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Platon Notes - Labor Standards (Disini) PDF
Platon Notes - Labor Standards (Disini) PDF
B. Contract
E. Company Policies
Metropolitan Bank and Trust Company v. NLRC
589 SCRA 376 (2009)
It is a jurisprudential rule that where there is an established
employer practice of regularly, knowingly and voluntarily granting
benefits to employees over a significant period of time, despite
lack of a legal or contractual obligation on the part of the
employer to do so, the grant of such benefit ripens into a vested
right of the employees and can no longer be unilaterally reduced
or withdrawn by the employer
Suico v. NLRC
513 SCRA 325 (2007)
Company policies or practices are binding on the parties. Some
can ripen into a obligation on the part of the employer, such as
those benefits on employees or regulate the procedures and
requirements for their termination
China Banking Corporation v. Borromeo
440 SCRA 622 (2004)
It is well recognized that company policies and regulations are,
unless shown to be grossly oppressive or contrary to law,
generally binding and valid on the parties and must be complied
with until finally revised or amended unilaterally or preferable
through negotiation by competent authority
Maneja v. NLRC
290 SCRA 603 (1998)
It should be explained that company personnel policies are
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Limitations
1. The law and public policy on labor and social justice
2. The terms and conditions of the CBA
3. Principles of fair play and justice
Marival Trading, Inc. v. NLRC
525 SCRA 708 (2007)
Tinio v. CA
524 SCRA 533 (2007)
Section 2
LABOR AND THE CONSTITUTION
Statutory Reference: 1935, 1973, and 1987 Constitution
2.01 Historical Background/Rationale
Antamoc Goldfields Mining Co. v. CIR
70 Phil. 340 (2007)
In Commonwealth Act No. 103, and by it, our Government no
longer performs the role of a mere mediator or intervenor but
that of the supreme arbiter. The policy of laissez faire has to some
extent given way to the assumption by the government of the
right of intervention even in contractual relations affected with
public interests. Justice Laurel in Ang Tibay v. CIR states that our
Constitution was adopted in the midst of surging unrest and
dissatisfaction resulting from economic and social distress which
was threatening the stability of governments the world over.
Embodying the spirit present epoch, general provisions were
inserted in the Constitution which are intended to bring about the
needed social and economic equilibrium between component
elements of society through the application of what may be
termed as the justitia communis advocated by Grotius and
Leibnitz many years ago to be secured through the
counterbalancing of economic and social forces and opportunities
which should be regulated if not controlled, by the State or
placed, as it were, in custodia societatis. The promotion of social
justice to insure the well-being and economic security of all
people was thus inserted as vital principle in our Constitution
(Sec. 5, Art. II)
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Compare with:
A. Labor Sector
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ART. II, SEC. 10. The State shall promote social justice
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in all phases of national development
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PLDT v. Bolzo
530 SCRA 550 (2007)
Calalang v. Williams
70 Phil. 726 (1940)
[Social Justice is the] humanization of laws and the equalization of
social and economic forces by the State so that justice in its
rational and objective secular conception may at least be
approximated
Limits of Use
Telecommunications etc. v. Garriel
588 SCRA
Treveo v. Bobongan, etc
588 SCRA 1965 (2009)
C. Social Justice
Heirs or Jugalbot v. CA
518 SCRA 202 (2007)
Agabon v. NLRC
442 SCRA 573 (2004)
An employee who is clearly guilty of conduct violative of Article
282 should not be protected by the Social Justice Clause of the
Constitution - as the same may only be used to correct an
injustice.
The constitutional policy to provide full protection to labor is not
meant to be a sword to oppress employers. The commitment of
the courts to the cause of labor does not prevent them from
sustaining the employer when it is in the right.
Social justice is not based on rigid formulas set in stone--it has to
allow for changing times and circumstances--social justice, as the
term suggests, should be used only to correct an injustice
PLDT v. NLRC
164 SCRA 671 (1988)
The policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the
underprivileged.
Compassion for the poor is an imperative of every humane society
but only when the recipient is not a rascal claiming undeserved
privilege
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Labor as Property
Labor is life itself for the worker. It is not only personal to the
worker, because he has a family to recognize. It is livelihood.
Therefore, EE should be accorded substantive and procedural
due process
Executive Secretary v. CA
429 SCRA 81 (2004)
Asuncion v. NLRC
362 SCRA 56 (2001)
A workers employment is property in the constitutional sense. He
cannot be deprived of his work without due process. In order for
the dismissal to be valid, not only must it be based on just cause
supported by clear and convincing evidence, the employee must
also be given an opportunity to be heard and defend himself. It is
the employer who has the burden of proving that the dismissal
was with just or authorized cause. The failure of the employer to
discharge this burden means that the dismissal is not justified and
that the employee is entitled to reinstatement and backwages
Welfare State
Maneja v. NLRC
290 SCRA 603 (1998)
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Section 3
LABOR AND THE CIVIL CODE
Uypitching v. Quiamco
510 SCRA 172
Art. 19. Every person must in the exercise of his rights and in the
performance of his duties, act with justice, give every one his due,
and observe honesty and good faith?
Law Compliance
ART. 1700. The relations between capital and labor are not
merely contractual. They are so impressed with public interest
that labor contracts must yield to the common good. Therefore,
such contracts are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed shop, wages,
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working conditions, hours of labor and similar subjects
Sarmiento v. Tuico
162 SCRA 676 (1988)
It is also important to emphasize that the return-to-work order
not so much confers a right as it imposes a duty; and while as a
right it may be waived, it must be discharged as a duty even
against the workers will. Returning to work in this situation is not
a matter of option or voluntariness but of obligation
Labor Contracts
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Public Policy
Avon Cosmetics, Inc. v. Luna
511 SCRA 376 (2007)
Section 4
LABOR AND INTERNATIONAL COVENENTS
(LABOR STANDARDS AND WELFARE LAW)
4.01 Universal Declaration of Human Rights
ART. 7. All are equal before the law and are entitled
without any discrimination to equal protection of the
law. All are entitled to equal protection against any
discrimination in violation of this Declaration and
against any incitement to such discrimination.
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Section 5
THE LABOR CODE OF THE PHILIPPINES
5.01 Decree Title
ART. 2. This Code shall take effect six (6) months after
its promulgation.
International Conventions
International School Alliance of Educators v. Quisumbing
333 SCRA 13 (2000)
International law, which springs from general principles of law,
likewise proscribes discrimination. General principles of law
include principles of equity, i.e. the general principles of fairness
and justice, based on the test of what is reasonable. The Universal
Declaration of Human Rights, the International Covenant on
Economic, Social, and Cultural Rights, the International Covenant
on the Elimination of All Forms of Racial Discrimination in
Education, the Convention (No. 111) concerning Discrimination in
Respect of Employment and Occupation - all embody the general
principle against discrimination, the very antithesis of fairness and
justice. The Philippines, through its Constitution, has incorporated
this principle as part of its national laws
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5.05 Applicability
Requisite Relationship
Uy v. Buenao
484 SCRA 628 (2006)
Employee-Employer Relationship is important: It is jurisdictional
for provisions of the Labor Code on post-employment to apply
Test - GOCC
Only GOCC with Original Charters come under the Civil Service
Law. If such is organized under the Corporation Law, the Labor
Code shall govern and NLRC shall have jurisdiction over them
Note: But in terms of wages, Labor Code applies to all
LRTA v. Venus
485 SCRA 301 (2006)
Section 2 (1), Article IX ' B, 1987 Constitution, expressly provides
that '[t]he civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original
charters. Corporations with original charters are those which have
been created by special law and not through the general
corporation law. Thus, in Philippine National Oil Company ' Energy
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International Agencies
Labor Code is not applicable. Remedy: To ask RP to withdraw
the grant of immunity from suit
Ebro III v. NLRC
261 SCRA 399 (1996)
The Labor Code and the NLRCs jurisdiction also covers/ applies to
labor disputes uninvolving international; agencies except where
the latter possess immunity from legal processes of the
Philippines by virtue of law or generally-accepted international
law principles incorporated as part of the law of our land. The
petition is denied for lack of jurisdiction on the part of the NLRC
The grant of immunity is by virtue of the Convention on the
Privileges and Immunities of Specialized agencies of the UN
adopted by the Senate on May 17, 1949. This has become part of
the law of the land under the Constitution on generally accepted
principles of international law
School Teachers
Chiang Kaishek College v. CA
437 SCRA 171 (2004)
Policies should be adequately known to the employees and
uniformly implemented to the body of employees as a whole and
not in isolation
Constructive dismissal - the employee suffers a cessation from
work because continued employment is rendered impossible,
unreasonable, or unlikely by the employer. A demotion in rank,
diminution in pay, discrimination, insensibility or disdain by an
employer becomes unbearable to the employee
National Mines and Allied Workers Union v. San Idelfonso College
299 SCRA 24 (1998)
Petitioner teachers union filed a complaint for illegal dismissal
and ULP against respondent for violation of tenure
On the issue of whether the individual petitioners were
permanent employees, it is the Manual of Regulations for Private
Schools, and not the Labor Code, which is applicable
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Managerial Employees
Pearada v. Baganga Plywood Corp.
489 SCRA 94 (2006)
Article 82 of the Labor Code exempts managerial employees from
the coverage of labor standards
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Sweeping Interpretation
Bravo v. Employees Compensation Commission
143 SCRA 101 (1986)
The Court is aware if the mandate that social legislation should be
applied in consonance with the principles of social justice and
protection of labor. however, it cannot adopt a sweeping
interpretation of the law in favor of labor lest we engage in
judicial legislation
No Doubt
Bonifacio v. GSIS
146 SCRA 276 (1986)
Petitioner challenges an ECC decision affirming GSIS denial of his
claim for death benefits for the death of his wife (a schoolteacher)
due to breast cancer. His claim was denied on the ground that
breast cancer is not among the compensable occupational
diseases under Annex A
While we do not dispute petitioners contention that under the
law, in case of doubt in the implementation and interpretation of
the provisions of the Labor Code, including its implementing rules
Fairness
Reliance Surety and Insurance Co,, Inc. v. NLRC
193 SCRA 365 (1991)
Petitioner challenges an NLRC decision ordering reinstatement
without backwages of respondent employees (instead of
dismissal) after a four-week long illegal strike. The NLRC found the
strike to be illegal, but ordered reinstatement nonetheless
As a general rule, the sympathy of the Court is on the side of the
laboring classes, not only because the Constitution imposes
sympathy but because of the one-sided relation between labor
and capital. The Court must take care, however, that in the
contest between labor and capital, the results achieved are fair
and in conformity with the rules
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Section 6
WORK RELATIONSHIP
6.01 Work Relationship
A. Definitions: Employer and Employee
Employee
Uy v. Villanueva
526 SCRA 73 (2007)
An employee usually occupies no office and generally is employed
not by action of the directors or stockholders but by the managing
officer of the corporation who also determines the compensation
to be paid to such employee.
United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma
288 SCRA 15 (1998)
As can be seen from this description, a distinction exists between
those who have the authority to devise, implement and control
strategic and operational policies (top and middle managers) and
those whose task is simply to ensure that such policies are carried
out by the rank-and-file employees of an organization (first-level
managers/supervisors). What distinguishes them from the rankand-file employees is that they act in the interest of the employer
in supervising such rank-and-file employees.
Managerial employees may therefore be said to fall into two
distinct categories: the managers per se, who compose the
former group described above, and the supervisors who form
the latter group. Whether they belong to the first or the second
category, managers, vis--vis employers, are, likewise, employees
The rationale for inhibiting to and middle-level managerial
employees from joining labor unions is the evident conflict of
interest that may arise and the possibility that the Union will be
dominated by the employer
B. Employer-Employee Relationship
Four-Fold Test for Determining the Existence of an EmployerEmployee Relationship:
1. Selection of Employee (Hiring)
2. Payment of Wages
3. Power to Dismiss (Firing)
4. Control on Employee on Means and Methods (Control)
i. Control over both the results to be achieved and the
means to be used to achieve that result
ii. Does not require the actual existence of control but
only the mere existence of the right to control
Factual Test
Television and Production Exponents, Inc. v. Servaa
542 SCRA 578 (2008)
It bears emphasis that the existence of employer-employee
Television and Production Exponents, Inc. v. Servaa, G.R. No. 167648,
January 28, 2008
30
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Established
Miguel v. JCT Group, Inc.
453 SCRA 529 (2005)
The defense of respondents is anchored on an alleged lack of
employer-employee relationship with petitioners as stipulated in
the formers MOA with De Soleil. JCT further claims that any
relationship with De Soleil and the latters employees was
severed upon the termination of the Agreement. It is therefore
imperative to determine the nature of the MOA--WON it partook
only a consultancy agreement, in which no employer-employee
relationship existed between petitioners and respondents. The
test for determining an employer-employee relationship hinges
on resolving who has the power to select employees, who pays
their wages, who has the power to dismiss them, and who
exercises control in the methods and results by which the work is
accomplishedin resolving the status of the MOA, the test for
determining an employer-employee relationship has to be
applied
Wack-Wack Golf and Country Club v. NLRC
456 SCRA 280 (2005)
BSMI admitted that employed the respondents giving said retired
employees some degree of priority, and in order to have a
smooth transition of operations, in accordance with its own
recruitment policies, the respondent were made to sign
applications of employment, accepting the condition that they
were only hired by BSMI as probationary employees only. Not
being contrary to law, morals, good custom, public policy and
public order, these employment contracts, which the parties are
bound are considered valid
Unfortunately, after study and evaluation of its personnel
organization, BSMI was impelled to terminate the services if the
respondents on the ground of redundancy. this right to hire and
fire is another element of the employer-employee relationship
which actually existed between the respondent and BSMI, and
not with Wack-Wack
Factors
Masonic, etc. v. Madjos
605 SCRA 721 (2009)
The existence of an employer-employee relationship is a question
of fact which should be supported by substantial evidence.
Control Test
-To be distinguished from the control test used in Independent
Contractor; In IC, control is used not to test employer-employee
relationship but WON there is control (as to the means only) as
would warrant a relationship with an IC
Locsin v. PLDT
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Economic Test
-Entails looking into the existing economic conditions between
the parties, like the inclusion of the employee in the payrolls, in
determining the existence of an employer-employee
relationship
Reason: Application of a strict test such as the four-fold test can
lead to results that deal injustice to the employee
Secondary Test - Mischief Remedy Test
1. SSS
2. Withholding taxes
3. State Insurance Fund
4. Pag-Ibig Fund
(All these require that the recipient is an employee)
Sevilla v. CA
160 SCRA 171 (1988)
In this jurisdiction, there has been no uniform test to determine
the existence of an employer-employee relation. In general, we
have relied on the so-called right of control test where the
person for whom the services are performed reserves a right to
control not only the end to be achieved but also the means to be
used in reaching such end. Subsequently, however, we have
considered, in addition to the standard of right of control, the
existing economic conditions prevailing between the parties, like
the inclusion of the employees in the payrolls, in determining the
existence of an employer-employee relationship
Francisco v. NLRC
500 SCRA 690 (2006)
In Sevilla v. Court of Appeals, we observed the need to consider
the existing economic conditions prevailing between the parties,
in addition to the standard of right-of-control like the inclusion of
the employee in the payrolls, to give a clearer picture in
determining the existence of an employer-employee
relationship based on an analysis of the totality of economic
circumstances of the worker.
Thus, the determination of the relationship between employer
and employee depends upon the circumstances of the whole
economic activity, such as:
(1) the extent to which the services performed are an integral
part of the employers business;
(2) the extent of the workers investment in equipment and
facilities;
(3) the nature and degree of control exercised by the employer;
(4) the workers opportunity for profit and loss;
(5) the amount of initiative, skill, judgment or foresight required
for the success of the claimed independent enterprise;
(6) the permanency and duration of the relationship between the
worker and the employer; and
(7) the degree of dependency of the worker upon the employer
for his continued employment in that line of business.
The proper standard of economic dependence is whether the
worker is dependent on the alleged employer for his continued
employment in that line of business. In the United States, the
touchstone of economic reality in analyzing possible employment
relationships for purposes of the Federal Labor Standards Act is
dependency. By analogy, the benchmark of economic reality in
analyzing possible employment relationships for purposes of the
Labor Code ought to be the economic dependence of the worker
on his employer.
Agreement
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Chavez v. NLRC
478 (2005)
The contract of service,\ to the contrary notwithstanding, the
factual circumstances earlier discussed indubitably establish the
existence of an employer-employee relationship between the
respondent company and the petitioner. It bears stressing that
the existence of an employer-employee relationship cannot be
negated by expressly repudiating it in a contract and providing
therein that the employee is an independent contractor when, as
in this case, the facts clearly show otherwise. Indeed, the
employment status of a person is defined and prescribed by law
and not by what the parties say it should be.
