official functions" because he ministration
contingencies (Art. 166) Hinoguin and Cpl. Clavo seating was granted a pass. While going to a
themselves in the tricycle cab while Dft. fellow soldier's home for a few hours for a Visayan Stevedore Transport Company
b. Definitions Alibuyog occupied the seat behind the meal and some drinks was not a vs. Workmen’s Compensation
driver. Upon reaching the poblacion of specific military duty, he was nonetheless Commission, G.R. No. L-22135,
c. Coverage Aritao, Dft. Alibuyog dismounted, walked in the course of performance of official December 27, 1963, Dizon, J.
towards and in front of the tricycle cab, functions. Indeed, it appears to us that a
d. Compensability holding his M-16 rifle in his right hand, not soldier should be presumed to be on FACTS: After having rendered the usual
(Injury) noticing that the rifle's safety lever was on official duty unless he is shown to have eight hours of work, the laborers were
semi automatic (and not on "safety"). He clearly and unequivocally put aside that given time off to take their evening meal
a. Accident, accidentally touched the trigger, firing a status or condition temporarily by, e.g., before working over time, as it was the
work-related single shot in the process and hitting Sgt. going on an approved vacation purpose of the employer to finish the
Hinoguin, then still sitting in the cab, in the leave. Even vacation leave may, it should loading of the sugar as soon as possible.
Hinoguin vs. ECC, G.R. No. 84307, April left lower abdomen. The Sergeant did not be remembered, be preterminated by After taking their meal on board the ship,
17, 1989, Feliciano, J. apparently realize immediately that he had superior orders. Gutana and some of the laborers had to
been hit; he took three (3) steps forward, answer the call of nature by the left side of
FACTS: Sgt. Hinoguin and two (2) cried that he had been hit and fell to the More generally, a soldier in the a barge tied along the right side of the
members of his Detachment, Cpl. Rogelio ground. Armed Forces must accept certain risks, Japanese ship, in view of the insufficiency
Clavo and Dft. Nicomedes Alibuyog, for instance, that he will be fired upon by of the sanitary facilities board. After
sought permission from Captain Frankie Z. ISSUE: Whether or not Hinoguin’s death forces hostile to the State or the relieving himself, and as he was standing
Besas, Commanding Officer of "A" is compensable. Government. That is not, of course, the and buttoning up his pants, the raft
Company to go on overnight pass to only ask that he is compelled to accept by "Narwhal" came along the right side of the
Aritao, Nueva Viscaya, "to settle [an] HELD: Yes. Turning to the question of the very nature of his occupation or barge and bumped it, causing it to hit the
important matter thereat." Captain Besas whether Sgt. Hinoguin was performing profession as a soldier. Most of the right side of the Japanese vessel. As a
orally granted them permission to go to official functions at the time he sustained persons around him are necessarily also result, Gutana was pinned by the end of
Aritao and to take their issued firearms the gunshot wound, it has already been members of the Armed Forces who carry the hatch cover of the barge against the
with them, considering that Aritao was pointed out above that the Line of Duty firearms, too. In other words, a soldier side of the vessel, thereby suffering
regarded as "a critical place " that is, it had Board of Officers of the 14th Infantry must also assume the risk of being physical injuries which resulted in his
peace and order problems due to the Battalion Headquarters had already accidentally fired upon by his fellow death.
presence of elements of the New People's determined that the death of Sgt. Hinoguin soldiers. This is reasonably regarded as a
Army ("NPA!') in or in the vicinity of Aritao. had occurred "in line of duty." It may be hazard or risk inherent in his employment ISSUE: Whether or not Gutana’s death is
noted in this connection that a soldier on as a soldier. compensable.
Sgt. Hinoguin, Cpl. Clavo and Dft. active duty status is really on 24 hours a
Alibuyog left Carranglan, Nueva Ecija, day official duty status and is subject to We hold, therefore, that the death HELD: Yes. Petitioner likewise contends
about noon on 1 August 1985 and arrived military discipline and military law 24 hours of Sgt. Hinoguin that resulted from his that the death of Gutana was due to his
in Aritao, Nueva Viscaya, about 1:30 a day. He is subject to call and to the being hit by an accidental discharge of the notorious negligence. On this matter, we
o'clock P.M. on the same day. They orders of his superior officers at all times, M-16 of Dft. Alibuyog, in the circumstances are of the opinion, as was the Workmen's
proceeded to the home of Dft. Alibuyog's 7 days a week, except, of course, when he of this case, arose out of and in the course Compensation Commission, that the facts
parents where they had lunch. About 4:00 is on vacation leave status (which Sgt. of his employment as a soldier on active established by the evidence do not
o'clock P.M., the three (3) soldiers with a Hinoguin was not). 'Thus, we think that the duty status in the Armed Forces of the support petitioner's contention. Due to the
fourth man, a civilian and relative of Dft. work-connected character of Sgt. Philippines and hence compensable. number of laborers engaged in the loading
Alibuyog, had some gin and beer, finishing Hinoguins injury and death was not work, the sanitary facilities on board the
a bottle of gin and two (2) large bottles of effectively precluded by the simple b. Proximate "Hiyeharu Maru" were rendered
beer. Three hours later, at about 7:00 circumstance that he was on an overnight cause inadequate, thus compelling some of the
o'clock P.M., the soldiers left the Alibuyog pass to go to the home of Dft. Alibuyog, a laborers to answer the call of nature by
home to return to their Company soldier under his own command. Sgt. going down a barge tied along the right
side of the ship. The deceased Gutana In this case, it is not disputed that evidence on record that petitioner deviated If the Vano ruling awarded
was among those who was forced, to the deceased died while going to her place from his usual, regular homeward route or compensation to an employee who was on
resort to this uncomfortable way of of work. She was at the place where, as that interruptions occurred in the journey. his way from home to his work station one
relieving himself. Moreover, in the the petitioner puts it, her job necessarily day before an official working day, there is
circumstances of this case, it is but logical required her to be if she was to reach her While the presumption of no reason to deny compensation for
to consider the barge as an extension of place of work on time. There was nothing compensability and theory of aggravation accidental injury occurring while he is on
the premises where the laborers were private or personal about the school under the Workmen's Compensation Act his way home one hour after he had left
working. As already stated, they took their principal's being at the place of the (under which the Baldebrin case was his work station.
evening meal on board the ship and were accident. She was there because her decided) may have been abandoned
supposed to resume their work (overtime employment required her to be there. under the New Labor Code, it is significant We are constrained not to
work) a reasonable time thereafter. As, that the liberality of the law in general in consider the defense of the street peril
because of this, they were not free to Lazo vs. ECC, G.R. No. 78617, June 18, favor of the workingman still subsists. As doctrine and instead interpret the law
leave the vessel, the accident must be 1990, Padilla, J. agent charged by the law to implement liberally in favor of the employee because
deemed to be one arising out of, or in the social justice guaranteed and secured by the Employees Compensation Act, like the
course of employment. FACTS: Salvador Lazo, is a security the Constitution, the Employees Workmen's Compensation Act, is basically
guard of the Central Bank of the Compensation Commission should adopt a social legislation designed to afford relief
d. Coming Philippines assigned to its main office in a liberal attitude in favor of the employee to the working men and women in our
ang Going rule Malate, Manila. His regular tour of duty is in deciding claims for compensability, society.
from 2:00 o'clock in the afternoon to 10:00 especially where there is some basis in
Alano vs. ECC, G.R. No. L-48594, March o'clock in the evening. On 18 June 1986, the facts for inferring a work connection to e. Official
16, 1988, Gutierrez, Jr., J. the petitioner rendered duty from 2:00 the accident. Functions
o'clock in the afternoon to 10:00 o'clock in
FACTS: Dedicacion de Vera worked as the evening. But, as the security guard This kind of interpretation gives f. 24-Hour
principal of Salinap Community School in who was to relieve him failed to arrive, the meaning and substance to the Duty
San Carlos City, Pangasinan. Her tour of petitioner rendered overtime duty up to compassionate spirit of the law as
duty was from 7:30 a.m. to 5:30 p.m. On 5:00 o'clock in the morning of 19 June embodied in Article 4 of the New Labor GSIS vs. Alegre, G.R. No. 128524, April
November 29, 1976, at 7:00 A.M., while 1986, when he asked permission from his Code which states that 'all doubts in the 20, 1999, Romero, J.