San Miguel Corp v. Abella
461 SCRA 392 (2005)
The Contract of Service between SMC and Sunflower shows that
the parties clearly disapproved the existence of an employeremployee relationship between SMC and private respondents.
The language of a contract is not, however, determinative of the
parties relationship, rather it is the totality of facts and
surrounding circumstances of the case. A party cannot dictate, by
the mere expedient of a unilateral declaration in a contract, the
character of its business, i.e., whether labor only contractor or job
contractor, it being crucial that its character be measured in
terms of and determined by the criteria set by statute
Lopez v. MWSS
462 SCRA 428 (2005)
MWSS makes an issue out of the proviso in the Agreement that
specifically denies the existence of employer-employee
relationship between it and petitioners. It is axiomatic(supra)
Sonza v. ABS-CBN
431 SCRA 381 (2004)
Insular Life v. NLRC
287 SCRA 476 (1998)
It is axiomatic that the existence of an employer-employee
relationship cannot be negated by expressly repudiating it in the
management contract and providing therein that the employee
is an independent contractor when the terms of the agreement
clearly show otherwise. For the employment status of a person is
defined and prescribed by law and not by what the parties say it
should be. In determining the status of the management contract,
the four-fold test on employment earlier mentioned has to be
applied
Hours of Work
Lazaro v. SSS
435 SCRA 472 (2004)
Neither does it follow that a person who does not observe normal
hours of work cannot be deemed an employee. In Cosmopolitan
Funeral Homes Inc. v. Maalat, the employer similarly denied the
existence of an employer-employee relationship, as the claimant
according to it, was a supervisor on commission basis who did not
observe normal hours of work. this Court declared that there was
an employer-employee relationship, noting that, although
compensated on commission basis, is exempt from the
observance of normal hours of works for his compensation is
measured by the number of sales he makes
Dumpit-Murillo v. CA
524 SCRA 290 (2007)
In our view, the requisites for regularity of employment have
been met in the instant case. Gleaned from the description of the
scope of services aforementioned, petitioners work
was necessary or desirable in the usual business or trade of the
employer which includes, as a pre-condition for its
enfranchisement, its participation in the governments news and
public information dissemination. In addition, her work was
continuous for a period of four years. This repeated engagement
under contract of hire is indicative of the necessity and
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Domasig v. NLRC
261 SCRA 779 (1996)
It has long been established that in administrative and quasijudicial proceedings, substantial evidence is sufficient as a basis
for judgment on the existence of employer-employee
relationship. No particular form of evidence is required to prove
the existence of such
Absence of Relationship
Lopez v. Bodega City
532 SCRA 56 (2007)
The so-called control test is commonly regarded as the most
crucial and determinative indicator of the presence or absence of
an employer-employee relationship. Under the control test, an
employer-employee relationship exists where the person for
whom the services are performed reserves the right to control
not only the end achieved, but also the manner and means to be
used in reaching that end.
A. Independent Contractor
Recognition
Temic etc v. Temic
609 SCRA 355 (2009)
Coca Cola etc v. Dela Cruz
608 SCRA 16 (2009)
The law allows contracting and subcontracting involving services
but closely regulates these activities for the protection of
workers.Thus, an employer can contract out part of its
operations, provided it complies with the limits and standards
provided in the Code and in its implementing rules.
In strictly laymans terms, a manufacturer can sell its products on
its own, or allow contractors, independently operating on their
own, to sell and distribute these products in a manner that does
not violate the regulations. From the terms of the above-quoted
D.O. 18-02, the legitimate job contractor must have the
capitalization and equipment to undertake the sale and
distribution of the manufacturers products, and must do it on its
own using its own means and selling methods
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equipment
directly
or
intended to be related to the
job contracted
2. Carries an independent
business different from the
employers
3. Undertakes to perform
the job under its own
account and responsibility
Trilateral Relationship
PAL v. Ligan
547 SCRA 181 (2008)
In Department Order (D.O.) No. 18-02, Series of 2002:
Section 3. Trilateral relationship in contracting arrangements. In
legitimate contracting, there exists a trilateral relationship under
which there is a contract for a specific job, work or service
between the principal and the contractor or subcontractor, and a
contract of employment between the contractor or subcontractor
and its workers. Hence, there are three parties involved in these
arrangements, the principal which decides to farm out a job or
service to a contractor or subcontractor, the contractor or
subcontractor which has the capacity to independently undertake
the performance of the job, work or service, and the contractual
workers engaged by the contractor or subcontractor to
accomplish the job, work or service.
equipment
2.
No
business
independent
3. Performs activities
directly related to the
main business of the
principal
4. Under control and
supervision of the ER
Principal treated as direct
employer of the person
recruited in all instances
Liable fully as an ER
Prohibited
INDEPENDENT
CONTRACTORS
1. Has sufficient substantial
capital/
investment
in
machinery,
tools
or
LABOR ONLY
CONTRACTORS
1. No substantial capital/
investment in the form of
machinery,
tools
or
Desirable - Unnecessary
Manila Electric Co v. Benamira
463 SCRA 331 (2005)
Security guard unnecessary in distribution of electricity
Coca Cola Bottlers Phil., Inc. v. NLRC
307 SCRA 131 (1999)
The court took judicial notice of the practice adopted in several
institutions and industries of hiring janitorial services on an
independent contractor basis. In this respect, although the
janitorial services may be considered as directly related to the
principal business of an employer, as with every business, we
deemed them unnecessary in the conduct of the employers
principal business
Proof
Oregas v. NLRC
559 SCRA 153
Employer-Employee Relationship
Mercury Drug Corp v. Libunao
434 SCRA 404 (2004)
The petitioner had assigned Sido to help the management open
and close the door of the drug store; inspect the bags of
customers as they enter the store; and, check the receipts issued
by the cashier to said customers for their purchases. Such
circumstances do not automatically make the security guard the
employee of the petitioner, and, as such, liable for the guard's
tortious acts. The fact that a client company may give instructions
or directions to the security guards assigned to it, does not, by
itself, render the client responsible as an employer of the security
guards concerned and liable for their wrongful acts or omissions.
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Liability
Jaguar v. Sales
552 SCRA 295 (2008)
This joint and several liability facilitates, if not guarantees,
payment of the workers' performance of any work, task, job or
project, thus giving the workers ample protection as mandated by
the 1987 Constitution.
labor-only contractors as they did not supply, recruit nor hire the
workers.
C. Effect of Finding
Mandaue etc v. Andales
548 SCRA 17 (2008)
San Miguel Corp v. MAERC Integrated Services, Inc
405 SCRA 579 (2003)
In legitimate job contracting, the law creates an employeremployee relationship for a limited purpose, i.e., to ensure that
the employees are paid their wages. The principal employer
becomes jointly and severally liable with the job contractor only
for the payment of the employees' wages whenever the
contractor fails to pay the same. Other than that, the principal
employer is not responsible for any claim made by the
employees.
On the other hand, in labor-only contracting, the statute creates
an employer-employee relationship for a comprehensive
purpose: to prevent a circumvention of labor laws. The contractor
is considered merely an agent of the principal employer and the
latter is responsible to the employees of the labor-only contractor
as if such employees had been directly employed by the principal
employer. The principal employer therefore becomes solidarily
liable with the labor-only contractor for all the rightful claims of
the employees.
Aboitiz Haulers, Inc v. Dimapatol
502 SCRA 271 (2006)
Coca Cola etc v. Dela Cruz
608 SCRA 16 (2009)
MERALCO v. NLRC
548 SCRA 315 (2008)
Eparwa Security v. Liceo de Cagayan
608 SCRA 370 (2007)
Section 7
EMPLOYEE CLASSIFICATION
7.01 Coverage
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Nature of Issue
Universal Robina etc v. Caballeda
560 SCRA 115
Whether or not Agripino was a seasonal/project employee or a
regular employee is a question of fact. As such, this Court is not at
liberty to review the said factual issue because our jurisdiction is
generally limited to reviewing errors of law that the CA may have
committed. Time and again, we have held that this Court is not a
trier of facts, and it is not for us to re-examine and re-evaluate
the probative value of evidence presented before the LA, the
NLRC and the CA, which formed the basis of the assailed decision.
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Nature of Work
Hiring Extend Period
Magsalin v. National Organization of Working Men
403 SCRA 199
In determining whether an employment should be considered
regular or non-regular, the applicable test is the reasonable
connection between the particular activity performed by the
employee in relation to the usual business or trade of the
employer. The standard, supplied by the law itself, is whether
the work undertaken is necessary or desirable in the usual
business or trade of the employer, a fact that can be assessed by
looking into the nature of the services rendered and its relation
to the general scheme under which the business or trade is
pursued in the usual course. It is distinguished from a specific
undertaking that is divorced from the normal activities required in
carrying on the particular business or trade. But, although the
work to be performed is only for a specific project or seasonal,
where a person thus engaged has been performing the job for at
least one year, even if the performance is not continuous or is
merely intermittent, the law deems the repeated and continuing
need for its performance as being sufficient to indicate the
necessity or desirability of that activity to the business or trade of
the employer. The employment of such person is also then
deemed to be regular with respect to such activity and while such
activity exists.
The postproduction activities done by sales route helpers are
important. The nature of the work performed must be viewed
from a perspective of the business or trade in its entirety and not
on a confined scope.
Hacienda Fatima v. National Federation of Sugarcane WorkersFood and General Trade
396 SCRA 518
The primary standard of determining regular employment is the
reasonable connection between the particular activity performed
by the employee in relation to the usual trade or business of the
employer. The test is whether the former is usually necessary or
desirable in the usual trade or business of the employer. The
connection can be determined by considering the nature of the
work performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has been
performing the job for at least a year, even if the performance is
Imbuido v. NLRC, 329 SCRA 357
Maraguinot v. NLRC, (1998)
33 Manila Hotel v. CIR
31
32
Contract to Contract
Beta Electric Corp v. NLRC
182 SCRA 384
The petitioner can not rightfully say that since the private
respondent's employment hinged from contract to contract, it
was ergo, "temporary", depending on the term of each
agreement. Under the Labor Code, an employment may only be
said to be "temporary" "where [it] has been fixed for a specific
undertaking the completion of or termination of which has been
determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season." Quite to
the contrary, the private respondent's work, that of "typist-clerk"
is far from being "specific" or "seasonal", but rather, one,
according to the Code, "where the employee has been engaged
to perform activities which are usually necessary or desirable in
the usual business." And under the Code, where one performs
such activities, he is a regular employee, "[t]he provisions of
written agreement to the contrary notwithstanding.
Universal Robina Corporation v. Catapang
473 SCRA 189
It is obvious that the said five-month contract of employment was
used by petitioners as a convenient subterfuge to prevent private
respondents from becoming regular employees. Such contractual
arrangement should be struck down or disregarded as contrary to
public policy or morals. To uphold the same would, in effect,
permit petitioners to avoid hiring permanent or regular
employees by simply hiring them on a temporary or casual basis,
thereby violating the employees security of tenure in their jobs.
Petitioners act of repeatedly and continuously hiring private
respondents in a span of 3 to 5 years to do the same kind of
work negates their contention that private respondents were
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Length of Time
Maraguinot v. NLRC
284 SCRA 539
The length of time during which the employee was continuously
re-hired is not controlling, but merely serves as a badge of regular
employment.
Abesco Construction And Development Corporation v. Ramirez
487 SCRA 9
The SC ruled that respondents were regular employees but not
for the reasons given by the LA (which both the NLRC and the CA
affirmed). Citing Palomar, et al. v. NLRC, the SC held that contrary
to the disquisitions of the LA, employees (like respondents) who
work under different project employment contracts for several
years do not automatically become regular employees; they can
remain as project employees regardless of the number of years
they work. Length of time is not a controlling factor in
determining the nature of ones employment.
Seafarers
It is clear that seafarers are considered contractual employees.
They can not be considered as regular employees under Article
280 of the Labor Code. Their employment is governed by the
contracts they sign everytime they are rehired and their
employment is terminated when the contract expires. Their
employment is contractually fixed for a certain period of time.
They fall under the exception of Article 280 whose employment
has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the
time of engagement of the employee or where the work or
services to be performed is seasonal in nature and the
employment is for the duration of the season.
Defined
ALU-TUCP v. NLRC
234 SCRA 678
In business and industry, project could refer to one or the other
of at least two distinguishable types of activities. Firstly, a project
could refer to a particular job or undertaking that is within the
regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other
undertakings of the company. Such job or undertaking begins and
ends at determined or determinable times. Secondly, the term
project could also refer to a particular job or undertaking that is
not within the regular business of the corporation. Such job or
undertaking must also be identifiably separate and distinct from
the ordinary or regular business operations of the employer. The
job or undertaking also begins and ends at determined or
determinable times.
Whichever type of project employment is found in a particular
case, a common basic requisite is that the designation of named
employees as project employees and their assignment to a
specific project, are effected and implemented in good faith, and
not merely as a means of evading otherwise applicable
requirements of labor laws.
KIAMCO V NLRC
309 SCRA 424
In Violeta v. NLRC [10 October 1997, 280 SCRA 520.] it was held The principal test for determining whether particular employees
are properly characterized as "project employees," as
distinguished from "regular employees," is whether or not the
"project employees" were assigned to carry out a "specific project
or undertaking," the duration (and scope) of which were specified
at the time the employees were engaged for that project. As
defined, project employees are those workers hired (1) for a
specific project or undertaking, and (2) the completion or
termination of such project or undertaking has been determined
at the time of engagement of the employee.
Under Policy Instruction No. 20 of the Secretary of Labor, project
employees are those employed in connection with a particular
project. Non-project or regular employees are those employed
without reference to any particular project.
Project Employees
Phil. Jai-Alai & Amusement Corp v. Clave
126 SCRA 299
Private respondents were hired for a specific project - to renovate
the main building, where major repairs such as painting the main
building, repair of the roof, cleaning of clogged water pipes and
drains, and other necessary repairs were required.
It was made known, and so understood at the start of the hiring,
that their services would last until the completion of the
renovation. They rendered service from February 2 to December
11, 1976, almost 11 months, but less than a year.
There could be no other reason, however, than that the
termination of private respondents was because their services
were no longer needed and they had nothing more to do since
the project for which they were hired had been completed.
Not being regular employees, it cannot be justifiably said that
petitioner had dismissed them without just cause.
Sandoval v. NLRC
136 SCRA 675
Project Employees, as distinguished from regular or non-project
employees, are mentioned in Article 281 of the Labor Code, as
those where the employment has been fixed for a specific
project or undertaking the completion or termination of which
has been determined at the time of the engagement of the
employee
Respondent Deputy Minister himself affirmed such finding. He
ruled that the complainants are project workers whose
employments are coterminous with the completion of the
project, regardless of the number of projects in which they have
worked, as provided under Policy Instructions No. 20 of the
Ministry of Labor and Employment and as their employment is
one for a definite period, they are not entitled to separation pay.
Imbuido v. NLRC
329 SCRA 357
We agree with the findings of the NLRC that petitioner is a project
employee. The principal test for determining whether an
employee is a project employee or a regular employee is whether
the project employee was assigned to carry out a specific project
or undertaking, the duration and scope of which were specified at
the time the employee was engaged for that project. A project
employee is one whose employment has been fixed for a specific
project or undertaking, the completion or termination of which
has been determined at the time of the engagement of the
employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the
season. In the instant case, petitioner was engaged to perform
activities which were usually necessary or desirable in the usual
business or trade of the employer, as admittedly, petitioner
worked as a data encoder for private respondent, a corporation
engaged in the business of data encoding and keypunching, and
23 | P
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just and authorized causes enumerated under the Labor Code and
under the emloyment contract.
Specific Period
Pure Foods Corporation v. NLRC
174 SCRA 415
Criteria under which term employment cannot be said to be in
circumvention of the law on security of tenure:
a) The fixed period of employment was knowingly and voluntarily
agreed upon by the parties without any force, duress, or
improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent; or
b) It satisfactorily appears that the employer and the employee
dealt with each other on more or less equal terms with no moral
dominance exercised by the former over the latter.
It was shown that it was really the practice of the company to hire
workers on a uniformly fixed contract basis and replace them
upon the expiration of their contracts with other workers on the
same employment duration. This scheme of PFC was apparently
designed to prevent the private respondents and the other
"casual" employees from attaining the status of a regular
employee. It was a clear circumvention of the employees' right to
security of tenure and to other benefits like minimum wage, costof-living allowance, sick leave, holiday pay, and 13th month pay.
Rationale
De Ocampo v. NLRC
186 SCRA 360
The Court stress the rule in Cartagenas v. Romago Electric Co.,
that contract workers are not considered regular employees, their
services being needed only when there are projects to be
undertaken. 'The rationale of this rule is that if a project has
already been completed, it would be unjust to require the
employer to maintain them in the payroll while they are doing
absolutely nothing except waiting until another project is begun,
if at all. In effect, these stand-by workers would be enjoying the
status of privileged retainers, collecting payment for work not
done, to be disbursed by the employer from profits not earned.
This is not fair by any standard and can only lead to a coddling of
labor at the expense of management.
Noteworthy in this connection is Policy Instruction No. 20 of the
Department of Labor, providing that "project employees are not
entitled to separation pay if they are terminated as a result of the
completion of the project or any phase thereof in which they are
employed, regardless of the projects in which they had been
employed by a particular construction company." This rule would
entitle project employees to separation pay if the projects they
are working on have not yet been completed when their services
are terminated. And this should be true even if their contracts
have expired, on the theory that such contracts would have been
renewed anyway because their services were still needed.
Employer Obligation
A.M. Oreta & Co Inc v. NLRC
176 SCRA 218
The law is clear to the effect that in all cases involving employees
engaged on probationary' basis, the employer shall make known
to the employee at the time he is hired, the standards by which
he will qualify as a regular employee. Nowhere in the
employment contract executed between petitioner company and
respondent Grulla is there a stipulation that the latter shall
undergo a probationary period for three months before he can
quality as a regular employee. There is also no evidence on record
showing that the Grulla had been apprised of his probationary
status and the requirements which he should comply in order to
be a regular employee. In the absence of these requisites, there is
justification in concluding that respondent Grulla was a regular
employee at the time he was dismissed by petitioner.
As such, he is entitled to security of tenure during his period of
employment and his services cannot be terminated except for
Continuous Rehiring
Chua v. CA
440 SCRA 121
This Court has held that an employment ceases to be co-terminus
with specific projects when the employee is continuously rehired
due to the demands of the employers business and re-engaged
for many more projects without interruption.
C.E. Construction Corp v. Cioco
437 SCRA 648
We again hold that the fact that the WORKERS have been
employed with the COMPANY for several years on various
projects, the longest being nine (9) years, did not automatically
make them regular employees considering that the definition of
regular employment in Article 280 of the Labor Code, makes
specific exception with respect to project employment. The rehiring of petitioners on a project-to-project basis did not confer
upon them regular employment status.
Workpool Employees
Maraguinot v. NLRC
284 SCRA 539
A project employee or a member of a work pool may acquire the
status of a regular employee when the following concur:
1) There is a continuous rehiring of project employees even after
cessation of a project; and
2) The tasks performed by the alleged project employee are
vital, necessary and indispensable to the usual business or trade
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of the employer.
However, the length of time during which the employee was
continuously re-hired is not controlling, but merely serves as a
badge of regular employment.
Aguilar v. NLRC
269 SCRA 596
"Members of a work pool from which a construction company
draws its project employees, if considered employees of the
construction company while in the work pool, are non-project
employees or employees for an indefinite period. If they are
employed in a particular project, the completion of the project or
any phase thereof will not mean severance of (the) employeremployee relationship."
Abesco Construction and Development Corporation v. Ramirez
487 SCRA 9
Length of Service
Palomares v. NLRC
277 SCRA 439
Length of service is not the controlling determinant of the
employment tenure of a project employee. As stated earlier, it is
based on whether or not the employment has been fixed for a
specific project or undertaking, the completion of which has been
determined at the time of the engagement of the employee.
Furthermore, the second paragraph of Article 280, providing that
an employee, who has rendered service for at least one (1) year,
shall be considered a regular employee, pertains to casual
employees and not to project employees such as petitioners.
Filipinas Pre-Fabricated Building Systems Inc v. Puente
453 SCRA 820
It is a settled rule that the length of service of a project employee
is not the controlling test of employment tenure but whether or
not the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement of the employee.
LATON
Oil
Company-Energy
Development
Seasonal Employees
MAGCALAS V NLRC (KOPPEL INC)
269 SCRA 453
The services of project employees are co-terminus with the
project and may be terminated upon the end or completion of
the project for which they were hired. Regular employees, in
contrast, are legally entitled to remain in the service of their
employer until that service is terminated by one or another of the
recognized modes of termination of service under the Labor
Code. The employment of seasonal employees, on the other
hand, legally ends upon completion of the project or the season.
PHILIPPINE TOBACCO V NLRC
300 SCRA 37
Seasonal workers who are called from time to time and are
temporarily laid off during off-season are not separated from
service in said period, but are merely considered on leave until reemployed
SAN MIGUEL CORPORATION V NLRC (GUZMAN)
297 SCRA 277
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Section 8
PROBATIONARY EMPLOYEE
Statutory Reference: Probationary Employees - 281; 61, 2
sentence, Book VI, Rule I, Sec. 6, Omnibus Rules
nd
ART. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates
of apprentices, shall conform to the rules issued by
the Secretary of Labor and Employment. The period
of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates
below the legal minimum wage, which in no case shall
start below 75 percent of the applicable minimum
wage, may be entered into only in accordance with
apprenticeship programs duly approved by the
Secretary of Labor and Employment. The Department
shall develop standard model programs of
apprenticeship.
GR: Abbreviation/ Lengthening of the probationary period part of the employers management function
Purpose
PHILEMPLOY SERVICES V RODRIGUEZ
486 SCRA 302
There is probationary employment where the employee, upon his
engagement, is made to undergo a trial period during which the
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Duration/ Exception
BUISER V LEOGARDO
131 SCRA 151
Generally, the probationary period of employment is limited to
six (6) months. The exception to this general rule is when the
parties to an employment contract may agree otherwise, such as
when the same is established by company policy or when the
same is required by the nature of work to be performed by the
employee. In the latter case, there is recognition of the exercise
of managerial prerogatives in requiring a longer period of
probationary employment, such as in the present case where the
probationary period was set for eighteen (18) months, i.e. from
May, 1980 to October, 1981 inclusive, especially where the
employee must learn a particular kind of work such as selling, or
when the job requires certain qualifications, skills, experience or
training.
LATON
Criteria Regularization
ALCIRA V NLRC
431 SCRA 508
Section 6 (d) of rule 1 of the IRR Book VI of the Labor Code: In all
cases involving employees engaged on probationary basis, the
employer shall make known to the employee the standards under
which he will qualify as a regular employee at the time of his
engagement. Where o standards are made known to the
employee at that time, he shall be deemed a regular employee
WON Middleby informed petitioner of standards for
regularization at the start of his employment. Middleby
substantially notified the petitioner of the standards of a regular
employee when it apprised him, at the start of his employment,
that it would evaluate his supervisory skills after 5 months. That
the appointment paper contained the remark that Alcira would
be subjected to a performance evaluation is enough notice that
the probationary basis of his employment was conditional
(conditioned upon his meeting of performance standards)
Extension of Contract
MARIWASA V LEOGARDO
169 SCRA 465
For the extension of Dequila's probation was ex gratia, an act of
liberality on the part of his employer affording him a second
chance to make good after having initially failed to prove his
worth as an employee. Such an act cannot now unjustly be turned
against said employer's account to compel it to keep on its payroll
one who could not perform according to its work standards. The
law, surely, was never meant to produce such an inequitable
result.
By voluntarily agreeing to an extension of the probationary
period, Dequila in effect waived any benefit attaching to the
completion of said period if he still failed to make the grade
during the period of extension. The Court finds nothing in the law
which by any fair interpretation prohibits such a waiver. And no
public policy protecting the employee and the security of his
tenure is served by prescribing voluntary agreements which, by
reasonably extending the period of probation, actually improve
and further a probationary employee's prospects of
demonstrating his fitness for regular employment.
Absorbed Employees
CEBU STEVEDORING CO INC V REGIONAL DIRECTOR
Double Probation
A PRIME SECURITY SERVICES INC V NLRC
322 SCRA 283
The Court cannot sanction the practice of some companies which,
shortly after a worker has become a regular employee, effects the
transfer of the same employee to another entity whose owners
are the same, or identical, in order to deprive subject employee
of the benefits and protection he is entitled to under the law.
The complainant became a regular employee upon completion of
his six-month period of probation. Private respondent started
working on January 30, 1988 and completed the said period of
probation on July 27, 1988. Thus, at the time private respondent
was dismissed on August 1, 1988, he was already a regular
employee with a security of tenure. He could only be dismissed
for a just and authorized cause. There is no basis for subjecting
private respondent to a new probationary or temporary
employment on January 30, 1988, considering that he was
already a regular employee when he was absorbed by A Prime
from Sugarland, its sister company.
LATON
Section 1
EMPLOYMENT POLICY
1.01 Pre-Employment Policy - Statement of Objectives
PART 2
LABOR STANDARDS
Purpose
MARIVELES SHIPYARD CORP V CA (REGONDOLA)
415 SCRA 573
Labor standards are enacted by the legislature to alleviate the
plight of workers whose wages barely meet the spiraling costs of
basic needs. Labor laws are considered written in every contract.
Stipulations in violation thereof are considered null. Similarly,
legislated wage increases are deemed amendments to the
contract. Thus, employers cannot hide behind their contracts in
order to evade their (or their contractors or subcontractors)
liability for noncompliance with the statutory minimum wage.
When the agency as contractor failed to pay the guards, the
corporation as principal becomes jointly and severally liable to
the guards wages. The security agency is held liable by virtue of
LATON
PEOPLE V PANIS
142 SCRA 664
The number of persons dealt with is not an essential ingredient of
the act of recruitment and placement of workers. Any of the acts
mentioned in the basic rule in Article 13(b) will constitute
recruitment and placement even if only one prospective worker is
involved. The proviso merely lays down a rule of evidence that
where a fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the individual
or entity dealing with them shall be deemed to be engaged in the
act of recruitment and placement.
The proviso was intended neither to impose a condition on the
basic rule nor to provide an exception thereto but merely to
create a presumption. The presumption is that the individual or
entity is engaged in recruitment and placement whenever he or it
is dealing with two or more persons to whom, in consideration of
a fee, an offer or promise of employment is made in the course of
the "canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring (of) workers."
PEOPLE V SAULO
344 SCRA 605
Recruitment under the Labor Code refers to any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers and includes referrals, contract services,
promising or advertising for employment locally or abroad,
whether for profit or not; Provided, that any person or entity in
which, in any manner, offers or promises for a fee employment to
two or more persons shall be deemed engaged in recruitment
and placement.
Allowed Entities
A. Private
B. Public
LATON
PEOPLE V BULI-E
404 SCRA 105
The essential elements of the crime of illegal recruitment in large
scale are (1) the accused engages in acts of recruitment and
placement of workers defined under Article 13(b) or in any
prohibited activities under Article 34 of the Labor Code; (2) the
accused has not complied with the guidelines issued by the
Secretary of Labor and Employment, particularly with respect to
the securing of a license or an authority to recruit and deploy
workers, either locally or overseas; and (3) the accused commits
the unlawful acts against three or more persons, individually or as
a group. When illegal recruitment is committed in large scale or
when it is committed by a syndicate, it is considered as an offense
involving economic sabotage.
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LATON
LATON
PEOPLE V DUJUA
422 SCRA 169
PEOPLE V SAGAYAGA
423 SCRA 468
Recruitment is any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers
or promises for a fee employment to two or more persons shall
be deemed engaged in recruitment and placement.
Section 6 of Rep. Act No. 8042 provides that illegal recruitment
shall be considered an offense involving economic sabotage if
committed in large scale, viz, committed against three (3) or more
persons individually or as a group, the imposable penalty for
which is life imprisonment and a fine of not less than P500,000.00
nor more than P1,000,000.00. In this case, there are three private
complainants, namely, Elmer Janer, Eric Farol and Elmer Ramos.
The trial court, thus, correctly convicted the appellant of large
scale illegal recruitment and sentenced her to suffer life
imprisonment.
PEOPLE V BAYTIC
398 SCRA 18
Illegal recruitment is committed when two (2) elements concur.
First, the offender has no valid license or authority required by
law to enable one to engage lawfully in recruitment and
placement of workers. Second, he or she undertakes either any
activity within the meaning of "recruitment and placement"
defined under Art. 13, par. (b), or any prohibited practices
enumerated under Art. 34 of the Labor Code. In case of illegal
recruitment in large scale, a third element is added: that the
accused commits the acts against three or more persons,
individually or as a group.
Large Scale
PEOPLE V BULI-E
404 SCRA 105
Illegal recruitment is committed when two (2) elements concur.
First, the offender has no valid license or authority required by
law to enable one to engage lawfully in recruitment and
placement of workers. Second, he or she undertakes either any
activity within the meaning of "recruitment and placement"
defined under Art. 13, par. (b), or any prohibited practices
enumerated under Art. 34 of the Labor Code. In case of illegal
Referrals
PEOPLE V MERIS
329 SCRA 33
The prosecution undoubtedly proved that accused-appellant,
without license or authority, engaged in recruitment and
placement activities. This was done in collaboration with Julie
Micua, when they promised complainants employment in
Hongkong. Art. 13, par. (b) of the Labor Code defines recruitment
and placement as "any act of canvassing enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not;
Provided that any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement."
Although accused-appellant was not an employee of the alleged
illegal recruiter Julie Micua, the evidence show that she was the
one who approached complainants and prodded them to seek
employment abroad. It was through her that they met Julia
Micua. This is clearly an act of referral.
Illegal recruitment is conducted in a large scale if perpetrated
against three (3) or more persons individually or as a group. This
crime requires proof that the accused: (1) engaged in the
recruitment and placement of workers defined under Article 13
or in any of the prohibited activities under Article 34 of the Labor
Code; (2) does not have a license or authority to lawfully engage
in the recruitment and placement of workers; and (3) committed
the infraction against three or more persons, individually or as a
group. All these three essential elements are present in the case.
PEOPLE V FORTUNA
395 SCRA 354
The crime of illegal recruitment is committed when, among other
things, a person who, without being duly authorized according to
law, represents or gives the distinct impression that he or she has
the power or ability to provide work abroad convincing those
whom the representation is made to part with their money in
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Employees
PEOPLE V CORPUZ
412 SCRA 479
PEOPLE V SAGAYAGA
423 SCRA 468
The appellant is guilty of illegal recruitment as a principal by
direct participation, having dealt directly with the private
complainants.
The appellants bare denial of her involvement in the
management, administration, control and operation of APSC
cannot prevail over her judicial admissions, the positive
testimonies of the private complainants and the documentary
evidence adduced by the prosecution.
An employee of a company or corporation engaged in illegal
recruitment may be held liable as principal, together with his
employer, if it is shown that he actively and consciously
participated in illegal recruitment.
PEOPLE V GUTIERREZ
422 SCRA 32
Appellant cannot escape liability by claiming that she was not
aware that before working for her employer in the recruitment
agency, she should first be registered with the POEA. Illegal
recruitment in large scale is malum prohibitum, not malum in se.
Good faith is not a defense.
LATON
RA 8142, SEC. 2. DECLARATION OF POLICIES-"(a) In the pursuit of an independent foreign policy and
while considering national sovereignty, territorial integrity,
national interest and the right to self-determination
paramount in its relations with other states, the State
shall, at all times, uphold the dignity of its citizens whether
in country or overseas, in general, and Filipino migrant
workers, in particular, continuously monitor international
conventions, adopt/be signatory to and ratify those that
guarantee protection to our migrant workers, and
endeavor to enter into bilateral agreements with countries
hosting overseas Filipino workers."
(b) The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities
for all. Towards this end, the State shall provide adequate
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LATON
The rule lex loci contractus (the law of the place where the
contract is made) governs. Therefore, the Labor Code, its
implementing rules and regulations, and other laws affecting
labor, apply in this case
ART. 42. Submission of list. - Any employer employing nonresident foreign nationals on the effective date of this
Code shall submit a list of such nationals to the Secretary
of Labor within thirty (30) days after such date indicating
their names, citizenship, foreign and local addresses,
nature of employment and status of stay in the country.
The Secretary of Labor shall then determine if they are
entitled to an employment permit.
2.11 Pre-Termination
Section 3
ALIEN EMPLOYMENT
Statutory Reference: Art. 40-42; Revised Guidelines for
Issuances of Employment Permit - 1988
3.01 Coverage
Non-Resident Alien
LATON
RA 7916, SEC. 40. Percentage of Foreign Nationals. Employment of foreign nationals hired by ECOZONE
enterprises in a supervisory, technical or advisory capacity
shall not exceed five percent (5%) of Its workforce without
the express authorization of the Secretary of Labor and
Employment.
Section 4
EMPLOYMENTOF APPRENTICES, LEARNERS
AND HANDICAPPED WORKERS
Statutory Reference: Art. 57-81; Technical Education and Skills
Development Authority Act of 1994, R.A. No. 7796; Dual
Training Systems Act of 1994 (R.A. No. 7686); Magna Carta for
Disabled Persons (R.A. No. 7277)
4.01 Policy Objectives
LATON
for
capacity
and
aptitude
LATON
ART. 69. Responsibility for theoretical instruction. Supplementary theoretical instruction to apprentices in
cases where the program is undertaken in the plant may
be done by the employer. If the latter is not prepared to
assume the responsibility, the same may be delegated to
an appropriate government agency.