she was waiting for a ride at Plaza Jaycee superior to leave early in order to take implementation and interpretation of the
in San Carlos City on her way to the home to Binangonan, Rizal, his sack of provisions of the Labor Code including its FACTS: Felonila Alegre's deceased
school, she was bumped and run over by rice. implementing rules and regulations shall husband, SPO2 Florencio A.. Alegre, was
a speeding Toyota mini-bus which resulted be resolved in favor of labor. a police officer assigned to the Philippine
in her instantaneous death. She is On his way home, at about 6:00 National Police station in the town of
survived by her four sons and a daughter. o'clock in the morning of 19 June 1986, The policy then is to extend the Vigan, Ilocos Sur. On that fateful day of
the passenger jeepney the petitioner was applicability of the decree (PD 626) to as December 6, 1994, he was driving his
ISSUE: Whether or not de Vera’s death is riding on turned turtle due to slippery road. many employees who can avail of the tricycle and ferrying passengers within the
compensable. As a result, he sustained injuries. benefits thereunder. This is in consonance vicinity of Imelda Commercial Complex
with the avowed policy of the State to give when SPO4 Alejandro Tenorio, Jr.,
HELD: Yes. In Vda. de Torbela vs. ISSUE: Whether or not the injuries maximum aid and protection to labor. Team/Desk Officer of the Police
Employees' Compensation Commission, sustained by Lazon are compensable. Assistance Center located at said
the SC held that when an employee is There is no reason, in principle, complex, confronted him regarding his tour
accidentally injured at a point reasonably HELD: Yes. In the case at bar, it can be why employees should not be protected of duty. SPO2 Alegre allegedly snubbed
proximate to the place at work, while he is seen that petitioner left his station at the for a reasonable period of time prior to or SPO4 Tenorio and even directed curse
going to and from his work, such injury is Central Bank several hours after his after working hours and for a reasonable words upon the latter. A verbal tussle then
deemed to have arisen out of and in the regular time off, because the reliever did distance before reaching or after leaving ensued between the two which led to the
course of his employment. not arrive, and so petitioner was asked to the employer's premises. fatal shooting of the deceased police
go on overtime. After permission to leave officer.
was given, he went home. There is no
ISSUE: Whether or not SPO2 Alegre’s and call of public duty as peace officers arise "in the course of employment" when
death is compensable. and technically on duty round-the-clock, Valeriano vs. ECC, G.R. No. 136200, it takes place within the period of the
the same does not justify the grant of June 8, 2000, Panganiban, J. employment, at a place where the
HELD: No. Under the pertinent compensation benefits for the death of employee may reasonably . . . be, and
guidelines of the ECC on compensability, it SPO2 Alegre based on the facts disclosed FACTS: Celerino S. Valeriano was while he is fulfilling his duties or is
is provided that "for the injury and the by the records. employed as a fire truck driver assigned at engaged in doing something incidental
resulting disability or death to be the San Juan Fire Station. Sometime on thereto.
compensable, the injury must be the result Obviously, the matter SPO2 the evening of July 3, 1985, petitioner was
of an employment accident satisfying all of Alegre was attending to at the time he met standing along Santolan Road, Quezon Thus, for injury to be
the following conditions: (1) The employee his death, that of ferrying passengers for a City, when he met a friend by the name of compensable, the standard of "work
must have been injured at the place where fee, was intrinsically private and unofficial Alexander Agawin. They decided to connection" must be substantially
his work requires him to be; (2) The in nature proceeding as it did from no proceed to Bonanza Restaurant in EDSA, satisfied. The injury and the resulting
employee must have been performing his particular directive or permission of his Quezon City, for dinner. On their way disability sustained by reason of
official functions; and (3) If the injury is superior officer. In the absence of such home at around 9:30 PM, the owner-type employment are compensable regardless
sustained elsewhere, the employee must prior authority as in the cases jeepney they were riding in figured in a of the place where the injured occurred, if
have been executing an order for the of Hinoguin and Nitura, or peacekeeping head-on collision with another vehicle at it can be proven that at the time of the
employer. nature of the act attended to by the the intersection of N. Domingo and injury, the employee was acting within the
policeman at the time he died even without Broadway streets in Quezon City. Due to purview of his or her employment and
Actually, jurisprudence is rather the explicit permission or directive of a the strong impact of the collision, petitioner performing an act reasonably necessary or
scant with respect to the above rules' superior officer, as in the case of P/Sgt. was thrown out of the vehicle and was incidental thereto.
application in the case of police officers. Alvaran, there is no justification for holding severely injured.
Nevertheless, owing to the similarity of that SPO2 Alegre met the requisites set Petitioner Valeriano was not able
functions, that is, to keep peace and order, forth in the ECC guidelines. That he may ISSUE: Whether or not Valeriano’s to demonstrate solidly how his job as a
and the risks assumed, the Court has be called upon at any time to render police injuries are compensable. firetruck driver was related to the injuries
treated police officers similar to members work as he is considered to be on a round- he had suffered. That he sustained the
of the Armed Forces of the Philippines with the-clock duty and was not on an HELD: No. In one case, the SC held that injuries after pursuing a purely personal
regard to the compensability of their approved vacation leave will not change "arising out of" and "in the course of and social function — having dinner with
deaths. Thus, echoing Hinoguin v. the conclusion arrived at considering that employment" — are said to be separate some friends — is clear from the records
Employees' Compensation Commission, a he was not placed in a situation where he tests which must be independently of the case. His injuries were not acquired
case involving a soldier who was was required to exercise his authority and satisfied; however, it should not be at his work place; nor were they sustained
accidentally fired at by a fellow soldier, we duty as a policeman. In fact, he was forgotten that the basic concept of while he was performing an act within the
held in Employees' Compensation refusing to render one pointing out that he compensation coverage is unitary, not scope of his employment or in pursuit of
Commission v. Court of Appeals, that had already complied with the duty dual, and is best expressed in the word, an order of his superior. Thus, we agree
"members of the national police are by the detail. At any rate, the 24-hour duty "work-connection, because an with the conclusion reached by the
nature of their functions technically on duty doctrine, as applied to policemen and uncompromising insistence on an appellate court that his injuries and
24 hours a day" because "policemen are soldiers, serves more as an after-the-fact independent application of each of the two consequent disability were not work-
subject to call at any time and may be validation of their acts to place them within portions of the test can, in certain cases, connected and thus not compensable.
asked by their superiors or by any the scope of the guidelines rather than a exclude clearly work-connected injuries.
distressed citizen to assist in maintaining blanket license to benefit them in all The words "arising out of" refer to the We recognize the importance and
the peace and security of the community." situations that may give rise to their origin or cause of the accident, and are laud the efforts of firemen in our society.
deaths. In other words, the 24-hour duty descriptive of its character, while the Indeed, the nature of their job requires
Upon examination of the Court of doctrine should not be sweepingly applied words "in the course of" refer to the time, them to be always on alert, like soldiers
Appeals' reasoning, we believe that the to all acts and circumstances causing the place and circumstances under which the and police officers, and to respond to fire
appellate court committed reversible error death of a police officer but only to those accident takes place. alarms which may occur anytime of the
in applying the precepts enunciated in the which, although not on official line of duty, day. Be that as it may, the circumstances
cited cases. While we agree that are nonetheless basically police service in As a matter of general in the present case do not call for the
policemen, like soldiers, are at the beck character. proposition, an injury or accident is said to application of Hinoguin and Nitura.
Following the rationalization in GSIS, the ISSUE: Whether or not Elma’s death is No proof exists showing that of compensability and render the purposes
24-hour-duty doctrine cannot be applied compensable. Elma’s lung cancer was induced or ofa system like GSIS meaningless.
to petitioner's case, because he was aggravated by her working conditions. In
neither at his assigned work place nor in HELD: No. PD 626, as amended, defines contrast with the present case, Jose GSIS vs. Calumpiano, G.R. No. 196102,
pursuit of the orders of his superiors when compensable sicknessas "any illness merely alleged that throughout Elma’s 27- November 26, 2014, Del Castillo, J.