4.02 Apprentice
Defined
Apprenticeable Occupation
Qualification
ART. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of
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Allowed Employment
Costs
Enforcement
B. Learners
4.05 Learners
Defined
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Disabled Persons
Defined
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BERNARDO V NLRC
310 SCRA 186
Magna Carta for Disabled Persons mandates that a qualified
disabled employee should be given the same terms and
conditions of employment as a qualified able-bodied person.
Section 5 of the Magna Carta provides:
Sec. 5. Equal Opportunity for Employment. No disabled person
shall be denied access to opportunities for suitable employment.
A qualified disabled employee shall be subject to the same terms
and conditions of employment and the same compensation,
privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.
Since the Magna Carta accords them the rights of qualified ablebodied persons, they are thus covered by Article 280 of the Labor
Code
The noble objectives of Magna Carta for Disabled Persons are not
based merely on charity or accommodation, but on justice and
the equal treatment of qualified persons, disabled or not. The
Court believes, that, after showing their fitness for the work
assigned to them, they should be treated and granted the same
rights like any other regular employees.
Section 5
CONDITIONS OF EMPLOYMENT
HOURS OF WORK
Statutory Reference: Art. 82-90; Book III, Rules I, IA, II, Omnibus
Rules Implementing the Labor Code
LATON
5.02 Coverage
LATON
34
Rule IV Holidays with Pay. Section 1. Coverage - This rule shall apply to all
employees except: (e) Field personnel and other employees whose time and
performance is unsupervised by the employer xxx (Italics supplied)
35
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LATON
(Hours worked): ART. 84. Hours worked shall include (a) all
time during which an employee is required to be on duty
or to be at a prescribed workplace; and (b) all time during
which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall
be counted as hours worked.
Idle time
NATIONAL DEVELOPMENT CO V CIR
6 SCRA 763
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LATON
As stated in Sec 1 of Com. Act No. 444, The legal working day for
any person employed by another shall be of not more than 8
hours daily. When the work is not continuous, the time during
which the laborer is not working and can leave his working place
and can rest completely shall not be counted. It is clear from the
provision that idle time spent resting and during which an
employee may leave the workplace is not counted as working
time only where the work is broken or not continuous. In this
case, the CIR's finding that work in the NDC was continuous and
did not permit employees and laborers to rest completely is not
without basis in evidence and following the Courts earlier rulings,
these findings are not to be disturbed.
LUZON STEVEDORING CO V LUZON MARINE DEPARTMENT
UNION
101 Phil 257
There is no need to set a different criterion to be applied to the
seamen. A laborer doesnt need to leave the premises in order
that his period of rest shall not be counted, such that it is enough
that he ceases to work, may rest completely and leave his spot
where he actually has stays while working.36
Continuous Work
STATES MARINE CORP V CEBU SEAMEN'S ASSOC
7 SCRA 294
The provisions of sec. 1, of Comm. Act No. 444, states that "When
the work is not continuous, the time during which the laborer is
not working and can leave his working place and can rest
completely shall not be counted." Severino Pepito categorically
stated that he worked during the late hours of the evening and
during the early hours of the day when the boat docks and
unloads. Aside from the above, he did other jobs such as
removing rusts and cleaning the vessel, which overtime work
totalled to 6 hours a day, and of which he has not been paid as
yet. Sec. 1, of Comm. Act No. 444 finds no application in his case.
Waiting Time
ARICA V NLRC
170 SCRA 776
The Minister of Labor held: The thirty (30)-minute assembly time
long practiced and institutionalized by mutual consent of the
parties under Article IV, Section 3, of the Collective Bargaining
Agreement cannot be considered as waiting time within the
purview of Section 5, Rule I, Book III of the Rules and Regulations
Implementing the Labor Code.
Travel Time
RADA V NLRC
205 SCRA 69
It was the job of Rada to pick up and drop off employees of the
project at certain specified points along EDSA. Hence the time he
spent in doing this work should be included in determining the
number of hours he had worked. Rada is hence entitled to the
overtime pay claimed.(Note: Ordinarily, the travel time of
employees from house to place of work and vice versa is not
included as part of time worked. Time of work starts when the
employee reports at the place of workand ends when he leaves
the same place.)
CA 444 (Eight-Hour-Labor Law) Sec 1 is applied to contemporary
regulations issued by administrative authorities.
SEC. 1. The legal working day for any person employed by another shall be of
not more than eight hours daily. When the work is not continuous, the time
during which the laborer is not working AND CAN LEAVE HIS WORKING
PLACE and can rest completely, shall not be counted.
36
LATON
LATON
Built-In Compensation
ENGINEERING EQUIPMENT INC V MINISTER OF LABOR
138 SCRA 616
A written contract with a built-in overtime pay in the ten hour
workday and that their basic monthly pay was adjusted to reflect
the higher amount covering the guaranteed two-hour extra time
whether worked or unworked are valid
Proof of Work
LAGATIC V NLRC
285 SCRA 251
Entitlement to overtime pay must first be established by proof
that said overtime work was actually performed, before an
employee may avail of said benefit.
SOCIAL SECURITY SYSTEM V CA
348 SCRA 1
Applying the four-fold test, a preponderance of evidence exists in
support of the conclusion that Tana was an employee of Ayalde
VILLAR V NLRC
331 SCRA 686
As a general rule, one who pleads payment has the burden of
proving it. Even where the plaintiff must allege non-payment, the
general rule is that the burden rests on the defendant to prove
payment, rather than on the plaintiff to prove non-payment. The
debtor has the burden of showing with legal certainty that the
obligation has been discharged with payment.
The reason for the rule is that the pertinent personnel files,
payrolls, records, remittances and other similar documents
which will show that overtime, differentials, service incentive
leave and other claims of workers have been paid are not in the
possession of the worker but in the custody and absolute control
of the employer. Thus, in choosing not to present evidence to
prove that it had paid all the monetary claims of petitioners, HITECH failed once again to discharge the onus probandi.
Consequently, we have no choice but to award those claims to
petitioners.
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Employer Obligation
SOCIAL SECURITY SYSTEM V CA
348 SCRA 1
An employer is duty-bound to keep faithful and complete records
of her business affairs, not the least of which would be the
salaries of the workers. Ayalde has failed in this duty as the
documents she presented were selective, few and incomplete in
substance and content
Computation
Rationale Prohibition
5.07 Night Work
5.08 Holiday
Section 6
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CONDITIONS OF EMPLOYMENT
WEEKLY REST PERIOD
Statutory Reference: Art. 91-93; Book III, Rule III, Omnibus
Rules Implementing the Labor Code
6.01 Rationale
Rationale
MANILA ELECTRIC COMPANY
EMPLOYEES' ASSOCIATION
79 PHIL. 409
THE
PUBLIC
UTILITIES
6.02 Coverage
ART. 91. Right to weekly rest day. - (a) It shall be the duty
of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less
than twenty-four (24) consecutive hours after every six (6)
consecutive normal work days.
ART. 92. When employer may require work on a rest day. The employer may require his employees to work on any
day:
(a) In case of actual or impending emergencies caused by
serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity to prevent loss of
life and property, or imminent danger to public safety;
(b) In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid serious loss
which the employer would otherwise suffer;
(c) In the event of abnormal pressure of work due to
special circumstances, where the employer cannot
ordinarily be expected to resort to other measures;
(d) To prevent loss or damage to perishable goods;
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LATON
7.02 Holidays
EXECUTIVE ORDER NO. 203 June 30, 1987
PROVIDING A LIST OF REGULAR HOLIDAYS AND SPECIAL DAYS
TO BE OBSERVED THROUGHOUT THE PHILIPPINES AND FOR
OTHER PURPOSES
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LATON
(e) 'Id-ul-Adha (Hari Raja Haji), which falls on the tenth day of
the twelfth lunar month of Dhu 1-Hijja.
7.03 Holiday Pay
A. Regular Holidays
New Year's Day
-January 1
Maundy Thursday
-Movable Date
Good Friday
-Movable Date
Araw ng Kagitingan (Bataan & Corregidor Day)
-April 9
Labor Day
-May 1
Independence Day
-June 12
National Heroes Day
-Last Sunday
of August
Bonifacio Day
Christmas Day
Rizal Day
-November 30
-December 25
-December 30
-November 1
-December 31
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LATON
Divisor as Factor
TRANSASIA PHILS EMPLOYER ASSN V NLRC
320 SCRA 547
The Court notes that there is a need to adjust the divisor used by
Trans-Asia to 287 days, instead of only 286 days, in order to
properly account for the entirety of regular holidays and special
days in a year as prescribed by Executive Order No. 203 in relation
to Section 6 of the Rules Implementing Republic Act 6727.
Section 1 of Executive Order No. 203 provides:
SECTION 1. Unless otherwise modified by law, order or
proclamation, the following regular holidays and special days shall
be observed in the country:
A. Regular Holidays
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LATON
Proof of Payment
BUILDING CARE CORP V NLR
268 SCRA 666
If BCC had really paid Rodil his holiday pay, it could easily have
presented its payrolls, which constitute the best proof of
payment. To prove payment of salary differentials, it could have
presented proofs of such monetary benefitsbut it did not. It
failed to comply with the mandate of the law; as NLRC ruled, the
burden of proof in this regard lies with the employer, not the
employee.
Computation
Section 8
CONDITIONS OF EMPLOYMENT
LEAVES
Statutory Reference: Art. 95; Book III, Rule V, Omnibus Rules
A. Service Incentive Leave
8.01 Coverage
AGGA V NLRC
298 SCRA 285
Petitioners contend that the lumpsum mode of payment of
salaries is illegal, citing Articles 5 and 6 of the New Civil Code,
Articles 86, 87, 90, 93 and 94 of PD 442 and Book V, Rule II,
Section 2(a) of the 1991 POEA Rules.
As correctly observed by the respondents, none of the
aforementioned laws and rules prohibit the subject payment
scheme. The cited articles of the New Civil Code merely provide
that agreements in violation of law or public policy cannot be
entered into and have legal effect. The cited provisions of PD 442
simply declare that night shift differential and additional
remuneration for overtime, rest day, Sunday and holiday work
shall be computed on the basis of the employee's regular wage. In
like fashion, the 1991 POEA Rules merely require employers to
guarantee payment of wages and overtime pay. Thus, petitioners'
stance is bereft of any legal support.
Sunday
WELLINGTON INVESTMENT V TRAJANO
245 SCRA 561
There is no provision of law requiring any employer to make such
adjustments in the monthly salary rate set by him to take account
of legal holidays falling on Sundays in a given year, or, contrary to
the legal provisions bearing on the point, otherwise to reckon a
year at more than 365 days. What the law requires of employers
opting to pay by the month is to assure that "the monthly
minimum wage shall not be less than the statutory minimum
wage multiplied by 365 days divided by twelve," and to pay that
salary "for all days in the month whether worked or not," and
"irrespective of the number of working days therein." That salary
is due and payable regardless of the declaration of any special
holiday in the entire country or a particular place therein, or any
fortuitous cause precluding work on any particular day or days
(such as transportation strikes, riots, or typhoons or other natural
calamities), or cause not imputable to the worker. The legal
provisions governing monthly compensation are evidently
Coverage
MAKATI HABERDASHERY INC V NLRC
179 SCRA 449
While private respondents are entitled to Minimum Wage, COLA
and 13th Month Pay, they are not entitled to service incentive
leave pay because as piece-rate workers being paid at a fixed
amount for performing work irrespective of time consumed in the
performance thereof, they fall under one of the exceptions stated
in Section 1(d), Rule V, Implementing Regulations, Book III, Labor
Code.
Private respondents cannot also claim holiday pay under Section
1(e), Rule IV, Implementing Regulations, Book III, Labor Code.
LATON
B. Paternity Leave
REPUBLIC ACT NO. 8187
AN ACT GRANTING PATERNITY LEAVE OF SEVEN (7) DAYS
WITH FULL PAY TO ALL MARRIED MALE EMPLOYEES IN THE
PRIVATE AND PUBLIC SECTORS FOR THE FIRST FOUR (4)
DELIVERIES OF THE LEGITIMATE SPOUSE WITH WHOM HE IS
COHABITING AND FOR OTHER PURPOSES
[Paternity Leave Act of 1996]
SEC. 2. Notwithstanding any law, rules and regulations to the
contrary, every married male employee in the private and
public sectors shall be entitled to a paternity leave of seven (7)
days with full pay for the first four (4) deliveries of the
legitimate spouse with whom he is cohabiting. The male
employee applying for paternity leave shall notify his employer
of the pregnancy of his legitimate spouse and the expected
date of such delivery.
For purposes of this Act, delivery shall include childbirth or any
miscarriage.
C. Maternity Leave
REPUBLIC ACT NO. 8282
AN ACT FURTHER STRENGTHENING THE SOCIAL SECURITY
SYSTEM THEREBY AMENDING FOR THIS PURPOSE, REPUBLIC
ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE
SOCIAL SECURITY LAW.
[Maternity Leave Benefit]
SEC. 14-A. A female member who has paid at least three (3)
monthly contributions in the twelve-month period immediately
preceding the semester of her childbirth or miscarriage shall be
paid a daily maternity benefit equivalent to one hundred
percent (100%) of her average daily salary credit for sixty (60)
days or seventy-eight (78) days in case of caesarian delivery,
subject to the following conditions:
(a) That the employee shall have notified her employer of her
pregnancy and the probable date of her childbirth, which notice
shall be transmitted to the SSS in accordance with the rules and
regulations it may provide;
(b) The full payment shall be advanced by the employer within
thirty (30) days from the filing of the maternity leave
application;
58 | P
LATON
A. Wages - In General
(d) That the maternity benefits provided under this section shall
be
paid only for the first four (4) deliveries or miscarriages;
9.01 Coverage
Government Agency
PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY V NLRC
213 SCRA 621
Notwithstanding that the petitioner is a government agency, its
liabilities, which are joint and solidary with that of the contractor,
are provided in Articles 106, 107 and 109 of the Labor Code. This
places the petitioner's liabilities under the scope of the NLRC.
Moreover, Book Three, Title 11 on Wages specifically provides
that the term "employer" includes any person acting directly or
indirectly in the interest of an employer in relation to an
employee and shall include the Government and all its branches,
subdivisions and instrumentalities, all government-owned or
controlled corporations and institutions as well as non-profit
private institutions, or organizations (Art. 97 [b], Labor Code..)
9.02 Wage
Constitution, Art. II
Defined
CHAVEZ V NLRC
448 SCRA 478
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LATON
SCHOOL
ALLIANCE
OF
EDUCATORS
37
See APPENDIX
60 | P
LATON
LATON
13 Month Pay
AGABON V NATIONAL LABOR RELATIONS
442 SCRA 573
Intent of PD 851 is to grant an additional income in the form of
the 13th month pay to employees; included in the definition of
wages under Art. 97 (f); employer prohibited from making
deductions
B. Payment of Wages
Statutory Reference: Art. 102-104; Sec. 7, R.A. No. 6727
9.03 Form
Payroll Payment
PHILIPPINE GLOBAL COMMUNICATIONS INC V DE VERA
459 SCRA 260
CHAVEZ V. NLRC
448 SCRA 478
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LATON
Cash Wage
CONGSON V NLRC
243 SCRA 260
Congsons practice of paying the private respondents the
minimum wage by means of legal tender combined with tuna
liver and intestines runs counter to the above cited provision of
the Labor Code. The fact that said method of paying the minimum
wage was not only agreed upon by both parties in the
employment agreement but even expressly requested by private
respondents, does not shield petitioner. Article 102 of the Labor
Code is clear. Wages shall be paid only by means of legal tender.
The only instance when an employer is permitted to pay wages
informs other than legal tender, that is, by checks. or money
order, is when the circumstances prescribed in the second
paragraph of Article 102 are present.
Payroll Entries
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Wage Deduction
APODACA V NLRC
172 SCRA 442
Assuming that there had been a call for payment, the NLRC still
cannot validly set it off against the wages and other benefits due
petitioner.
Art. 113 of the Labor code allows such a deduction from the
wages of the employees by employer in only 3 instances: (a) In
cases where the worker is insured with his consent by the
employer, and the deduction is to recompense the employer for
the amount paid by him as premium on the insurance; (b) For
union dues, in cases where the right of the worker or his union to
checkoff has been recognized by the employer or authorized in
writing by the individual worker concerned; and (c) In cases
where the employer is authorized by law or regulations issued by
the Secretary of Labor.
Check-Off
LATON
9.10 Deposit
ART. 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to
withhold any amount from the wages of a worker or
induce him to give up any part of his wages by force,
stealth, intimidation, threat or by any other means
whatsoever without the workers consent.