he met an accident. But the more definitely accepted as an occupational year service atthe DAR, she had a very
important justification for the Court's disease listed by the Commission, or any demanding job; that she rose from the FACTS: Aurelia Y. Calumpiano was
stance is that he was not doing an act illness caused by employment subject to ranks as a Junior Statistician, until she employed as Court Stenographer at the
within his duty and authority as a firetruck proof by the employee that the risk of reached the position of Accountant I. Jose then Court of First Instance of Samar from
driver, or any other act of such nature, at contracting the same is increased by the also explained that Elma had to examine January 5, 1972 until her retirement on
the time he sustained his injuries. We working conditions." Of particular various financial statements for accuracy; March 30, 2002. On March 7, 2002,
cannot find any reasonable connection significance in this definition is the use of perform complex accounting reports; and shortly before her retirement, she filed
between his injuries and his work as a the conjunction "or," which indicates prepare financial statements. She also had before the Supreme Court, an application
firetruck driver. alternative situations. to constantly render overtime work, even for disability retirement on account of her
during weekends, in order to study, ailment[s], Hypertensive Cardiovascular
g. Based on this definition, we ruled analyze, balance, formulate and finalize Disease [and] Acute Angle Closure
Compensability (illness) in GSIS v. Vicencio that for sickness and reports. All these involved prolonged Glaucoma. To bolster her claim,
the resulting death of an employee to be sitting, exposure to cold room temperature [respondent] submitted the medical
a. Proof compensable, the claimant must show at the office, physical effort and mental certificates issued by her attending
either: (1) that it is a result of an exertion, making her highly susceptible to physicians, Dr. Alfred I. Lim and Dr. Elmer
b. Work- occupational disease listed under Annex physical and mental fatigue, stress and Montes, both of whom are
connected illness "A" of the Amended Rules on Employees' strain. Op[h]thalmologists [at] Eastern Samar
Compensation with the conditions set Provincial Hospital. She submitted them
c. Cause therein satisfied; or (2) if not so listed, that Aside from Jose’s general together with the results of her perimetry
of illness is unknown; Increased Risk the risk of contracting the disease was allegationsproving the stressful duties of test, [a certificate of] which x x x was
Doctrine increased by the working conditions. his late wife, no reasonable proof exists to issued by Dr. Lim. On September 30,
support the claim that her respiratory 2002, the Supreme Court approved
GSIS vs. Capacite, G.R. No. 199780, While item 17, Annex "A" of the disease, which is similar to lung cancer, Calumpiano’s application for disability
September 24, 2014, Brion J. Amended Rules of Employee’s was aggravated by her working conditions. retirement, under Republic Act No. 8291.
Compensation considers lung cancer to be The records do not support the contention
FACTS: Elma Capacite (Elma) was an a compensable occupational disease, it that she had been exposed to voluminous ISSUE: Whether or not the approval of
employee in the Department of Agrarian likewise provides that the employee and dusty records, nor do they provide any Calumpiano’s disability requirement is
Reform (DAR) – Eastern Samar Provincial should be employed as a vinyl chloride definite picture of her working proper.
Office, Borongan, Eastern Samar. Due to worker or a plastic worker. In this case, environment.
persistent cough coupled with abdominal however, Elma did not work in an HELD: Yes. In the instant case, medical
pain, Elma was admitted at the Bethany environment involving the manufacture of We cannot, under this evidentiary reports and drug prescriptions of
Hospital. The pathology examination chlorine or plastic, for her lung cancer to situation, grant death compensation respondent’s attending physicians
showed thatshe was suffering from be considered an occupational benefits solely on the assumption thatshe sufficiently support her claim for disability
"Adenocarcinoma, moderately disease. There was, therefore, no basis for might have been exposed to deleterious benefits. Neither the GSIS nor the ECC
differentiated, probably cecal origin with the CA to simply categorize her illness as substances while working as bookkeeper convincingly deny their genuineness and
metastases to mesenteric lymph node and an occupational disease without first and accountant. We cannot likewise award due execution. The reports are made part
seeding of the peritoneal surface." Elma establishing the nature of Elma’s work. compensation benefits on the basis of of the record and there is no showing that
died due to "Respiratory Failure secondary Both the law and the implementing rules stress and fatigue, which are general they are false or erroneous, or resorted to
to Metastatic Cancer to the lungs; Bowel clearly state that the given alternative consequences of working in practically all [for the purpose] of deceiving the Court,
cancer with Hepatic and Intraperitoneal conditions must be satisfied for a disease kinds of human activity; otherwise, we hence, are entitled to due probative
Seeding and Ovarian cancer." to be compensable. would unreasonably open the flood gates weight. The failure of respondent to submit
to a full medical examination, as required
by the rules, to substantiate her essential order to make them available to the court glaucoma. The most recent study showed FACTS: Pedro Clemente, was for ten (10)
hypertension, is of no moment. The law is or the parties who require them; take down that patients at both extremes of the blood years a janitor in the Department of Health
that laboratory reports such as X-ray and dictations by the judge, and transcribe pressure spectrum show an increased (Dagupan City), assigned at the Ilocos
ECG are not indispensable prerequisites them; and type in final form the judge’s prevalence of glaucoma. Those with low Norte Skin Clinic, Laoag City. He was
to compensability, the reason being that decisions, which activities extend beyond blood pressure would have low OPP and hospitalized from November 3 to 14, 1976
the strict rules of evidence need not be office hours and without additional thus reduced blood flow; however, that at the Central Luzon Sanitarium, Tala
observed in claims for compensation. compensation or overtime pay – all these people with hypertension also show Sanitarium, Tala, Caloocan City, due to his
Medical findings of the attending physician contributed to the development of her increased risk is more difficult to reconcile. ailment of "nephritis," as per medical
may be received in evidence and used as hypertension – or hypertensive This finding may reflect an inherent blood certification of his attending physician, Dr.
proof[s] of the fact in dispute. The doctor’s cardiovascular disease, as petitioner flow dysregulation secondary to chronic Winifredo Samson. He was also found to
certification as to the nature of claimant’s would call it. Consequently, her age, work, hypertension that would render retinal be suffering from such ailments as portal
disability may begiven credence as he and hypertension caused the impairment blood flow less able to resist changes in cirrhosis and leprosy, otherwise known as
orshe normally would not make untruthful of vision in both eyes due to "advanced to ocular perfusion pressure. Hansen's Disease. On November 14,
certification. Indeed, no physician in his late stage glaucoma",which rendered her 1976, Pedro Clemente died of uremia due
right mind and who is aware of the "legally blind." In recent years, we’ve learned a to nephritis.
far[-]reaching and serious effect that his or lot about ocular perfusion pressure (OPP),
her statements would cause on a money Contrary to petitioner’s i.e., the pressure difference between blood ISSUE: Whether or not Clemente’s death
claim against a government agency would submissions, there appears to be a link entering the eye and IOP. It’s clear that is compensable.
vouch indiscriminately without regarding between blood pressure and the three forces — OPP, IOP and blood
his own interests and protection. development of glaucoma, which leads the pressure — are interconnected in the HELD: Yes. In one case, the SC held that
Court to conclude that respondent’s glaucoma disease process. The strict rules of evidence are not applicable
Applying Bauland De Castro to glaucoma developed as a result of her mechanics of that relationship, however, in claims for compensation. There are no
the instant case and looking at the factual hypertension. remain ambiguous. stringent criteria to follow. The degree of
milieu, the Court agrees with the CA’s proof required under P.D. 626; is merely
conclusion and so declares that Although intra ocular pressure The ties between hypertension substantial evidence, which means, "such
respondent’s illness is compensable. (IOP) remains an important risk factor for and glaucoma are less well established relevant evidence as a reasonable mind
Respondent served the government for 30 glaucoma, it is clear that other factors can but the data, in addition to my involvement might accept as adequate to support a
long years; veritably, as the ECC itself also influence disease development and in a new study (discussed below), have conclusion". The claimant must show, at
said, "[h]er duties were no doubt stressful progression. More recently, the role that convinced me they probably do exist. least, by substantial evidence that the
and the same may have caused her to blood pressure (BP) has in the genesis of Therefore, I believe potential hypertension, development of the disease is brought
develop her ailment, hypertension" – glaucoma has attracted attention, as it along with potential low blood pressure, largely by the conditions present in the
which is a listed occupational disease, represents a clinically modifiable risk should be investigated in patients whose nature of the job. What the law requires is
contrary to the CA’s pronouncement that factor and thus provides the potential for glaucoma continues to progress despite a reasonable work-connection and not a
itis not. And because it is a listed new treatment strategies beyond IOP what appears to be well controlled IOP. direct causal relation. It is enough that the
occupational disease, the "increased risk reduction. The interplay between blood hypothesis on which the workmen's claim
theory" does not apply – again, contrary pressure and IOP determines the ocular We suspect there is a close is based is probable. Medical opinion to
to the CA’s declaration; no proof of perfusion pressure (OPP), which regulates relationship among IOP, OPP, blood the contrary can be disregarded especially
causation is required. blood flow to the optic nerve. If OPP is a pressure and glaucoma, but the exact where there is some basis in the facts for
more important determinant of ganglion nature of these associations remains inferring a work-connection. Probability not
It can also be said that given cell injury than IOP, then hypotension elusive. Complicating matters is the certainty is the touchstone.
respondent’s age at the time, and taking should exacerbate the detrimental effects physiological phenomenon known as
into account the nature, working of IOP elevation, whereas hypertension autoregulation. The medical authorities support
conditions, and pressures of her work as should provide protection against IOP rather than negate the theory of
court stenographer – which requires her to elevation. Epidemiological evidence Clemente vs. GSIS, G.R. No. L-47521, increased risk. We note that the major
faithfully record each and every day provides some conflicting outcomes of the July 31, 1987, Gutierrez, J. ailments of the deceased, i.e. nephritis,
virtually all of the court’s proceedings; role of systemic hypertension in the leprosy, etc., could be traced from
transcribe these notes immediately in development and progression of bacterial and viral infections. In the case of
leprosy, it is known that the source of HELD: Yes. Under the Amended Rules C. National Health Insurance
infection is the discharge from lesions of The fallacy in this theory lies in on Employees Compensation, "(f)or the Act of 1995 (as amended by R.A. No.
persons with active cases. It is believed the failure to explain how a sick person sickness and the resulting disability to be 9241; R.A. No.
that the bacillus enters the body through was able to enter the government service compensable, the sickness must be the 10606)
the skin or through the mucous membrane more than ten years before he became too result of an occupational disease listed
of the nose and throat. ill to work and at a time when aggravation under Annex "A" of these Rules with the 1. Important
of a disease was compensable. There is conditions set therein satisfied; otherwise, Principles
Pedro Clemente worked in a skin no evidence to show that Mr. Clemente proof must be shown that the risk of
clinic. As janitor of the Ilocos Norte Skin was hired inspite of having an existing contracting the disease is increased by the a. Equity –
Clinic, Mr. Clemente was exposed to disease liable to become worse. working conditions." Concededly, "end- The
different carriers of viral and bacterial stage renal disease secondary to uric acid Program
diseases. He had to clean the clinic itself The petitioner's arguments of nephropathy" is not among the shall
where patients with different illnesses recurrence of an already cured disease or Occupational Diseases under Annex "A" of provide for
come and go. He had to put in order the the contracting of the disease due to the Amended Rules on Employees uniform
hospital equipments that had been used. increased risks become more plausible. Compensation. This, however, would not basic
He had to dispose of garbage and wastes When there are two or more possible automatically bar petitioner’s claim for as benefits.
that accumulated in the course of each explanations regarding an issue of long as he could prove that the risk of Access to
working day. He was the employee most compensability that which favors the contracting the illness was increased by care must
exposed to the dangerous concentration of claimant must be chosen. his working conditions. be a
infected materials, and not being a function of
medical practitioner, least likely to know Limbo vs. ECC, G.R. No. 146891, July Considering the workload and a person’s
how to avoid infection. It is, therefore, not 30, 2002, Kapunan, J. areas of responsibility of petitioner in this health
unreasonable to conclude that Mr. case, it is not unlikely for him to develop needs
Clemente's working conditions definitely FACTS: Ruben T. Limbo was employed at hypertension, which in turn led to uremia. rather than
increased the risk of his contracting the Nestlé Philippines, Incorporated from It should be stressed that in determining his ability
aforementioned ailments. November 25, 1966 to December 31, whether a disease is compensable, it is to pay.
1996, first, as a salesman until he was enough that there exists a reasonable (Art. 1,
This Court has held in promoted as Area Sales Supervisor in work connection. It is sufficient that the Sec. 2(c),
appropriate cases that the conservative 1977. Sometime in December 1994, hypothesis on which the workmen’s claim R.A. No.
posture of the respondents is not Limbo was confined for one week at the is based is probable since probability, not 7875)
consistent with the liberal interpretation of Philippine General Hospital (PGH) certainty, is the touchstone.
the Labor Code and the social justice because of joint pains. His work-up b.
guarantee embodied in the Constitution in revealed that he had elevated BUN, We agree with the Office of the Responsi
favor of the workers. It clashes with the creatinine and anemia. When Limbo was Solicitor General (OSG) that the findings veness –
injunction in the Labor Code (Article 4, subjected to a renal ultrasound, it was of petitioner’s attending physician The
New Labor Code) that, as a rule, doubts further discovered that he had chronic supported the claim that his disease was Program
should be resolved in favor of the renal disease and he was forthwith work-related. As correctly pointed out by shall
claimant-employee. referred to a nephrologist and was advised the OSG, a physician’s report is the best adequately
to undergo a kidney transplant. On evidence of work-connection of workmen’s meet the
The respondents admit there may January 2, 1995, Limbo underwent a renal ailments and can be the basis of an award needs for
have been aggravation of an existing transplant at the PGH and was discharged even if the physician was not presented as personal
ailment but point out that aggravating is no therefrom on January 13, 1995. a witness. We have no reason to doubt the health
longer a ground for compensation under findings of Dr. Mejia who is an expert in services at
the present law. They contend that the ISSUE: Whether or not Limbo’s illness is her field of work. Verily, petitioner was able various
compensable factor of increased risks of compensable. to show that his ailment was work-related. stages of a
contracting the disease is not present in member’s
this case. life. (Art. 1,
 Sec. 2(d), maintenan member selection
R.A. No. ce of may use and social
7875) reserves. as a guide inequity.
(Art. 1, in (Art. 1,
c. Social Sec. 2(i), selecting Sec. 2(l),
Solidarity R.A. No. the R.A. No.
– The 7875) appropriat 7875)
Program e and most
shall be e. Informed suitable g. Cost-
guided by Choice – provider, sharing –
community The shall be The
spirit. It Program given in Program
must shall clear and shall
enhance encourage simple continuous
risk- members Filipino ly evaluate
sharing to choose and in the its cost-
among from local sharing
income among language schedule
groups, accredited that is to ensure
age health care comprehe that the
groups, providers. nsible to costs
and The the borne by
persons of Corporatio members. the
differing n’s local (Art. 1, members
health offices Sec. 2(j), are fair
status, and shall R.A. No. and
residing in objectively 7875) equitable
different apprise its and that
geographic members f. the
areas. of the full Compulso charges by
(Art. 1, range of ry health care
Sec. 2(e), providers Coverage providers
R.A. No. involved in – All are
7875) the citizens of reasonable
Program the . ((Art. 1,
d. Fiduciary and of the Philippines Sec. 2(m),
Responsi services shall be R.A. No.
bility – and required to 7875)
The privileges enroll in
Program to which the 2. Definition
shall they are National
provide entitled as Health a. Benificiary
effective members. Insurance – Any
stewardshi This Program in person
p, funds explanatio order to entitled to
managem n, which avoid health care
ent, and the adverse benefits
 under this R.A. 7875 R.A. 7875 from
Act. (Sec. as as congenital
4(a), R.A. amended amended disability,
7875 as by R.A. by R.A. either
amended No. 9241) No. 9241) physical or
by R.A. mental, or
No. 9241) c. d. Dependent any
Contributi – The legal disability
b. Capitation on – The dependent acquired
– A amount s of a that
payment paid by or member renders
mechanis in behalf of are: 1) the them
m where a a member legitimate totally
fixed rate, to the spouse dependent
whether Program who is not on the
per for a member; member of
person, coverage, 2) the our
family, based on unmarried support; 4)
household salaries or and the
or group, wages in unemploye parents
is the case of d who are
negotiated formal legitimate, sixty (60)
with a sector legitimated years old
health care employees , or above
provider , and on illegitimate whose
who shall household , monthly
be earnings acknowled income is
responsibl and ged below an
e in assets, in children as amount to
delivering the case of appearing be
or self- in the birth determine
arranging employed, certificate; d by the
for the or on other legally Corporatio
delivery of criteria as adopted or n in
health may be step- accordanc
services defined by children e with the
required the below guiding
by the Corporatio twenty-one principles
covered n in (21) years set forth in
person accordanc of age; Article I of
under the e with the 3)children this Act; 5)
conditions guiding who are parents
of a health principles twenty-one with
care set forth in (21) years permanent
provider Article 1 of old and disability
contract. this Act. above but that render
(Sec. 4(c), (Sec. 4(d), suffering them
 totally obstetrical similar members
dependent or other names by for a fixed
on the medical which they prepaid
member and may be premium;
for nursing designated or (4) a
subsistenc care. It ; or (2) a community
e. (Sec. shall also health care -based
4(f), R.A. be profession health
No. 7875 construed al, who is organizatio
as as any any doctor n, which is
amended institution, of an
by R.A. building, or medicine, associatio
No. 9241 place nurse, n of
and R.A. where midwife, indigenous
No. there are dentist, or members
10606) installed other of the
beds, health care community
e. Health Care cribs, or profession organized
Provider – bassinets al or for the
refers to: for twenty- practitioner purpose of
(1) a four hour duly improving
health care use or licensed to the health
institution , longer by practice in status of
which is patients in the that
duly the Philippines community
licensed treatment and through
and of accredited preventive,
accredited diseases, by the promotive
devoted injuries, Corporatio and
primarily to deformities n; or (3) a curative
the , or health health
maintenan abnormal maintenan services.