Garnishment/ Attachment
SPECIAL STEEL PRODUCTS, INC. V VILLAREAL
The above provision is clear and needs no further elucidation.
Indeed, petitioner has no legal authority to withhold respondents
13th month pay and other benefits. What an employee has
worked for, his employer must pay. Thus, an employer cannot
simply refuse to pay the wages or benefits of its employee
because he has either defaulted in paying a loan guaranteed by
his employer; or violated their memorandum of agreement; or
failed to render an accounting of his employers property.
The petitioner has no legal right to withhold respondents 13th
month pay and other benefits to recompense for whatever
amount it paid as security for respondent Villareals car loan; and
for the expenses incurred by respondent So in his training abroad.
PACIFIC CUSTOMS BROKERAGE V INTER-ISLAND DOCKMEN AND
LABOR UNION AND CIR
89 PHIL 722
Art 1708 of new Civil Code provides, Laborers wages shall not be
subject to execution or attachment, except for debts incurred for
food, shelter, clothing, medical attendance.
Pacific Customs Brokerage doesnt dispute that money garnished
is intended to pay wages of members of labor union. There is
nothing to show that such money was garnished or attached for
debts incurred for food, shelter, clothing and medical attendance.
The writ of garnishment issued by the court, while it purports to
include all moneys and properties belonging to the employing
company, cannot, in any manner, touch or affect what said
company has in its possession to pay the wages of its laborers.
GAA V CA
140 SCRA 304
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LATON
Record Keeping
Service Charges
MARANAW HOTELS AND RESORT CORPORATION V NLRC
303 SCRA 540
As regards the share of Damalerio in the service charges collected
during the period of his preventive suspension, the same form
part of his earnings and his dismissal having been adjudged to be
illegal, he is entitled not only to full backwages but also to other
benefits, including a just share in the service charges, to be
computed from the start of his preventive suspension until his
reinstatement.
Tips
ACE NAVIGATION CO INC V CA
338 SCRA 380
The word tip has several meanings. It is more frequently used
to indicate additional compensation, and in this sense "tip" is
defined as meaning a gratuity; a gift; a present; a fee; money
given, as to a servant to secure better or more prompt service.
Tipping is done to get the attention and secure the immediate
services of a waiter, porter or others for their services. Since a tip
is considered a pure gift out of benevolence or friendship, it can
not be demanded from the customer. Whether or not tips will be
given is dependent on the will and generosity of the giver.
Although a customer may give a tip as a consideration for services
rendered, its value still depends on the giver. They are given in
addition to the compensation by the employer. A gratuity given
by an employer in order to inspire the employee to exert more
effort in his work is more appropriately called a bonus.
LATON
Wage Difference
JPL MARKETING PROMOTIONS V CA
463 SCRA 136
JPL cannot escape the payment of 13th month pay and service
incentive leave pay to private respondents. Said benefits are
mandated by law and should be given to employees as a matter
of right.
Admittedly, private respondents were not given their 13th month
pay and service incentive leave pay while they were under the
th
employ of JPL. Instead, JPL provided salaries which were over and
above the minimum wage.
The Court rules that the difference between the minimum wage
and the actual salary received by private respondents cannot be
deemed as their 13th month pay and service incentive leave pay
as such difference is not equivalent to or of the same import as
the said benefits contemplated by law. Thus, as properly held by
the Court of Appeals and by the NLRC, private respondents are
entitled to the 13th month pay and service incentive leave pay.
Househelpers
ULTRA VILLA FOOD HAUS V GENISTON
309 SCRA 17
Art 141 of the LC defines Domestic or household service as to
include services of family drivers.
The Revised Guidelines on the Implementation of the 13th Month
Pay Law excludes employers of household helpers from the
coverage of PD 851, thus:
2.. Exempted Employers
The following employers are still not covered by P.D. No. 851:
a. . . .;
b. Employers of household helpers . . .;
c. . . .;
d. . . .
The court also found that Geniston is not entitled to the other
benefits he was asking for because Art 82 (LC) excludes domestic
helpers from the mandatory grant of overtime pay, holiday pay,
premium pay and service incentive leave.
Government Employees
ALLIANCE OF GOVERNMENT WORKERS V MINISTER OF LABOR
124 SCRA 1
An analysis of the "whereases" of P.D. No. 851 shows that the
President had in mind only workers in private employment when
he issued the decree. There was no intention to cover persons
working in the government service.
Terminated Employees
ARCHILLES MANUFACTURING CORP V NLRC
244 SCRA 750
Paragraph 6 of the Revised Guidelines on the Implementation of
the 13th Month Pay Law (P. D. 851) provides that "an employee
who has resigned or whose services were terminated at any time
before the payment of the 13th month pay is entitled to this
monetary benefit in proportion to the length of time he worked
during the year, reckoned from the time he started working
during the calendar year up to the time of his resignation or
termination from the service . . . The payment of the 13th month
pay may be demanded by the employee upon the cessation of
employer-employee relationship. This is consistent with the
principle of equity that as the employer can require the employee
to clear himself of all liabilities and property accountability, so can
the employee demand the payment of all benefits due him upon
the termination of the relationship."
Furthermore, Sec. 4 of the original Implementing Rules of P.D.
851 mandates employers to pay their employees a 13th month
pay not later than the 24th of December every year provided that
they have worked for at least one (1) month during a calendar
year. In effect, this statutory benefit is automatically vested in
the employee who has at least worked for one month during the
calendar year. As correctly stated by the Solicitor General, such
benefit may not be lost or forfeited even in the event of the
employee's subsequent dismissal for cause without violating his
property rights.
See APPENDIX
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Substitute Payment
FRAMANLIS FARMS INC V MOLE
171 SCRA 87
LATON
14 Month Pay
KAMAYA PORT HOTEL V NLRC
177 SCRA 87
Art. 100 of the LC states: Prohibition against elimination or
diminution of benefits.- Nothing in this Book shall be construed to
eliminate or in any way diminish supplements, or other employee
benefits being enjoyed at the time of promulgation of this Code.
It is patently obvious that Article 100 is clearly without
applicability. The date of effectivity of the Labor Code is May 1,
1974. In the case at bar, petitioner extended its 14th month pay
beginning 1979 until 1981. What is demanded is payment of the
14th month pay for 1982. Indubitably from these facts alone,
Article 100 of the Labor Code cannot apply.
- Moreover, there is no law that mandates the payment of the
14th month pay. This is emphasized in the grant of exemption
under Presidential Decree 851 (13th Month Pay Law) which
states: "Employers already paying their employees a 13th month
pay or its equivalent are not covered by this Decree." Necessarily
then, only the 13th month pay is mandated. Having enjoyed the
additional income in the form of the 13th month pay, private
respondents' insistence on the 14th month pay for 1982 is
already an unwarranted expansion of the liberality of the law.
Verily, a 14th month pay is a misnomer because it is basically a
bonus and, therefore, gratuitous in nature. The granting of the
14th month pay is a management prerogative which cannot be
forced upon the employer. It is something given in addition to
what is ordinarily received by or strictly due the recipient. It is a
gratuity to which the recipient has no right to make a demand.
This Court is not prepared to compel petitioner to grant the 14th
month pay solely because it has allegedly ripened into a company
practice" as the labor arbiter has put it. Having lost its catering
business derived from Libyan students, Kamaya Hotel should not
be penalized for its previous liberality.
An employer may not be obliged to assume a "double burden" of
paying the 13th month pay in addition to bonuses or other
benefits aside from the employee's basic salaries or wages.
Restated differently, we rule that an employer may not be obliged
to assume the onerous burden of granting bonuses or other
benefits aside from the employee's basic salaries or wages in
addition to the required 13th month pay.
Diminution
DAVAO FRUITS CORPORATION V ASSOCIATED LABOR UNIONS
The "Supplementary Rules and Regulations Implementing P.D.
No. 851," which put to rest all doubts in the computation of the
thirteenth month pay, was issued by the Secretary of Labor as
early as January 16, 1976, barely one month after the effectivity
of P.D. No. 851 and its Implementing Rules. And yet, petitioner
computed and paid the thirteenth month pay, without excluding
Section 3. Employees covered The Decree shall apply to all employees
except to:
xxx
xxx
xxx
"The term 'its equivalent' as used in paragraph (c) hereof shall include
Christmas bonus, mid-year bonus, profit-sharing payments and other cash
bonuses amounting to not less than 1/12 of the basic salary but shall not
include cash and stock dividends, cost of living allowances and all other
allowances regularly enjoyed by the employee, as well as non-monetary
benefits.
"Where an employer pays less than 1/12 of the employee's basic salary the
employer shall pay the difference."
9.14 Bonus
Management Function
KIMBERLY ETC V. DIMAYUGA
600 SCRA 648
39
LATON
LATON
and efficient response during the calamities. Instead, a onemonth special bonus, We believe, is sufficient, this being merely a
generous act on the part of MERALCO.
PHILIPPINE APPLIANCE CORPORATION (PHILACOR) V CA
430 SCRA 525
A signing bonus may not be demanded as a matter of right if it is
not agreed upon by the parties or unilaterally offered as an
additional incentive. It is not a demandable and enforceable
obligation. The condition for awarding it must be duly satisfied.
2 things militate against the grant of the signing bonus: first, the
non-fulfillment of the condition for which it was offered, i.e., the
speedy and amicable conclusion of the CBA negotiations; and
second, the failure of respondent union to prove that the grant of
the said bonus is a long established tradition or a regular
practice on the part of petitioner. Petitioner admits, and
respondent union does not dispute, that it offered an early
conclusion bonus or an incentive for a swift finish to the CBA
negotiations.
A signing bonus is justified by and is the consideration paid for the
goodwill that existed in the negotiations that culminated in the
signing of a CBA. In the case at bar, the CBA negotiation between
petitioner and respondent union failed. Respondent union went
on strike for eleven days and blocked the ingress to and egress
from petitioners work plants. The labor dispute had to be
referred to the Secretary of Labor and Employment because
neither of the parties was willing to compromise their respective
positions regarding the four remaining items which stood
unresolved. While we do not fault any one party for the failure of
the negotiations, it is apparent that there was no more goodwill
between the parties and that the CBA was clearly not signed
through their mutual efforts alone. Hence, the payment of the
signing bonus is no longer justified and to order such payment
would be unfair and unreasonable for petitioner.
We have consistently ruled that although a bonus is not a
demandable and enforceable obligation, it may nevertheless be
granted on equitable considerations as when the giving of such
bonus has been the companys long and regular practice. To be
considered a regular practice, however, the giving of the bonus
should have been done over a long period of time, and must be
shown to have been consistent and deliberate. The test or
rationale of this rule on long practice requires an indubitable
showing that the employer agreed to continue giving the benefits
knowing fully well that said employees are not covered by the law
requiring payment thereof. Respondent does not contest the fact
that petitioner initially offered a signing bonus only during the
previous CBA negotiation. Previous to that, there is no evidence
on record that petitioner ever offered the same or that the
parties included a signing bonus among the items to be resolved
in the CBA negotiation. Hence, the giving of such bonus cannot be
deemed as an established practice considering that the same was
given only once.
40
Liabilities
40
See APPENDIX
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severally liable to the employees for their wages. This Court held
in Eagle Security, Inc. vs. NLRC and Spartan Security and Detective
Agency, Inc. vs. NLRC that the joint and several liability of the
contractor and the principal is mandated by the Labor Code to
assure compliance with the provisions therein including the
minimum wage. The contractor is made liable by virtue of his
status as direct employer. The principal, on the other hand, is
made the indirect employer of the contractor's employees to
secure payment of their wages should the contractor be unable
to pay them. Even in the absence of an employer-employee
relationship, the law itself establishes one between the principal
and the employees of the agency for a limited purpose i.e. in
order to ensure that the employees are paid the wages due them.
In the above-mentioned cases, the solidary liability of the
principal and contractor was held to apply to the aforementioned
Wage Order Nos. 5 and 6. In ruling that under the Wage Orders,
existing security guard services contracts are amended to allow
adjustment of the consideration in order to cover payment of
mandated increases, and that the principal is ultimately liable for
the said increases.
- It is clear that it is only when contractor pays the increases
mandated that it can claim an adjustment from the principal to
cover the increases payable to the security guards. The conclusion
that the right of the contractor (as principal debtor) to recover
from the principal as solidary co-debtor) arises only if he has paid
the amounts for which both of them are jointly and severally
liable is in line with Article 121741 of the Civil Code.
- The right of reimbursement from a co-debtor is recognized in
favor of the one who paid.
The liability of the petitioner to reimburse the respondent only
arises if and when respondent actually pays its employees the
increases granted by Wage Order Nos. 5 and 6. Payment, which
means not only the delivery of money but also the performance,
in any other manner, of the obligation,is the operative fact which
will entitle either of the solidary debtors to seek reimbursement
for the share which corresponds to each of the debtors.
- It is not disputed that the private respondent has not actually
paid the security guards the wage increases granted under the
Wage Orders in question. Neither is it alleged that there is an
extant claim for such wage adjustments from the security guards
concerned, whose services have already been terminated by the
contractor. Accordingly, private respondent has no cause of
action against petitioner to recover the wage increases. Needless
to stress, the increases in wages are intended for the benefit of
the laborers and the contractor may not assert a claim against the
principal for salary wage adjustments that it has not actually paid.
Otherwise, as correctly put by the respondent, the contractor
would be unduly enriching itself by recovering wage increases, for
its own benefit.
- Finally, considering that the private respondent has no cause of
action against the petitioner, private respondent is not entitled to
attorney's fees.
SENTINEL SECURITY AGENCY INC V NLRC
295 SCRA 123
The Client did not, as it could not, illegally dismiss the
complainants. Thus, it should not be held liable for separation pay
and back wages. But even if the Client is not responsible for the
illegal dismissal of the complainants, it is jointly and severally
liable with the Agency for the complainants service incentive
leave pay.
Art. 1217. Payment made by one of the solidary debtors extinguishes the
obligation. If two or more solidary debtors offer to pay, the creditor may
choose which offer to accept.
41
He who made payment may claim from his co-debtors only the share which
corresponds to each, with interest for the payment already made. If the
payment is made before the debt is due, no interest for the intervening period
may be demanded. . . .
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PHILIPPINE EXPORT V CA
251 SCRA 354
A final observation. On 21 March 1989, Article 110 of the Labor
Code was amended by Republic Act No. 6715 so as to read:
Art. 110. Worker preference in case of bankruptcy. In the event
of bankruptcy or liquidation of an employer's business, his
workers shall enjoy first preference as regards their wages and
other monetary claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary claims shall
be paid in full before claims of the Government and other
creditors may be paid.
In Development Bank of the Philippines vs. National Labor
Relations Commission (183 SCRA 328, 336-339), the Court has
said:
The amendment expands worker preference to cover not only
unpaid wages but also other monetary claims to which even
claims of the Government must be deemed subordinate.
xxx xxx xxx
Notably, the terms "declaration" of bankruptcy or "judicial"
liquidation have been eliminated. Does this mean then that
liquidation proceedings have been done away with?
We opine in the negative, upon the following considerations:
1. Because of its impact on the entire system of credit, Article 110
of the Labor Code cannot be viewed in isolation but must be read
in relation to the Civil Code scheme on classification and
preference of credits.
xxx xxx xxx
2. In the same way that the Civil Code provisions on classification
of credits and the Insolvency Law have been brought into
harmony, so also must the kindred provisions of the Labor Law be
made to harmonize with those laws.
3. In the event of insolvency, a principal objective should be to
effect an equitable distribution of the insolvent's property among
his creditors. To accomplish this there must first be some
proceeding where notice to all of the insolvent's creditors may be
given and where the claims of preferred creditors may be
bindingly adjudicated (De Barretto vs. Villanueva, No. L-14938,
December 29, 1962, 6 SCRA 928). The rationale therefore has
been expressed in the recent case of DBP vs. Secretary of Labor
(G.R. No. 79351, 28 November 1989), which we quote:
xxx xxx xxx
4. A distinction should be made between a preference of credit
and a lien. A preference applies only to claims which do not
attach to specific properties. A lien creates a charge on a
particular property. The right of first preference as regards unpaid
wages recognized by Article 110 does not constitute a lien on the
property of the insolvent debtor in favor of workers. It is but a
preference of credit in their favor, a preference in application. It is
a method adopted to determine and specify the order in which
credits should be paid in the final distribution of the proceeds of
the insolvent's assets. It is a right to a first preference in the
discharge of the funds of the judgment debtor.
xxx xxx xxx
6. Even if Article 110 and its implementing Rule, as amended,
should be interpreted to mean "absolute preference," the same
should be given only prospective effect in line with the cardinal
rule that laws shall have no retroactive effect, unless the contrary
is provided (Article 4, Civil Code). Thereby, any infringement on
the constitutional guarantee on non-impairment of the obligation
of contracts (Section 10, Article III, 1987 Constitution) is also
avoided. In point of fact, DBP's mortgage credit antedated by
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Receivership
RUBBERWORLD (PHILS), INC. V. NLRC
336 SCRA 433
Presidential Decree No. 902-A is clear that "all actions for claims
against corporations, partnerships or associations under
management or receivership pending before any court, tribunal,
board or body shall be suspended accordingly." The law did not
make any exception in favor of labor claims. The justification for
the automatic stay of all pending actions for claims is to enable
the management committee or the rehabilitation receiver to
effectively exercise its/his powers free from any judicial or extra
judicial interference that might unduly hinder or prevent the
'rescue' of the debtor company. To allow such other actions to
continue would only add to the burden of the management
committee or rehabilitation receiver, whose time, effort and
resources would be wasted in defending claims against the
corporation instead of being directed toward its restructuring and
rehabilitation. Thus, the labor case would defeat the purpose of
an automatic stay. To rule otherwise would open the floodgates
to numerous claims and would defeat the rescue efforts of the
management committee.