ce and physical ce (Sec. 4(o),
operation and mental organizatio R.A. No.
of facilities states, n, which is 7875 as
for health maternity entity that amended
promotion, cases or provides, by R.A.
prevention, sanitarial offers, or No. 9241)
diagnosis, care; or arranges
injury, infirmaries, for f. Portability –
disability, nurseries, coverage The
or dispensari of enablement
deformity, es, designated of a
drug rehabilitati health member to
addiction on centers services avail of
or in need and such needed by Program
of other plan benefits in
 an area (DOH), local cover expenses for The following
outside the government units health services which need not pay the
jurisdiction (LGUs), and other the Corporation and the monthly contributions to
of his Local agencies including DOH consider cost- be entitled to the
Health nongovernmental ineffective through Program’s benefits:
Insurance organizations (NGOs) health technology
Office. and other national assessment. (a) Retirees
(Sec. 4(aa), government agencies and pensioners of the
R.A. No. (NGAs) shall ensure that The SSS and GSIS prior to
7875 as members in such Corporation may the effectivity of this Act;
amended localities shall have institute additional and
by R.A. No. access to quality and exclusions and
9241) cost-effective health limitations as it may (b) Lifetime
care services. (Sec. 6, deem reasonable in members. (Sec. 12,
3. Coverage R.A. No. 7875 as keeping with its R.A. No. 7875 as
amended by R.A. No. protection objectives amended by R.A. No.
Mandatory 9241) and financial 10606)
Coverage. – All citizens sustainability. (Sec. 11,
of the Philippines shall 4. Change of R.A. No. 7875 as 6. Quasi-judicial
be covered by the residence amended by R.A. No. powers
National Health 10606)
Insurance Program. In A citizen can The
accordance with the be under only one Local Entitlement to Corporation, to carry out
principles of universality Health Insurance Office Benefits. – A member its tasks more
and compulsory which shall be located in whose premium effectively, shall be
coverage enunciated in the province or city of contributions for at least vested with the following
Section 2(b) and 2(l) his place of residence. A three (3) months have powers:
hereof, implementation person who changes been paid within six (6)
of the Program shall residence, becomes months prior to the first (a) Subject to
ensure sustainability of temporarily employed, day of availment, the respondent’s right to
coverage and or for other justifiable including those of the due process, to conduct
continuous reasons, is transferred dependents, shall be investigations for the
enhancement of the to another locality, entitled to the benefits of determination of a
quality of should inform said Office the question, controversy,
service: Provided, That of such transfer and Program: Provided, That complaint, or unresolved
the Program shall be subsequently transfer such member can show grievance brought to its
compulsory in all his Program that contributions have attention, and render
provinces, cities and membership. (Sec. 9, been made with decisions, orders, or
municipalities R.A. No. 7875) sufficient resolutions thereon. It
nationwide, regularity: Provided, shall proceed to hear
notwithstanding the 5. Exclusion and further, That the and determine the case
existence of LGU-based Benefits member is not currently even in the absence of
health insurance subject to legal penalties any party who has been
programs: Provided, Excluded as provided for in properly served with
further, That the Personal Health Section 44 of this Act. notice to appear. It shall
Corporation, Services. – The conduct its proceedings
Department of Health Corporation shall not or any part thereof in
public or in executive Suspension of Grievance and
session; adjourn its accreditation shall not Appeal Review (d) Employee or Member- Any
hearings to any time and exceed six (6) months. Committee. The Board person receiving compensation while in
place; refer technical Suspension of the rights shall create a Grievance the service of an employer as defined
matters or accounts to of members shall not Appeal Review herein, whether by election or
an expert and to accept exceed six (6) months. Committee, composed appointment, irrespective of status of
his reports as evidence; of three (3) to five (5) appointment, including barangay and
direct parties to be The revocation members, hereinafter Sanggunian officials.
joined in or excluded of a health care referred to as the
from the proceedings; provider’s accreditation Committee, which, (e) Active Member- A member
and give all such shall operate to subject to the who is not separated from the service.
directions as it may disqualify him from procedures enumerated
deem necessary or obtaining another above, shall receive and (f) Dependents- Dependents shall
expedient in the accreditation in his own recommend appropriate be the following: (a) the legitimate spouse
determination of the name, under a different action on complaints dependent for support upon the member
dispute before it; name, or through from members and or pensioner; (b) the legitimate,
another person, whether health care providers legitimated, legally adopted child, including
(b) to summon natural or juridical. relative to this Act and the illegitimate child, who is unmarried, not
the parties to a its implementing rules gainfully employed, not over the age of
controversy, issue The and regulations. (Sec. majority, or is over the age of majority but
subpoenas requiring the Corporation shall not be 43, R.A. No. 7875) incapacitated and incapable of self-
attendance and bound by the technical support due to a mental or physical defect
testimony of witnesses rules of evidence. (Sec. *Read IRR of R.A. No. acquired prior to age of majority; and (c)
or the production of 17, R.A. No. 7875 as 7875 the parents dependent upon the member
documents and other amended by R.A. No. for support.
materials necessary to a 10606) D. Government Service
just determination of the Insurance System Act (R.A. No. 8291) (g) Primary beneficiaries- The
case under 7. Grievance and legal dependent spouse until he/she
investigation. Appeal a. Definitions (Sec. 2, remarries and the dependent children.
P.D. No. 1146 as amended by R.A. No.
(c) Subject to Grievance 8291) (h) Secondary beneficiaries- The
the respondent’s right to System. A system of dependent parents and, subject to the
due process, to suspend grievance is hereby (a) GSIS- The Government restrictions on dependent children, the
temporarily, revoke established, wherein Service Insurance System created by legitimate descendants.
permanently, or restore members, dependents, Commonwealth Act No. 186.
the accreditation of a or health care providers (i) Compensation- The basic pay
health care provider or of the Program who (b) Board- The Board of Trustees or salary received by an employee,
the right to benefits of a believe they have been of the Government Service Insurance pursuant to his election/appointment,
member and/or impose aggrieved by any System. excluding per diems, bonuses, overtime
fines. The decision shall decision of the pay, honoraria, allowances and any other
immediately be implementors of the (c) Employer- The national emoluments received in addition to the
executory, even pending Program, may seek government, its political subdivisions, basic pay which are not integrated into the
appeal, when the public redress of the grievance branches, agencies or instrumentalities, basic pay under existing laws.
interest so requires and in accordance with the including government-owned or controlled
as may be provided for provisions of this Article. corporations, and financial institutions with (j) Contribution- The amount
in the implementing (Sec. 39, R.A. No. 7875) original charters, the constitutional payable to the GSIS by the member and
rules and regulations. commissions and the judiciary.
the employer in accordance with Section 5 (n) Lump sum- The basic monthly member is able to pursue a gainful 1) thirty-seven and one-half
of this Act. pension multiplied by sixty (60). occupation. percent (37.5%) of the revalued average
monthly compensation; plus
(k) Current Daily Compensation- (o) Pensioner- Any person b. Membership
The actual daily compensation or the receiving old-age permanent total disability 2) two and one-half percent
actual monthly compensation divided by pension or any person who has received Compulsory Membership. (2.5%) of said revalued average monthly
the number of working days in the month the lump sum excluding one receiving - Membership in the GSIS shall be compensation for each year of service in
of contingency but not to exceed twenty- survivorship pension benefits as defined in compulsory for all employees receiving excess of (15) years: Provided, That the
two (22) days. Section 20 of this Act. compensation who have not reached the basic monthly pension shall not exceed
compulsory retirement age, irrespective of ninety percent (90%) of the average
(l) Average Monthly (p) Gainful Occupation- Any employment status, except members of monthly compensation.