This finds ratiocination in that the power to hear and decide labor
Article 110. Worker preference in case of bankruptcy In the event of bankruptcy or liquidation of an
employer's business, his workers shall enjoy first preference as regards wages due them for services
rendered during the period prior to the bankruptcy or liquidation, any provision of law to the contrary
notwithstanding. Union paid wages shall be paid in full before other creditors may establish any claim to a
share in the assets of the employer. (emphasis supplied).
42
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F. Minimum Wages
Statutory Reference: Arts. 126-127; Book III, Rule IX, Omnibus
Rules; R.A. No. 6727
9.19 Wages and the Constitution
Minimum Wages
ATOK BIG WEDGE MINING CO INC V ATOK BIG WEDGE MUTUAL
BENEFIT ASSOCIATION
92 PHIL 755
The law guarantees the laborer a fair and just wage. The
minimum must be fair and just. The "minimum wage" can by no
means imply only the actual minimum. Some margin or leeway
must be provided, over and above the minimum, to take care of
contingencies, such as increase of prices of commodities and
increase in wants, and to provide means for a desirable
improvement in his mode of living.
Beneficiaries
PEOPLE V GATCHALIAN
104 PHIL 664
"The establishment of the maximum wage benefits directly the
low-paid employees, who now receive inadequate wages on
which to support themselves and their families. It benefits all
wage earners indirectly by setting a floor below which their
remuneration cannot fail. It raises the standards of competition
among employers, since it would protect the fair-minded
employer who voluntarily pays a wage that supports the wage
earner from the competition of the employer who operates at
lower cost by reasons of paying his workers a wage below
subsistence. If, in fact, the employer cannot pay a subsistence
wage then he should riot continue his operation unless he
improves his methods and equipment so as to make the payment
of the minimum wage feasible for him otherwise the ernployer is
wasting the toil of the worker and the material resources used in
the employment. Second methods of operation, progressive and
fair-minded Management, and an adequate minimum wage go
hand in hand."
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Functions
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ART. 124. Standards/Criteria for minimum wage fixing. The regional minimum wages to be established by the
Regional Board shall be as nearly adequate as is
economically feasible to maintain the minimum standards
of living necessary for the health, efficiency and general
well-being of the employees within the framework of the
national economic and social development program. In the
determination of such regional minimum wages, the
Regional Board shall, among other relevant factors,
consider the following:
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such appeal within sixty (60) calendar days from the filing
thereof.
The filing of the appeal does not stay the order unless the
person appealing such order shall file with the
Commission, an undertaking with a surety or sureties
satisfactory to the Commission for the payment to the
employees affected by the order of the corresponding
increase, in the event such order is affirmed. (As amended
by Republic Act No. 6727, June 9, 1989).
Piece Worker
Methods of Fixing
EMPLOYERS CONFEDERATION OF THE PHILIPPINES V NWPC
201 SCRA 759
RA 6727 was intended to rationalize wages, first, by providing for
full-time boards to police wages round-the-clock, and second, by
giving the boards enough powers to achieve this objective.
Congress meant the boards to be creative in resolving the annual
question of wages without labor and management knocking on
the legislature's door at every turn.
LAMBO V NLRC
317 SCRA 420
The relationship at bar passes the four-fold test. The mere fact
that they were employed on a per piece basis does not negate
their status as regular employees. Payment by the piece is just a
method of compensation and does not define the essence of the
relations. Nor does the fact that petitioners are not covered by
the SSS affect the employer-employee relationship
PULP AND PAPER INC V NLRC (ANTONIO)
279 SCRA 408
The Court does not think that the law intended to deregulate the
relation between labor and capital for several reasons: (1 ) The
Constitution calls upon the State to protect the rights of workers
and promote their welfare; (2) the Constitution also makes it a
duty of the State "to intervene when the common goal so
demands" in regulating property and property relations; (3) the
Charter urges Congress to give priority to the enactment of
measures, among other things, to diffuse the wealth of the nation
and to regulate the use of property; (4) the Charter recognizes
the "just share of labor in the fruits of production;" (5) under the
Labor Code, the State shall regulate the relations between labor
and management; (6) under Republic Act No. 6727 itself, the
State is interested in seeing that workers receive fair and
equitable wages; and (7) the Constitution is primarily a document
of social justice, and although it has recognized the importance of
the private sector, it has not embraced fully the concept of laissez
faire or otherwise, relied on pure market forces to govern the
economy; We can not give to the Act a meaning or intent that will
conflict with these basic principles.
Agency Authority
Requirements Validity
CAGAYAN SUGAR MILLING CO V SECRETARY
284 SCRA 150
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Wage Distortion
9.23Effect on Benefits
LATON
COMPANY
302 SCRA 74
Section 10
WOMEN WORKERS
Statutory Reference: Art. 130-138; Book III, Rule XII, Omnibus
Rules Implementing Labor Code; R.A. No. 7877; R.A. No. 8184;
and R.A. No. 8282
10.01 Women and the Constitution
Women Workers
PHIL TELEGRAPH AND TELEPHONE CO V NLRC
The petitioners policy of not accepting or considering as
disqualified from work any woman worker who contracts
marriage runs afoul of the test of, and the right against,
discrimination, afforded all women workers by our labor laws and
by no less than the Constitution. Contrary to petitioners
assertion, the record discloses clearly that her ties with the
company were dissolved principally because of the companys
policy that married women are not qualified for employment in
PT&T, and not merely because of her supposed acts of
dishonesty.
In Zialcita, et al. vs. Philippine Air Lines, a PAL policy 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 being violative of the clear mandate in Article
136 of the Labor Code with regard to discrimination against
married women. In Gualberto, et al. vs. Marinduque Mining &
Industrial Corporation, the Court of Appeals considered a policy of
the same nature, as repugnant to the Civil Code, Presidential
Decree No. 148 and the Constitution and therefore void and
unlawful.
10.02 Coverage
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Marriage
SECTION 6. Agricultural work. No woman, regardless of
age, shall be permitted or suffered to work, with or
without compensation, in any agricultural undertaking at
night time unless she is given a rest period of not less than
nine (9) consecutive hours, subject to the provisions of
Section 5 of this Rule.
General
(a) In cases of actual or impending emergencies caused by
serious accident, fire, flood, typhoon, earthquake,
epidemic or other disasters or calamity, to prevent loss of
life or property, or in cases of force majeure or imminent
danger to public safety;
(b) In case of urgent work to be performed on
machineries, equipment or installation, to avoid serious
loss which the employer would otherwise suffer;
(c) Where the work is necessary to prevent serious loss of
perishable goods;
(d) Where the woman employee holds a responsible
position of managerial or technical nature, or where the
woman employee has been engaged to provide health and
welfare services;
(e) Where the nature of the work requires the manual skill
and dexterity of women workers and the same cannot be
performed with equal efficiency by male workers;
(f) Where the women employees are immediate members
of the family operating the establishment or undertaking;
and
(g) Under other analogous cases exempted by the
Secretary of Labor and Employment in appropriate
regulations.
10.04 Facilities
Discrimination
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Policy
Duty Employer
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Section 11
MINORS
Statutory Reference: Art. 138-140; R.A. No. 7610 as amended
by R.A. No. 7658, Special Protection of Children Against Child
Abuse, etc. R.A. No. 7610 (1991) as amended by R.A. No, 7658
(1993)
11.01 Minors and the Constitution
Remedies
ARTICLE II, 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 shall inculcate in the youth patriotism
and nationalism, and encourage their involvement in
public and civic affairs.
11,02 Law
Art. VII, Working Children, R.A. No. 7610 as amended by R.A.
No, 7658
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11.03 Discrimination
Section 12
HOUSEHELPERS
Statutory Reference: Art. 141-152; Book III, Rule XIII, Omnibus
Rules; Civil Code of the Philippines, R.A. No. 386 as amended;
and Minimum Wage of Househelpers, R.A. No. 7655
(2) Six hundred fifty pesos (P650.00) a month for those in other
chartered cities and first class municipalities; and
12.02 Househelpers
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Article
146. Opportunity
for
Education.
If
the househelper is under the age of eighteen (18) years,
the employer shall give him or her an opportunity for at
least elementary education. The cost of education shall be
part of the househelpers compensation, unless there is a
stipulation to the contrary.
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Section 13
HOMEWORKERS
13.02 Employer
Statutory Reference: Arts. XIII, Sec. 3, Constitution; Arts. 282286; 277(b); Book VI, Rule I, Secs. 1-8, Omnibus Rules
GENERAL CONCEPTS
14.01 Security of Tenure
A. Nature of Security of Tenure
SONZA V ABS-CBN BROADCASTING CORP
[See Digests List Page 42]
QUIJANO V BARTOLABAC
480 SCRA 204
B. Importance of Employment
Employment
GONZALES V NLRC
313 SCRA 169
Employment is not merely a contractual relationship; it has
assumed the nature of property right. It may spell the difference
whether or not a family will have food on their table, roof over
their heads and education for their children. It is for this reason
that the State has taken up measures to protect employees from
unjustified dismissals. It is also because of this that the right to
security of tenure is not only a statutory right but, more so, a
constitutional right.
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D. Coverage
Contract Employee
LABAJO V ALEJANDRO
165 SCRA 747
As probationary and contractual employees, private respondents
enjoyed security of tenure, but only to a limited extent i.e., they
remained secure in their employment during the period of time
their respective contracts of employment remained in effect. As
petitioners were not under obligation to renew those contracts of
employment, the separation of private respondents in this case
cannot be said to have been without justifiable cause, much less
illegal.
Probationary Employee
SKILLWORD MANAGEMENT AND MARKETING CORPORATION V
NLRC
186 SCRA 465
There is no dispute that as a probationary employee, Manuel had
but a limited tenure. Although on probationary basis, however,
he still enjoys the constitutional protection on security of tenure.
During his tenure of employment therefore, or before his
contract expires, he cannot be removed except for cause as
provided for by law.
Dismissal as Penalty
Managerial Employee
V.
ASSN
OF
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C. Resignation
Definition
HABANA V NLRC
298 SCRA 537
Voluntary resignation is the voluntary act of an employee who
finds himself in a situation where he believes that personal
reasons cannot be sacrificed in favor of the exigency of the
service and he has no other choice but to disassociate himself
from his employment.
Requisites
AZCOR MANUFACTURING V NLRC (CAPULSO)
303 SCRA 26
- On resignation, requisites
Ratio To constitute a resignation, it must be unconditional and
with the intent to operate as such. There must be an intention to
relinquish a portion of the term of office accompanied by an act
of relinquishment.
METRO TRANSIT ORG V NLRC (GARCIA)
284 SCRA 308
An examination of the circumstances surrounding the submission
of the letter indicates that the resignation was made without
proper discernment so that it could not have been intelligently
and voluntarily done.
Voluntary Resignation
14.02 Causes
A. Just Causes
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ART. 286. When employment not deemed terminated. The bona-fide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months, or
the fulfillment by the employee of a military or civic duty
shall not terminate employment. In all such cases, the
employer shall reinstate the employee to his former
position without loss of seniority rights if he indicates his
desire to resume his work not later than one (1) month
from the resumption of operations of his employer or
from his relief from the military or civic duty.
Effectivity
Validity of Policy
MANILA BROADCASTING COMPANY V NLRC (OLAIREZ, BANGLOY)
294 SCRA 486
Ratio Although 11(b) of R.A. No. 6646 does not require mass
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hope for a decent life for him and his loved ones.
- In the present case, the penalty of dismissal appears in our view
unjustified, much too harsh and quite disproportionate to the
alleged infractions. Not only were the alleged violations minor in
nature, in this case the evidence adduced to prove them did not
fairly show they fall exactly within the rules and regulations
allegedly violated. Otherwise stated, the evidence did not square
fully with the charges. That is why the Labor Arbiter found only
analogous causes which, in our view do not sufficiently justify
the extreme penalty of termination.
- The penalty imposed on the erring employee ought to be
proportionate to the offense, taking into account its nature and
surrounding circumstances. In the application of labor laws, the
courts and other agencies of the government are guided by the
social justice mandate in our fundamental law.
- To be lawful, the cause for termination must be a serious and
grave malfeasance to justify the deprivation of a means of
livelihood. This is merely in keeping with the spirit of our
Constitution and laws which lean over backwards in favor of the
working class, and mandate that every doubt must be resolved in
their favor.
the power of this Court not only to scrutinize the basis for
dismissal but also to determine if the penalty is commensurate to
the offense, notwithstanding the company rules.
Penalties
Requirements
AGABON V NLRC
[See Digests List Page 35]
PLDT V TOLENTINO
438 SCRA 555
- However, the right of the management to dismiss must be
balanced against the managerial employees right to security of
tenure which is not one of the guaranties he gives up. This Court
has consistently ruled that managerial employees enjoy security
of tenure and, although the standards for their dismissal are less
stringent, the loss of trust and confidence must be substantial
and founded on clearly established facts sufficient to warrant the
managerial employees separation from the company. Substantial
evidence is of critical importance and the burden rests on the
employer to prove it. Due to its subjective nature, it can easily be
concocted by an abusive employer and used as a subterfuge for
causes which are improper, illegal or unjustified.
PEREZ V MEDICAL CITY GENERAL HOSPITAL
484 SCRA 138
- The power to dismiss an employee is a recognized prerogative
that is inherent in the employers right to freely manage and
regulate his business. An employer cannot be expected to retain
an employee whose lack of morals, respect and loyalty to his
employer or regard for his employers rules and appreciation of
the dignity and responsibility of his office has so plainly and
completely been bared. An employer may not be compelled to
continue to employ a person whose continuance in service will
patently be inimical to his interest. The dismissal of an employee,
in a way, is a measure of self-protection.
- Nevertheless, whatever acknowledged right the employer has to
discipline his employee, it is still subject to reasonable regulation
by the State in the exercise of its police power. Thus, it is within
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- The New Rules of Procedure of the NLRC provides the rule for
the service of notices and resolutions in NLRC cases, to wit:
Sec. 4. Service of notices and resolutions. a) Notices or
summons and copies of orders, resolutions or decisions shall be
served on the parties to the case personally by the bailiff or the
duly authorized public officer within three (3) days from receipt
thereof by registered mail; Provided, that where a party is
represented by counsel or authorized representative, service shall
be made on such counsel or authorized representative;
As such, the proceedings before it are not bound by the technical
niceties of the law and procedure and the rules obtaining in
courts of law, as dictated by Article 221 of the Labor Code:
ART. 221. Technical rules not binding and prior resort to amicable
settlement. In any proceeding before the Commission or any of
the Labor Arbiters, the rules of evidence prevailing in courts of
law or equity shall not be controlling and it is the spirit and
intention of this Code that the Commission and its members and
the Labor Arbiters shall use every and all reasonable means to
ascertain the facts in each case speedily and objectively and
without regard to technicalities of law or procedure, all in the
interest of due process. This rule applies equally to both the
employee and the employer. In the interest of due process, the
Labor Code directs labor officials to use all reasonable means to
ascertain the facts speedily and objectively, with little regard to
technicalities or formalities. What is essential is that every
litigant is given reasonable opportunity to appear and defend his
right, introduce witnesses and relevant evidence in his favor,
which undoubtedly, was done in this case. Willful disobedience,
or insubordination as otherwise branded in this case, as a just
cause for dismissal of an employee, necessitates the concurrence
of at least two requisites: (1) the employee's assailed conduct
must have been willful, that is, characterized by a wrongful and
perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee and must
pertain to the duties which he had been engaged to discharge.