Compensation (AMC)- The quotient productive activity that provided the the Armed Forces of the Philippines and
arrived at after dividing the aggregate member with income at least equal to the the Philippine National Police, subject to (b) The basic monthly pension
compensation received by the member minimum compensation of government the condition that they must settle first may be adjusted upon the
during his last thirty-six (36) months of employees. their financial obligation with the GSIS, recommendation of the President and
service preceding his and contractuals who have no employer General Manager of the GSIS and
separation/retirement/ disability/death by (q) Disability- Any loss or and employee relationship with the approved by the President of the
thirty-six (36), or by the number of months impairment of the normal functions of the agencies they serve. Philippines in accordance with the rules
he received such compensation if he has physical and/or mental faculty of a and regulations prescribed by the
less than thirty-six (36) months of member which reduces or eliminates Except for the members of the GSIS: Provided, however, that the basic
service: Provided, That the average his/her capacity to continue with his/her judiciary and constitutional commissions monthly pension shall not be less than
monthly compensation shall in no case current gainful occupation or engage in who shall have life insurance only, all One thousand and three hundred pesos
exceed the amount and rate as may be any other gainful occupation. members of the GSIS shall have life (P1,300.00): Provided, further, that the
respectively set by the Board under the insurance, retirement, and all other social basic monthly pension for those who have
rules and regulations implementing this (r) Total Disability- Complete security protections such as disability, rendered at least twenty (20) years of
Act as determined by the actuary of the incapacity to continue with his present survivorship, separation, and service after the effectivity of this Act shall
GSIS: Provided, further, That initially the employment or engage in any gainful unemployment benefits. (Sec. 3, P.D. No. not be less than Two thousand four
average monthly compensation shall not occupation due to the loss or impairment 1146 as amended by R.A. No. 8291) hundred pesos (P2,400.00) a month.
exceed Ten thousand pesos (P10,000.00), of the normal functions of the physical
and premium shall be nine percent (9%) and/or mental faculties of the member. Effect of Separation from the Section 10. Computation of
and twelve percent (12%) for employee Service. - A member separated from the Service. - (a) The computation of service
and employer covering the AMC limit and (s) Permanent Total Disability- service shall continue to be a member, for the purpose of determining the amount
below and two percent (2%) and twelve Accrues or arises when recovery from the and shall be entitled to whatever benefits of benefits payable under this Act shall be
percent (12%) for employee and employer impairment mentioned in Section 2 (Q) is he has qualified to in the event of any from the date of original
covering the compensation above the medically remote. contingency compensable under this Act. appointment/election, including periods of
AMC limit. (Sec. 4, P.D. No. 1146 as amended by service at different times under one or
(t) Temporary Total Disability- R.A. No. 8291) more employers, those performed
(m) Revalued average monthly Accrues or arises when the impaired overseas under the authority of the
compensation- An amount equal to one physical and/or mental faculties can be c. Benefits (P.D. No. Republic of the Philippines, and those that
hundred seventy percent (170%) of the rehabilitated and/or restored to their 1146 as amended by R.A. No. 8291) may be prescribed by the GSIS in
first One thousand pesos (P1,000.00) of normal functions. coordination with the Civil Service
the average monthly compensation plus Section 9. Computation of the Commission.
one hundred percent (100%) of the (u) Permanent Partial Disability- Basic Monthly Pension. - (a) The basic
average monthly compensation in excess Accrues or arises upon the irrevocable monthly pension is equal to: (b) All service credited for
of One thousand pesos (P1,000.00). loss or impairment of certain portion/s of retirement, resignation or separation for
the physical faculties, despite which the which corresponding benefits have been
awarded under this Act or other laws shall
be excluded in the computation of service compensation shall be paid to a this Act payable at the time of retirement the rules and regulations prescribed by the
in case of reinstatement in the service of permanent employee who is involuntarily plus an old-age pension benefit equal to GSIS.
an employer and subsequent retirement or separated from the service due to the the basic monthly pension payable
separation which is compensable under abolition of his office or position usually monthly for life, starting upon expiration of PERMANENT DISABILITY
this Act. resulting from the five-year (5) guaranteed period BENEFITS
reorganization: Provided, That he has covered by the lump sum; or (2) cash Section 15. General Conditions
For the purpose of this section, been paying integrated contributions for at payment equivalent to eighteen (18) for Entitlement. - A member who suffers
the term service shall include full-time least one (1) year prior to separation. months of his basic monthly pension plus permanent disability for reasons not due to
service with compensation: Provided, that Unemployment benefits shall be paid in monthly pension for life payable his grave misconduct, notorious
part-time and other services with accordance with the following schedules: immediately with no five-year (5) negligence, habitual intoxication, or willful
compensation may be included under guarantee. intention to kill himself or another, shall be
such rules and regulations as may be Contributions Made Benefit entitled to the benefits provided for under
prescribed by the GSIS. Duration (b) Unless the service is Sections 16 and 17 immediately following,
1 year but less than 3 years 2 extended by appropriate authorities, subject to the corresponding conditions
SEPARATION BENEFITS months retirement shall be compulsory for an thereof.
3 or more years but less than 6 employee of sixty-five (65) years of age
Section 11. Separation years 3 months with at least fifteen (15) years of Section 16. Permanent Total
Benefits. - The separation benefits shall 6 or more years but less than 9 service: Provided, That if he has less than Disability Benefits. - (a) If the permanent
consist of: (a) a cash payment equivalent years 4 months fifteen (15) years of service, he may be disability is total, he shall receive a
to one hundred percent (100%) of his 9 or more years but less than 11 allowed to continue in the service in monthly income benefit for life equal to the
average monthly compensation for each years 5 months accordance with existing civil service rules basic monthly pension effective from the
year of service he paid contributions, but 11 or more years but less than 15 and regulations. date of disability: Provided, That: (1) he is
not less than Twelve thousand pesos years 6 months in the service at the time of disability; or
(P12,000) payable upon reaching sixty Section 13-A. Conditions for (2) if separated from the service, he has
(60) years of age upon separation, The first payment shall be Entitlement. - A member who retires from paid at least thirty-six (36) monthly
whichever comes later: Provided, that the equivalent to two (2) monthly benefits. A the service shall be entitled to the contributions within the five (5) year period
member resigns or separates from the seven-day (7) waiting period shall be retirement benefits enumerated in immediately preceding disability, or has
service after he has rendered at least imposed on succeeding monthly paragraph (a) of Section 13 paid a total of at least one hundred eighty
three (3) years of service but less than payments. hereof: Provided, That: (180) monthly contributions, prior to his
fifteen (15) years; or (b) a cash payment disability: Provided, further, That if at the
equivalent to eighteen (18) times his basic All accumulated unemployment (1) he has rendered at least time of disability, he was in the service and
monthly pension at the time of resignation benefits paid to the employee during his fifteen years of service; has paid a total of at least one hundred
or separation, plus an old-age pension entire membership with the GSIS shall be (2) he is at least sixty (60) years eighty (180) monthly contributions, in
benefit equal to the basic monthly pension deducted from voluntary separation of age at the time of retirement; addition to the monthly income benefit, he
payable monthly for life upon reaching the benefits. and shall receive a cash payment equivalent to
age of sixty (60): Provided, that the (3) he is not receiving a monthly eighteen (18) times his basic monthly
member resigns or separates from the The GSIS shall prescribe the pension benefit from permanent pension: Provided, finally, That a member
service after he has rendered at least detailed guidelines in the total disability. cannot enjoy the monthly income benefit
fifteen (15) years of service and is below operationalization of this section in the for permanent disability and the old-age
sixty (60) years of age at the time of rules and regulations implementing this Section 14. Periodic Pension retirement simultaneously.
resignation or separation. Act. Adjustment. - The monthly pension of all
pensioners including all those receiving (b) If a member who suffers
Section 12. Unemployment or RETIREMENT BENEFITS survivorship pension benefits shall be permanent total disability does not satisfy
Involuntary Separation Benefits. - periodically adjusted as may be conditions (1) and (2) in paragraph (a) of
Unemployment benefits in the form of Section 13. Retirement recommended by the GSIS actuary and this section but has rendered at least three
monthly cash payments equivalent to fifty Benefits. - (a) Retirement benefits shall be: approved by the Board in accordance with (3) years of service at the time of his
percent (50%) of the average monthly (1) the lump sum payment as defined in disability, he shall be advanced the cash
payment equivalent to one hundred Section 18. Temporary Total herein, the GSIS shall determined the not qualify for the benefits under item (1)
percent (100%) of his average monthly Disability Benefits. - (a) A member who nature of the disability and the or (2) of this paragraph.
compensation for each year of service he suffers temporary total disability for corresponding benefits therefor.
paid contributions, but not less than reasons not due to any of the conditions (b) The survivorship pension shall
Twelve thousand pesos (P12,000.00) enumerated in Section 15 hereof shall be SURVIVORSHIP BENEFITS be paid as follows: (1) when the
which should have been his separation entitled to seventy-five percent (75%) of dependent spouse is the only survivor,
benefit. his current daily compensation for each Section 20. Survivorship he/she shall receive the basic survivorship
day or fraction thereof of temporary Benefits. - When a member or pensioner pension for life or until he/she remarries;
(c) Unless the member has disability benefit not exceeding one dies, the beneficiaries shall be entitled to (2) when only dependent children are the
reached the minimum retirement age, hundred twenty (120) days in one calendar survivorship benefits provided in Sections survivors, they shall be entitled to the
disability benefit shall be suspended when: year after exhausting all his sick leave 21 and 22 hereunder subject to the basic survivorship pension for as long as
(1) he is reemployed; or (2) he recovers credits and collective bargaining conditions therein provided for. The they are qualified, plus the dependent
from his disability as determined by the agreement sick leave benefits, if any, but survivorship pension shall consist of: (1) children’s pension equivalent to ten
GSIS, whose decision shall be final and not earlier than the fourth day of his the basic survivorship pension which is percent (10%) of the basic monthly
binding; or (3) he fails to present himself temporary total disability: Provided, That: fifty percent (50%) of the basic monthly pension for every dependent child not
for medical examination when required by (1) he is in the service at the time of his pension; and (2) the dependent children’s exceeding five (5), counted from the
the GSIS. disability; or (2) if separated, he has pension not exceeding fifty percent (50%) youngest and without substitution; (3)
rendered at least three (3) years of service of the basic monthly pension. when the survivors are the dependent
(d) The following disabilities shall and has paid at least six (6) monthly spouse and the dependent children, the
be deemed total and permanent: (1) contributions in the twelve-month period Section 21. Death of a Member. dependent spouse shall receive the basic
complete loss of sight of both eyes; (2) immediately preceding his disability. - (a) Upon the death of a member, the survivorship pension for life or until he/she
loss of two (2) limbs at or above the ankle Provided, however, That a member cannot primary beneficiaries shall be entitled to: remarries, and the dependent children
or wrist; (3) permanent complete paralysis enjoy the temporary total disability benefit (1) survivorship pension: Provided, That shall receive the dependent children’s
of two (2) limbs; (4) brain injury resulting in and sick leave pay the deceased: (i) was in the service at the pension mentioned in the immediately
incurable imbecility or insanity; and (5) simultaneously: Provided, further, That if time of his death; or (ii) if separated from preceding paragraph (2) hereof.
such other cases as may be determined the disability requires more extensive the service, has at least three (3) years of
by the GSIS. treatment that lasts beyond one hundred service at the time of his death and has (c) In the absence of primary
twenty (120) days, the payment of the paid thirty-six (36) monthly contributions beneficiaries, the secondary beneficiaries
Section 17. Permanent Partial temporary total disability benefit may be within the five-year period immediately shall be entitled to: (1) the cash payment
Disability Benefits. - (a) If the disability is extended by the GSIS but not to exceed a preceding his death; or has paid a total of equivalent to one hundred percent (100%)
partial, he shall receive a cash payment in total of two hundred forty (240) days. at least one hundred eighty (180) monthly of his average monthly compensation for
accordance with a schedule of disabilities contributions prior to his death; or (2) the each year of service he paid contributions,
to be prescribed by the (b) The temporary total disability survivorship pension plus a cash payment but not less than Twelve thousand pesos
GSIS: Provided, That he satisfies either benefit shall in no case be less than equivalent to one hundred percent (100%) (P12,000.00): Provided, That the member
conditions (1) or (2) of Section 16 (a); (b) Seventy pesos (P70.00) a day. of his average monthly compensation for is in the service at the time of his death
The following disabilities shall be deemed every year of service: Provided, That the and has at least three (3) years of service;
permanent partial: (1) complete and (c) The notices required of the deceased was in the service at the time of or (2) in the absence of secondary
permanent loss of the use of: (i) any finger member and the employer, the mode of his death with at least three (3) years of beneficiaries, the benefits under this
(ii) any toe (iii) one arm (iv) one hand (v) payment, and the other requirements for service; or (3) a cash payment equivalent paragraph shall be paid to his legal heirs.
one foot (vi) one leg (vii) one or both ears entitlement to temporary total disability to one hundred percent (100%) of his
(viii) hearing of one or both ears (ix) sight benefits shall be provided in the rules and average monthly compensation for each (d) For purposes of the
of both eyes (2) such other cases as my regulations to be prescribed by the GSIS. year of service he paid contributions, but survivorship benefits, legitimate children
be determined by the GSIS. not less than Twelve thousand pesos shall include legally adopted and
Section 19. Non-scheduled (P12,000.00): Provided, That the legitimated children.
TEMPORARY DISABILITY Disability. - For injuries or illnesses deceased has rendered at least three (3)
BENEFITS resulting in a disability not listed in the years of service prior to his death but does Section 22. Death of a
schedule of partial/total disability provided Pensioner. - Upon the death of an old-age
pensioner or a member receiving the effectivity of this Act, their insurance shall four (4) years from the date of by the Supreme Court on April 8, 1997
monthly income benefit for permanent be deemed renewed on the day following contingency. which will take effect on July 1,
disability, the qualified beneficiaries shall the maturity or expiry date of their 1997: Provided, That pending cases and
be entitled to the survivorship pension insurance; (3) for those without any life Section 29. Facility of Payment. those filed prior to July 1, 1997 shall be
defined in Section 20 of this Act, subject to insurance as of the effectivity of this Act, - The GSIS shall prescribe rules and governed by the applicable rules of
the provisions of paragraph (b) of Section their insurance shall take effect following regulations to facilitate payment of procedure: Provided, further, That the
21 hereof. When the pensioner dies within said effectivity. benefits, proceeds, and claims under this appeal shall take precedence over all
the period covered by the lump sum, the Act and any other laws administered by other cases except criminal cases when
survivorship pension shall be paid only Section 25. Dividends. - An the GSIS. Payments made by the GSIS the penalty of life imprisonment or death
after the expiration of the said period. annual dividend may be granted to all prior to its receipt of an adverse claim, to a or reclusion perpetua is imposable.
members of the GSIS whose life insurance beneficiary or claimant subsequently found
FUNERAL BENEFITS is in force for at least one (1) year in not entitled thereto, shall not bar the legal The appeal shall not stay the
accordance with a dividends allocation and eligible recipient to his right to execution of the order or award unless
Section 23. Funeral Benefits. formula to be determined by the GSIS. demand the payment of benefits, ordered by the Board, by the Court of
- The amount of the funeral benefits shall proceeds, and claims from the GSIS, who Appeals or by the Supreme Court and the
be determined and specified by the GSIS Section 26. Optional Insurance. shall, however, have a right to institute the appeal shall be without prejudice to the
in the rules and regulations but shall not - Subject to the rules and regulations appropriate action in a court of law against special civil action of certiorari when
be less than Twelve thousand pesos prescribed by the GSIS, a member may the ineligible recipient. proper.
(P12,000.00): Provided, That it shall be apply for insurance and/or pre-need
increased to at least Eighteen thousand coverage embracing life, health, Section 30. Settlement of Section 32. Execution of
pesos (P18,000.00) after five (5) years hospitalization, education, memorial plans, Disputes. - The GSIS shall have original Decision. - When no appeal is perfected
and shall be paid upon the death of: (a) an and such other plans as may be designed and exclusive jurisdiction to settle any and there is no order to stay by the Board,
active member as defined under Section 2 by the GSIS, for himself and/or his disputes arising under this Act and any by the Court of Appeals or by the Supreme
(e) of this Act; or (b) a member who has dependents. Any employer may likewise other laws administered by the GSIS. Court, any decision or award of the Board
been separated from the service, but who apply for group insurance coverage for its shall be enforced and executed in the
may be entitled to future benefit pursuant employees. The payment of the The Board may designate any same manner as decisions of the Regional
to Section 4 of this Act; or (c) a pensioner, premiums/installments for optional member of the Board, or official of the Trial Court. For this purpose, the Board
as defined in Section 2 (o) of this Act; or insurance and pre-need products may be GSIS who is a lawyer, to act as hearing shall have the power to issue to the city or
(d) a retiree who at the time of his made by the insured or his employer officer to receive evidence, make findings provincial sheriff or its appointed sheriff
retirement was of pensionable age under and/or any person acceptable to the GSIS. of fact and submit recommendations, such writs of execution as may be
this Act but who opted to retire under together with all documentary and necessary for the enforcement of such
Republic Act No. 1616. Section 27. Reinsurance. - The testimonial evidence to the Board within decision or award, and any person who
GSIS may reinsure any of its interests or thirty (30) working days from the time the shall fail or refuse to comply with such
LIFE INSURANCE BENEFITS part thereof with any private company or parties have closed their respective decision, award, writ or process after
Section 24. Compulsory Life reinsurer whether domestic of evidence and filed their last pleading. The being required to do so shall, upon
Insurance. - All employees except for foreign: Provided, That the GSIS shall Board shall decide the case within thirty application by the GSIS, be punished for
Members of the Armed Forces of the submit an annual report on its reinsurance (30) days from the receipt of the hearing contempt.