Company policies and regulations are generally valid and binding
on the parties and must be complied with until finally revised or
amended, unilaterally or preferably through negotiation, by
competent authority. For misconduct or improper behavior to be
a just cause for dismissal, the same must be related to the
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VALIAO V CA
[See Digests List Page 11]
VILLAMOR GOLF CLUB V PEHID
472 SCRA 36
Serious misconduct as a valid cause for the dismissal of an
employee is defined as improper or wrong conduct; the
transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment. To be
serious within the meaning and intendment of the law, the
misconduct must be of such grave and aggravated character and
not merely trivial or unimportant. However serious such
misconduct, it must be in connection with the employees work to
constitute just cause for his separation. The act complained of
must be related to the performance of the employees duties
such as would show him to be unfit to continue working for the
employer
LAKPUE V BELGA
473 SCRA 617
- We have defined misconduct as a transgression of some
established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful
Willful Disoedience
MICRO SALES OPERATION NETWORK V NLRC
472 SCRA 328
- For willful disobedience to be a valid cause for dismissal, the
following twin elements must concur: (1) the employee's assailed
conduct must have been willful, that is, characterized by a
wrongful and perverse attitude; and (2) the order violated must
have been reasonable, lawful, made known to the employee and
must pertain to the duties which he had been engaged to
discharge.
BASCON V CA (METRO CEBU COMMUNITY HOSPITAL)
422 SCRA 122
Willful disobedience of the employers lawful orders, as a just
cause for dismissal of an employee, envisages the concurrence of
at least two requisites: (1) the employee's assailed conduct must
have been willful, that is, characterized by a wrongful and
perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee and must
pertain to the duties which he had been engaged to discharge
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CHAVEZ V NLRC
[See Digests List Page 59]
CHALLENGE SOCKS CORP V CA (NLRC, ANTONIO ET AL)
474 SCRA 356
- One of the just causes for terminating an employment under
Article 282 of the Labor Code is gross and habitual neglect by the
employee of her duties. This cause includes gross inefficiency,
negligence and carelessness. Such just causes is derived from the
right of the employer to select and engage his employees.
- Habitual neglect implies repeated failure to perform ones duties
for a period of time. Buguats repeated acts of absences without
leave and her frequent tardiness reflect her indifferent attitude to
and lack of motivation in her work. Her repeated and habitual
infractions, committed despite several warnings, constitute gross
misconduct. Habitual absenteeism without leave constitute gross
negligence and is sufficient to justify termination of an employee.
- An employees past misconduct and present behavior must be
taken together in determining the proper imposable penalty. The
totality of infractions or the number of violations committed
during the period of employment shall be considered in
determining the penalty to be imposed upon an erring employee.
The offenses committed by him should not be taken singly and
separately but in their totality. Fitness for continued employment
cannot be compartmentalized into tight little cubicles of aspects
of character, conduct, and ability separate and independent of
each other.
- It is the totality, not the compartmentalization, of such company
infractions that Buguat had consistently committed which
justified her dismissal.
- Terminating an employment is one of petitioners prerogatives.
- Management has the prerogative to discipline its employees and
to impose appropriate penalties on erring workers pursuant to
company rules and regulations.
- The Court has upheld a companys management prerogatives so
long as they are
CITIBANK NA V GATCHALIAN
240 SCRA 212
- Gross negligence implies a want or absence of or failure to
exercise slight care or diligence, or the entire absence of care. It
evinces a thoughtless disregard of consequences without exerting
any effort to avoid them.
Gross negligence implies a want or absence of or failure to
exercise slight care or diligence or the entire absence of care. It
evinces a thoughtless disregard of consequences without exerting
any effort to avoid them.
CHUA V NLRC (SCHERING-PLOUGH CORP ET AL)
453 SCRA 244
- Gross negligence under Article 282 of the Labor Code, as
amended, connotes want of care in the performance of ones
duties, while habitual neglect implies repeated failure to perform
ones duties for a period of time, depending upon the
circumstances. Clearly, the petitioners repeated failure to submit
the DCRs on time, as well as the failure to submit the doctors call
cards constitute habitual neglect of duties. Needless to state, the
foregoing clearly indicates that the employer had a just cause in
terminating the petitioners employment.
GENUINO ICE CO INC V MAGPANTAY
[See Digests List Page 206]
PREMIER DEVT BANK V MANTAL
[See Digests List Page 210]
Simple Negligence
PAGUIO TRANSPORT CORP V NLRC (MELCHOR)
294 SCRA 657
Employer has the burden of proving that the dismissal of an
employee is for a just cause. The failure of the employer to
discharge this burden means that the dismissal is not justified and
that the employee is entitled to reinstatement and backwages.
- Mere involvement in an accident, absent any showing of fault or
recklessness on the part of an employee, is not a valid ground for
dismissal.
The twin requirements of notice and hearing are essential
elements of due process. The employer must furnish the worker
two written notices: (1) one to apprise him of the particular acts
or omissions for which his dismissal is sought and (2) the other to
inform him of his employer's decision to dismiss him. The essence
97 | P
LATON
- It has oft been held that loss of confidence should not be used
as a subterfuge for causes which are illegal, improper and
unjustified. It must be genuine, not a mere afterthought to justify
an earlier action taken in bad faith. Be it remembered that at
stake here are the sole means of livelihood, the name and the
reputation of the employee. Thus, petitioner must prove an
actual breach of duty founded on clearly established facts
sufficient to warrant his loss of employment.
LATON
Guidelines
VITARICH CORP V NLRC (RECODO)
307 SCRA 509
- While an employer is allowed wide latitude to dismiss
employees on loss of trust and confidence, still the loss thereof
must have some basis and must be proved by the employer
otherwise the social justice policy of the labor lawsand the
constitution will be for naught. The guidelines for the application
of the doctrine of loss of confidence are:
a. loss of confidence should not be simulated
b. it dhould not be used as subterfuge for causes which
are improper, illegal, or unjustified
c. it should not be arbitrarily asserted in the face of overwhelming
evidence to the contrary
d. it must be genuine, not a mere afterthought to justify
earlier action taken in bad faith
COCA-COLA BOTTLERS PHIL INC V KAPISANAN NG MALAYANG
MANGGAGAWA SA COCA-COLA
[See Digests List Page 209]
Willful Breach
ATLAS CONSOLIDATED MINING & DEVELOPMENT CORP V NLRC
(VILLACENCIO)
290 SCRA 479
Settled is the rule that under Article 283(c) of the Labor Code, the
breach of trust must be willful. A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse,
as distinguished from an act done carelessly, thoughtlessly,
heedlessly or inadvertently. It must rest on substantial grounds
and not on the employer's arbitrariness, whims, caprices or
suspicion; otherwise, the employee would eternally remain at the
mercy of the employer. It should be genuine and not simulated;
nor should it appear as a mere afterthought to justify earlier
action taken in bad faith or a subterfuge for causes which are
improper, illegal or unjustified. It has never been intended to
afford an occasion for abuse because of its subjective nature.
Private respondent explained that he failed to inspect the
logbook for about two (2) months before its disappearance
because he was preoccupied with some emergency works
brought about by a storm. With the foregoing explanation, it
cannot be said that Villavicencios failure was willful.
Coverage
FUJITSU COMPUTER PRODUCTS CORP V CA
[See Digests List Page 204]
Proof
Lack of Damage
CADIZ V CA (PHILIPPINE COMMERCIAL BANK [EQUITABLE
PCIBANK])
474 SCRA 232
99 | P
LATON
D. Commission of Crime
E. Analogous Causes
Quarrelsome - Bossy
CATHEDRAL SCHOOL OF TECHNOLOGY V NLRC (VALLEJERA)
214 SCRA 551
PETITIONERS' averments on VALLEJERAs disagreeable character
as "quarrelsome, bossy, unreasonable and very difficult to deal
with," are supported by testimonies of several co-employees and
students of CST. I
The conduct she exhibited on that occasion smacks of sheer
disrespect and defiance of authority and assumes the proportion
of serious misconduct or insubordination, any of which
constitutes just cause for dismissal from employment.
HEAVYLIFT MANILA INC V CA (GALAY, NLRC)
473 SCRA 541
An employee who cannot get along with his co-employees is
detrimental to the company for he can upset and strain the
working environment. Without the necessary teamwork and
synergy, the organization cannot function well.
Thus,
management has the prerogative to take the necessary action to
correct the situation and protect its organization. When personal
differences between employees and management affect the work
environment, the peace of the company is affected. Thus, an
employees attitude problem is a valid ground for his termination.
It is a situation analogous to loss of trust and confidence that
must be duly proved by the employer. Similarly, compliance with
the twin requirement of notice and hearing must also be proven
by the employer.
Probable Cause
STANDARD ELECTRIC MANUFACTURING CORP V STANDARD
ELECTRIC EMPLOYEES UNION
- A non-existent cause for dismissal was explained in Pepito v.
Secretary of Labor (96 SCRA 454):
... A distinction, however, should be made between a dismissal
100 | P
LATON
Defined
abandonment.
CHAVEZ V NLRC
[See Digests List Page 59]
Requisites
2. Absenteeism
HDA. DAPDAP V NLRC (BARRIENTOS JR)
285 SCRA 9
- Nor could intent to abandon be presumed from private
respondent's subsequent employment with another employer as
petitioner alleges.
- It has been said that abandonment of position cannot be lightly
inferred, much less legally presumed from certain equivocal acts
such as an interim employment.
Inference
Specific Acts
PREMIERE DEVT BANK V NLRC (LABANDA)
293 SCRA 49
- The law, however, does not enumerate what specific overt acts
can be considered as strong evidence of the intention to sever the
employee-employer relationship. An employee who merely took
steps to protest her indefinite suspension and to subsequently file
an action for damages, cannot be said to have abandoned her
work nor is it indicative of an intention to sever the employeremployee relationship. Her failure to report for work was due to
her indefinite suspension. Petitioner's allegation of abandonment
is further belied by the fact that Labanda filed a complaint for
illegal dismissal. Abandonment of work is inconsistent with the
filing of said complaint.
2.1 Loans
Borrowing Money
MEDICAL DOCTORS INC V NLRC (MAGLAYA, ELOA)
136 SCRA 1
Borrowing money is neither dishonest, nor immoral nor illegal,
much less criminal.
PEARL S. BUCK FOUNDATION V NLRC
182 SCRA 446
101 | P
LATON
- As held by this Court, if the contract is for a fixed term and the
employee is dismissed without just cause, he is entitled to the
payment of his salaries corresponding to the unexpired portion of
the employment contract
Absences
MANILA ELECTRIC CO V NLRC
[See Digests List Page 186]
GSP MANUFACTURING CORP V CABANBAN
495 SCRA 123
- Abandonment as a just ground for dismissal requires the
deliberate, unjustified refusal of the employee to perform his
employment responsibilities. Mere absence or failure to work,
even after notice to return, is not tantamount to abandonment.
The records are bereft of proof that petitioners even furnished
respondent such notice.
- Furthermore, it is a settled doctrine that the filing of a complaint
for illegal dismissal is inconsistent with abandonment of
employment. An employee who takes steps to protest his
dismissal cannot logically be said to have abandoned his work.
The filing of such complaint is proof enough of his desire to return
to work, thus negating any suggestion of abandonment.
Immorality
ROMARES V NLRC
294 SCRA 411
LATON
Love
CHUA-QUA V CLAVE
189 SCRA 117
To constitute immorality, the circumstances of each particular
case must be holistically considered and evaluated in the light of
prevailing norms of conduct and the applicable law.
DUNCAN ASSOCIATION V GLAXO-WELLCOME
[See Digests List Page 43]
Guilt or Innocence
CHUA V NLRC
218 SCRA 545
- Private respondent's guilt or innocence in the criminal case is
not determinative of the existence of a just or authorized cause
for his dismissal. This doctrine follows from the principle that the
quantum and weight of evidence necessary to sustain conviction
in criminal cases are quite different from the quantum of
evidence necessary for affirmance of a decision of the Labor
Arbiter and of the NLRC.
2.10 Moonlighting
AGABON V NLRC
[See Digests List Page 35]
2.11 Suspicion
EASTERN TELECOMMUNICATIONS PHILS INC V DIAMSE
491 SCRA 239
LOSS OF TRUST AND CONFIDENCE v. SUSPICION
- To be a valid cause for dismissal, the loss of trust and confidence
must be based on a willful breach and founded on clearly
established facts. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly,
heedlessly or inadvertently. Loss of trust and confidence must
rest on substantial grounds and not on the employer's
arbitrariness, whims, caprices or suspicion, otherwise, the
employee would eternally remain at the mercy of the employer.
Suspicion has never been a valid ground for dismissal and the
employee's fate cannot, in justice, be hinged upon conjectures
and surmises.
Effect of Acquittal
RAMOS V NLRC
298 SCRA 225
- Similarly, it is a well established rule that the dismissal of the
criminal case against an employee shall not necessarily be a bar
to his dismissal from employment on the ground of loss of trust
and confidence.
Conviction
SAMPAGUITA GARMENTS CORP V NLRC (SANTOS)
233 SCRA 260
- Once judgment has become final and executory, it can no longer
be disturbed except only for correction of clerical errors or where
supervening events render its execution impossible or unjust.
LATON
dismissal.
- Case law recognizes the employer's right to transfer or assign
employees from one area of operation to another, or one office
to another or in pursuit of its legitimate business interest,
provided there is no demotion in rank or diminution of salary,
benefits and other privileges and not motivated by discrimination
or made in bad faith, or effected as a form of punishment or
demotion without sufficient cause. This matter is a prerogative
inherent in the employer's right to effectively control and manage
the enterprise.
WESTIN PHIL PLAZA HOTEL V NLRC (RODRIGUEZ)
306 SCRA 631
- It must be emphasized that this Court has recognized and
upheld the prerogative of management to transfer an employee
from one office to another within the business establishment,
provided that there is no demotion in rank or a diminution of his
salary, benefits and other privileges.
- This is a privilege inherent in the employer's right to control and
manage its enterprise effectively.
- Besides, it is the employer's prerogative, based on its
assessment and perception of its employee's qualifications,
aptitudes and competence, to move him around in the various
areas of its business operations in order to ascertain where the
employee will function with utmost efficiency and maximum
productivity or benefit to the company.
- An employee's right to security of tenure does not give him such
a vested right in his position as would deprive the company of its
prerogative to change his assignment or transfer him where he
will be most useful.
CASTILLO V NLRC (PCIB)
308 SCRA 326
The Court, as a rule, will not interfere with an employers
prerogative to regulate all aspects of employment which includes
among others, work assignment, working methods, and place and
manner of work. It is the prerogative of the employer to transfer
and reassign employees for valid reasons and according to the
requirement of its business, provided that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee, and
that there is no demotion in rank or a diminution of his salary,
benefits and other privileges. An employees right to security of
tenure does not give him such a vested right in his position as
would deprive the company of its prerogative to change his
assignment or transfer him where he will be most useful.
- Constructive dismissal: The employer has the burden of proving
that the transfer and demotion of an employee are for valid and
legitimate grounds. Where the employer fails to overcome this
burden of proof, the employees demotion shall no doubt be
tantamount to unlawful constructive dismissal.
OSS SECURITY & ALLIED SERVICES INC V NLRC (LEGASPI)
325 SCRA 157
Service-oriented enterprises, such as petitioner's business of
providing security services, generally adhere to the business
adage that "the customer or client is always right". To satisfy the
interests, conform to the needs, and cater to the whims and
wishes of its clients, along with its zeal to gain substantial returns
on its investments, employers adopt means designed towards
these ends. These are called management prerogatives in which
the free will of management to conduct its own affairs to achieve
its purpose, takes from. Accordingly, an employer can regulate,
generally without restraint, according to its own discretion and
judgment, every aspect of business.
- In the employment of personnel, the employer can prescribe
the hiring, work assignments, working methods, time, place and
manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of
employees, work supervision, lay-off of workers and the
LATON
Abolition of Position
BENGUET ELECTRIC COOPERATIVE V FIANZA
425 SCRA 41
Dishonesty
NAGUIT V NLRC (MANILA ELECTRIC)
408 SCRA 617
- Petitioner thus committed dishonesty and breached MERALCOs
trust, which dishonesty calls for reprimand to dismissal under
MERALCOs rules.
- Dismissal is, however, too severe as a penalty in petitioners
case, given his 32 years of service during which he had no
derogatory record.
Constructive Discharge
Defined
Preventive Suspension
LATON
VALIAO V CA
[See Digests List Page 11]
Rationale
KWIKWAY ENGG WORKS V NLRC (VARGAS)
195 SCRA 526
Preventive Suspension
- Further, the preventive suspension of respondent Vargas for an
indefinite period amounted to a dismissal and is violative of
Section 4, Rule XIV of the Implementing Rules of the Labor Code
which limits the preventive suspension to thirty (30) days. The
said rule also provides that "the employer shall thereafter
reinstate the worker in his former or in a substantially equivalent
position or the employer may extend the period of suspension
provided that during the period of extension, he pays the wages
and other benefits due to the worker." (Pacific Cement Company
Inc. v. NLRC
GATBONTON V NLRC (MIT, CALDERON)
479 SCRA 416
Preventive suspension is a disciplinary measure for the protection
of the companys property pending investigation of any alleged
malfeasance or misfeasance committed by the employee. The
employer may place the worker concerned under preventive
suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his
co-workers. However, when it is determined that there is no
sufficient basis to justify an employees preventive suspension,
the latter is entitled to the payment of salaries during the time of
preventive suspension.