Philippines (AFP) and the Philippine operations to the Insurance Commission. officer’s findings and recommendations.
National Police (PNP) shall, under such The cases heard directly by the Board Section 33. Oaths, Witnesses,
terms and conditions as may be d. Claims and shall be decided within thirty (30) working and Production of Records. - When
promulgated by the GSIS, be compulsorily Disputes (P.D. No. 1146 as amended by days from the time they are submitted by authorized by the Board, an official or
covered with life insurance, which shall R.A. No. 8291) the parties for decision. employee of the GSIS shall have the
automatically take effect as follows: (1) for power to administer oath and affirmation,
those employed after the effectivity of this Section 28. Prescription. Section 31. Appeals. - Appeals take deposition, certify to official acts, and
Act, their insurance shall take effect on the - Claims for benefits under this Act except from any decision or award of the Board issue subpoena ad
date of their employment; (2) for those for life and retirement shall prescribe after shall be governed by Rules 43 and 45 of testificandum and subpoena duces
whose insurance will mature after the the 1997 Rules of Civil Procedure adopted tecum to compel the attendance of
witnesses and the production of books, both sectors shall have his credible and one (1) day to twelve (12) years, or the GSIS within thirty (30) days from the
papers, correspondences, and other services or contributions in both Systems both, at the discretion of the court. date they should have been remitted
records deemed necessary as evidence in credited to his service or contribution under Section 6(a), shall be presumed to
connection with any question arising under record in each of the Systems and shall be (d) The treasurer, finance officer, have misappropriated such contribution or
this Act. Any case of contumacy shall be totalized for purposes of old-age, disability, cashier, disbursing officer, budget officer or loan amortization and shall suffer the
dealt with in accordance with the survivorship and other benefits in case the other official or employee who fails to penalties provided in Article 315 of the
provisions of Section 580 of the Revised covered member does not qualify for such include in the annual budget the amount Revised Penal Code, and in addition, shall
Administrative Code. benefits in either or both Systems without corresponding to the employer and suffer absolute perpetual disqualification
totalization: Provided, however, That employee contributions, or who fails or from holding public office and from
e. Portability overlapping periods of membership shall refuses or delays by more than thirty (30) practicing any profession or calling
be credited only once for purposes of days from the time such amount becomes licensed by the government.
The GSIS shall exercise the totalization. (Sec. 3, R.A. No. 7699) due and demandable, or to deduct the
following powers and functions: xxx (p.) to monthly contributions of the employee (g) The heads of the offices of the
enter into agreement with the Social f. Penalties (R.A. No. 8291) shall, upon conviction by final judgment, national government, its political
Security System or any other entity, suffer the penalties of imprisonment from subdivisions, branches, agencies and
enterprise, corporation or partnership for Section 52. Penalty. - (a) Any six (6) months and one (1) day to six (6) instrumentalities, including government-
the benefit of members transferring from person found to have participated directly years, and a fine of not less than Three owned or controlled corporations and
one system to another subject to the or indirectly in the commission of fraud, thousand pesos (P3,000.00) but not more government financial institutions, and the
provisions of Republic Act No. 7699, collusion, falsification, or than Six thousand pesos (P6,000.00), and personnel of such offices who are involved
otherwise known as the Portability Law; misrepresentation in any transaction with in addition, shall suffer absolute perpetual in the collection of premium contributions,
xxx (Sec. 41, P.D. No. 1146 as amended the GSIS, whether for him or for some disqualification from holding public office loan amortization and other accounts due
by R.A. No. 8291) other persons, shall suffer the penalties and from practicing any profession or the GSIS who shall fail, refuse or delay the
provided for in Article 172 of the Revised calling licensed by the government. payment, turnover, remittance or delivery
Portability shall refer to the Penal Code. of such accounts to the GSIS within thirty
transfer of funds for the account and (e) Any employee or member (30) days from the time that the same shall
benefit of a worker who transfers from one (b) Whoever shall obtain or who receives or keeps fund or property have been due and demandable shall,
system to the other. (Sec. 2(b), R.A. No. receive any money or check invoking any belonging, payable or deliverable to the upon conviction by final judgment, suffer
7699) provision of this Act or any agreement GSIS and appropriates the same, or takes the penalties of imprisonment of not less
thereunder, without being entitled thereto or misappropriates or uses the same for than one (1) year nor more than five (5)
System shall refer to either the with the intent to defraud any member, any any purpose other than authorized by this years and a fine of not less than Ten
SSS as created under Republic Act No. employer, the GSIS, or any third party, Act, or permits another person to take, thousand pesos (P10,000.00) nor more
1161, as amended or the GSIS as created shall be punished by a fine of not less than misappropriate or use said fund or than Twenty thousand pesos
under Presidential Decree No. 1146, as Five thousand pesos (P5,000.00) nor property by expressly consenting thereto, (P20,000.00), and in addition, shall suffer
amended. (Sec. 2(d), R.A. No. 7699) more than Twenty thousand pesos or through abandonment or negligence, or absolute perpetual disqualification from
(P20,000.00) or by imprisonment of not is otherwise guilty of the misappropriation holding public office and from practicing
Totalization shall refer to the less than six (6) years and one (1) day to of said fund or property, in whole or in part, any profession or calling licensed by the
process of adding up the periods of twelve (12) years, or both, at the discretion shall suffer the penalties provided in Article government.
creditable services or contributions under of the court. 217 of the Revised Penal Code, and in
each of the Systems, for purposes of addition, shall suffer absolute perpetual (h) The officers and/or personnel
eligibility and computation of benefits. (c) Whoever fails or refuses to disqualification from holding public office referred to in paragraph (g) of this section
(Sec. 2(e), R.A. No. 7699) comply with the provisions of this Act or and from practicing any profession or shall be liable not only criminally but also
with the rules and regulations adopted by calling licensed by the government. civilly to the GSIS or to the employee or
Provisions of any general or the GSIS, shall be punished by a fine of member concerned in the form of
special law or rules and regulations to the not less than Five thousand pesos (f) Any employee who, after damages, including surcharges and
contrary notwithstanding, a covered (P5,000.00) nor more than Twenty deducting the monthly contribution or loan interests.
worker who transfers employment from thousand pesos (P20,000.00) or amortization from a member’s (i) For the charges or complaints
one sector to another or is employed in imprisonment of not less than six (6) years compensation, fails to remit the same to referred to in paragraph (g) of this section,
the liabilities therein set forth shall be proportionate share in the premium
construed as waiver of the State of its payments or contributions, as provided by
immunity from suit, hence, the above- law.
mentioned officials and/or personnel may
not invoke the defense of non-suability of The domestic worker shall be
the State. entitled to all other benefits under existing
laws.
(j) Failure of the Members of the
GSIS Board, including the chairman and
the vice-chairman, to comply with the
provisions of paragraph (w) of Section 41
hereof, shall subject them to imprisonment
of not less than six (6) months nor more
than one (1) year or a fine of not less than
Five thousand pesos (P5,000.00) nor
more than Ten thousand pesos
(P10,000.00) without prejudice to any civil
or administrative liability which may also
arise therefrom.

(k) Criminal actions arising from

violations of the provisions of this Act may
be commenced by the GSIS or by the
aggrieved member, either under this Act
or, in appropriate cases, under the
Revised Penal Code.

R.A. No. 10361 (Domestic Workers Act

or Batas Kasambahay)

Section 30. Social and Other

Benefits. – A domestic worker who has
rendered at least one (1) month of service
shall be covered by the Social Security
System (SSS), the Philippine Health
Insurance Corporation (PhilHealth), and
the Home Development Mutual Fund or
Pag-IBIG, and shall be entitled to all the
benefits in accordance with the pertinent
provisions provided by law.

Premium payments or
contributions shall be shouldered by the
employer. However, if the domestic worker
is receiving a wage of Five thousand
pesos (P5,000.00) and above per month,
the domestic worker shall pay the