Number of Offenses
CADIZ V CA
[See Digests List Page 224]
MARICALUM MINING CORP V DECORION
487 SCRA 182
- Sections 8 and 9 of Rule XXIII, Book V of the Implementing Rules
provide:
Section 8. Preventive suspension. The employer may place the
worker concerned under preventive suspension if his continued
employment poses a serious and imminent threat to the life or
property of the employer or his co-workers.
Section 9. Period of Suspension No preventive suspension
shall last longer than thirty (30) days. The employer shall
thereafter reinstate the worker in his former or in a substantially
equivalent position or the employer may extend the period of
suspension provided that during the period of extension, he pays
the wages and other benefits due to the worker. In such case, the
worker shall not be bound to reimburse the amount paid to him
during the extension if the employer decides, after completion of
the hearing, to dismiss the worker.
- Preventive suspension is justified where the employee's
continued employment poses a serious and imminent threat to
the life or property of the employer or of the employee's coworkers. Without this kind of threat, preventive suspension is not
proper.
- Article 286 of the Labor Code, which provides that the bona fide
suspension of the operation of a business or undertaking for a
period not exceeding six (6) months shall not terminate
employment, may not be applied in this case. The instant case
involves the preventive suspension of an employee not by reason
of the suspension of the business operations of the employer but
because of the employee's failure to attend a meeting. The
LATON
Business Judgment
WILTSHIRE FILE CO INC V NLRC
193 SCRA 665
Redundancy, for purposes of our Labor Code, exists where the
services of an employee are in excess of what is reasonably
demanded by the actual requirements of the enterprise.
Succinctly put, a position is redundant where it is superfluous,
and superfluity of a position or positions may be the outcome of a
number of factors, such as overhiring of workers, decreased
volume of business, or dropping of a particular product line or
107 | P
LATON
Financial Loss
ESCAREAL V NLRC (PHILIPPINE REFINING CO INC)
213 SCRA 472
- Wiltshire File Co., Inc. vs. NLRC: Redundancy, for purposes of the
Labor Code, exists where the services of an employee are in
excess of what is reasonably demanded by the actual
requirements of the enterprise; a position is redundant when it is
superfluous, and superfluity of a position or positions may be the
outcome of a number of factors, such as 257the overhiring of
workers, a decreased volume of business or the dropping of a
particular product line or service activity previously manufactured
When Redundancy
LATON
-Thus, the requisites for valid retrenchment are the following: (1)
necessity of the retrenchment to prevent losses, and proof of
such losses; (2) written notice to the employees and to the
Department of Labor and Employment (DOLE) at least one month
prior to the intended date of retrenchment; and (3) payment of
separation pay equivalent to one-month pay or at least one-half
month pay for every year of service, whichever is higher.
As this Court has held, before any reduction of personnel
becomes legal, any claim of actual or potential business losses
must satisfy established standards as follows: (1) the losses
incurred are substantial and not de minimis; (2) the losses are
actual or reasonably imminent; (3) the retrenchment is
reasonably necessary and is likely to be effective in preventing
the expected losses; and (4) the alleged losses, if already incurred,
or the expected imminent losses sought to be forestalled are
proven by sufficient and convincing evidence. The employer has
the burden of proving that the losses are serious, actual and real.
- The Court had previously ruled that financial statements audited
by independent external auditors constituted the normal method
of proof of the profit-and-loss performance of a company.
LOPEZ SUGAR CORP V FRANCO
[See Digests List Page 150]
Procedure - Requirement
ASIAN ALCOHOL CORP V NLRC
[See Digests List Page 264]
Hearing
Venue of Complaint
WILTSHIRE FILE CO INC V NLRC
[See Digests List Page 257]
LATON
Coverage
PHILIPPINE TUBERCULOSIS SOCIETY INC V NLRC
294 SCRA 567
- Clearly (under the Labor Code), retrenchment or reduction of
the workforce in cases of financial difficulties is recognized as a
ground for the termination of employment.
- Although petitioner is a non-stock and non-profit organization,
retrenchment as a measure adopted to stave off threats to its
existence is available to it.
- Firstly, the losses expected should be substantial and not merely
de minimis in extent. If the loss purportedly sought to be
forestalled by retrenchment is clearly shown to be insubstantial
and inconsequential in character, the bonafide nature of the
retrenchment would appear to be seriously in question.
Secondly, the substantial loss apprehended must be reasonably
imminent, as such imminence can be perceived objectively and in
good faith by the employer. There should, in other words, be a
certain degree of urgency for the retrenchment, which is after all
a drastic recourse with serious consequences for the livelihood of
the employees retired or otherwise laid-off. Because of the
consequential nature of retrenchment, it must, thirdly, be
reasonably necessary and likely to effectively prevent the
expected losses. The employer should have taken other measures
prior or parallel to retrenchment to forestall losses, i.e., cut other
costs than labor costs. An employer who, for instance, lays off
substantial numbers of workers while continuing to dispense fat
executive bonuses and perquisites or so-called golden
parachutes, can scarcely claim to be retrenching in good faith to
avoid losses. To impart operational meaning to the constitutional
Procedure
MAYON HOTEL & RESTAURANT V ADANA
458 SCRA 609
- Serious business losses do not excuse the employer from
complying with the clearance or report required under Article 283
of the Labor Code and its implementing rules before terminating
the employment of its workers. In the absence of justifying
circumstances, the failure of petitioners to observe the
procedural requirements set out under Article 284, taints their
actuations with bad faith, especially since they claimed that they
have been experiencing losses in the three years before 1997.
-Even assuming that the closure was due to a reason beyond the
control of the employer, it still has to accord its employees some
110 | P
LATON
Temporary Retrenchment
SEBUGERO V NLRC (GTI SPORTSWEAR)
248 SCRA 532
- Redundancy exists where the services of an employee are in
excess of what is reasonably demanded by the actual
requirements of the enterprise.
- Retrenchment on the other hand, is used interchangeably with
the term "lay-off." It is the termination of employment initiated
by the employer through no fault of the employee's and without
prejudice to the latter, resorted to by management during
periods of business recession, industrial depression, or seasonal
fluctuations, or during lulls
Requirements - Standards
LOPEZ SUGAR CORP V FED OF FREE WORKERS PHILIPPINE LABOR
UNION ASSOCIATION (PLUA-NACUSIP)
189 SCRA 179
- The general standards in terms of which the acts of petitioner
employer must be appraised:
1) the losses expected should be substantial and not merely de
minimis in extent. If the loss purportedly sought to be forestalled
by retrenchment is clearly shown to be insubstantial and
inconsequential in character, the bona fide nature of the
retrenchment would appear to be seriously in question.
2) The substantial loss apprehended must be reasonably
imminent, as such imminence can be perceived objectively and in
good faith by the employer. There should, in other words, be a
certain degree of urgency for the retrenchment, which is after all
a drastic recourse with serious consequences for the livelihood of
the employees retired or otherwise laid-off.
3) Because of the consequential nature of retrenchment, it must
be reasonably necessary and likely to effectively prevent the
expected losses. The employer should have taken other measures
prior or parallel to retrenchment to forestall losses, i.e., cut other
costs than labor costs. To impart operational meaning to the
constitutional policy of providing "full protection" to labor, the
employer's prerogative to bring down labor costs by retrenching
must be exercised essentially as a measure of last resort, after
less drastic means e.g., reduction of both management and
rank-and-file bonuses and salaries, going on reduced time,
improving manufacturing efficiencies, trimming of marketing and
advertising costs, etc. have been tried and found wanting.
4) If already realized, and the expected imminent losses sought to
be forestalled, must be proved by sufficient and convincing
evidence. The reason for requiring this quantum of proof is
readily apparent: any less exacting standard of proof would
render too easy the abuse of this ground for termination of
services of employees.
-Garcia v. National Labor Relations Commissions:
. . . But it is essentially required that the alleged losses in business
operations must be prove[n] (NAFLU vs. Ople, [1986]). Otherwise,
said ground for termination would be susceptible to abuse by
scheming employers who might be merely feigning business
losses or reverses in their business ventures in order to ease out
employees.
EMCO PLYWOOD CORP V ABELGAS
[See Digests List Page 14]
Nature of Loss
LOPEZ SUGAR CORP V FEDERATION OF FREE WORKERS
[See Digests List Page 150]
EDGE APPAREL INC V NLRC
[See Digests List Page 262]
BOGO-MEDELLIN SUGARCANE PLANTERS ASSN V NLRC (ALU,
111 | P
LATON
MONTILLA)
296 SCRA 108
- In a number of cases, the Court has laid down the following
requisites of a valid retrenchment: (1) the losses incurred are
substantial and not de minimis; (2) the losses are actual or
reasonably imminent; (3) the retrenchment is reasonably
necessary and is likely to be effective in preventing the expected
losses; and (d) the alleged losses, if already incurred, or the
expected imminent losses sought to be forestalled, are proven by
sufficient and convincing evidence. In the present case,
petitioners miserably failed to prove (1) substantial losses and (2)
the reasonable necessity of the retrenchment.
No Sufficient and Substantial
Evidence of Business Loss
- To justify retrenchment, the employer must prove serious
business losses. Indeed, not all business losses suffered by the
employer would justify retrenchment under this article. The Court
has held that the "'loss' referred to in Article 283 cannot be just
any kind or amount of loss; otherwise, a company could easily
feign excuses to suit its whims and prejudices or to rid itself of
unwanted employees."
CAMA V JONIS FOOD SERVICES
425 SCRA 259
- The Constitution, while affording full protection to labor,
nonetheless, recognizes the right of enterprises to reasonable
returns on investments, and to expansion and growth.
- In line with this protection afforded to business by the
fundamental law, Article 283 of the Labor Code clearly makes a
policy distinction. It is only in instances of retrenchment to
prevent losses and in cases of closures or cessation of operations
of establishment or undertaking not due to serious business
losses or financial reverses that employees whose employment
has been terminated as a result are entitled to separation pay.
- In other words, Article 283 of the Labor Code does not obligate
an employer to pay separation benefits when the closure is due
to serious losses. To require an employer to be generous when it
is no longer in a position to do so, in our view, would be unduly
oppressive, unjust, and unfair to the employer.
PHILIPPINE CARPET V STO. TOMAS
[See Digests List Page 272]
Sliding Income
SAN MIGUEL JEEPENEY SERVICE V NLRC
265 SCRA 35
What the law speaks of is serious business losses or financial
reverses. Clearly, sliding incomes (decreasing gross revenues) are
not necessarily losses, much less serious business losses within
the meaning of the law.
- Requisites of a valid retrenchment: (a) the losses expected
should be substantial and not merely de minimis in extent; (b) the
substantial losses apprehended must be reasonably imminent; (c)
the retrenchment must be reasonably necessary and likely to
effectively prevent the expected losses; and (d) the alleged losses,
if already incurred, and the expected imminent losses sought to
be forestalled, must be proved by sufficient and convincing
evidence.
Proof of Loss
LOPEZ SUGAR CORP V FEDERATION OF FREE WORKERS
[See Digests List Page 270]
BOGO-MEDELLIN SUGAR CANE PLANTERS ASSN INC V NLRC
[See Digests List Page 273]
MITSUBISHI MOTORS V CHRYSLER
[See Digests List Page 102]
LATON
451 SCRA 70
To be valid, three requisites must concur, as provided in Article
283 of the Labor Code, as amended, namely: (1) The
retrenchment is necessary to prevent losses and the same is
proven; (2) Written notice to the employees and to the DOLE at
least one month prior to the intended date thereof; and (3)
Payment of separation pay equivalent to one month pay or at
least month pay for every year of service, whichever is higher.
When Effected
LOPEZ SUGAR CORP V FEDERATION OF FREE WORKERS
[See Digests List Page 270]
CAJUCOM V TPI
SEBUGERO V NLRC
[See Digests List Page 270]
EMCO PLYWOOD CORP V ABELGAS
[See Digests List Page 14]
INDUSTRIAL TIMBER CORP V ABABON
480 SCRA
- In sum, under Art 283 LC, three requirements are necessary for a
valid cessation of business operations: (a) service of a written
notice to the employees and to the DOLE at least one month
before the intended date thereof; (b) the cessation of business
must be bona fide in character; and (c) payment to the employees
of termination pay amounting to one month pay or at least onehalf month pay for every year of service, whichever is higher.
Re-Hiring Effect
ATLANTIC GULF AND PACIFIC CO V NLRC (GAMBOA, TUASON)
307 SCRA 714
- Petitioners contend that the redundancy program was actually
a union-busting scheme of management, aimed at removing
union officers who had declared a strike. This contention cannot
stand in the face of evidence of substantial losses suffered by the
company. Moreover, while it is true that the company rehired or
reemployed some of the dismissed workers, it has been shown
that such action was made only as company projects became
available and that this was done in pursuance of the companys
policy of giving preference to its former workers in the hiring of
project employees. The rehiring or reemployment does not
negate the imminence to (sic) losses, which prompted private
respondent to retrench.
Liability
CAPITOL MEDICAL CENTER V MERIS
470 SCRA 236
The right to close the operation of an establishment or
undertaking is explicitly recognized under the Labor Code as one
of the authorized causes in terminating employment of workers,
the only limitation being that the closure must not be for the
purpose of circumventing the provisions on termination of
employment embodied in the Labor Code. The phrase closures
or cessation of operations of establishment or undertaking
includes a partial or total closure or cessation. And the phrase
closures or cessation x x x not due to serious business losses or
financial reverses recognizes the right of the employer to close
or cease his business operations or undertaking even if he is not
suffering from serious business losses or financial reverses, as
long as he pays his employees their termination pay in the
amount corresponding to their length of service.
- As long as the companys exercise of the same is in good faith to
advance its interest and not for the purpose of defeating or
circumventing the rights of employees under the law or a valid
agreement, such exercise will be upheld.
- The ultimate test of the validity of closure or cessation of
establishment or undertaking is that it must be bona fide in
113 | P
LATON
Right
Requisite
Basis
SAN PEDRO HOSPITAL OF DIGOS INC V SEC OF LABOR
263 SCRA 98
Temporary suspension of operations is a valid exercise of
management prerogative provided it is not carried out in order to
circumvent the provisions of the Labor Code or to defeat the
rights of the employees under the Code. The determination to
suspend operations is a management prerogative that the State
usually does not interfere with, as no business can be required to
continue operating at a loss simply to maintain the workers in
employment. To require such continued operation would be
tantamount to a taking of property without due process, which
the employer has a right to resist. But where it is shown that the
closure is motivated not by a desire to prevent further losses, but
to discourage the workers from organizing themselves into a
union for more effective negotiation with management, the State
is bound to intervene.
- The burden of proving that such a temporary suspension is bona
fide falls upon the employer. In this instance, the HOSPITAL had
to establish the fact of its precarious financial health; that its
cessation of operation was really necessitated by its financial
condition; and that said condition would probably be improved by
such suspension.
- Art. 286 of the Code provides that "bona fide suspension for a
period not exceeding 6 months . . . shall not terminate
employment." Sec.12, Rule 1, Book VI of the Omnibus Rules
114 | P
LATON
creates an action in personam and does not create any real right
which should be respected by third parties. This conclusion draws
its force from the right of an employer to select his employees
and to decide when to engage them as protected under our
Constitution, and the same can only be restricted by law through
the exercise of the police power.
1. Requirements
In General
AGABON V NLRC
[See Digests List Page 35]
F. Floating Status
Right to Counsel
Disease
Notice
SY V CA
[See Digests List Page 276]
LATON
his responsibility for the act he was accused of. Even though
petitioner in this case never admitted the accusations of
dishonesty against him, he impliedly acknowledged his
insubordination as shown in his petition.
CAURDANETAAN PIECE WORKERS UNION V LAGUESMA
285 SCRA 291
- It is to be borne in mind that proceedings before labor agencies
merely require the parties to submit their respective affidavits
and position papers. Adversarial trial is addressed to the sound
discretion of the labor arbiter. To establish a cause of action, only
substantial evidence is necessary; i.e., such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion, even if other minds equally reasonable might
conceivably opine otherwise.
- As ruled in Manalo vs. Roldan-Confesor:
"Clear and convincing proof is '. . . more than mere
preponderance, but not to extent of such certainty as is required
beyond reasonable doubt as in criminal cases . . .'while
substantial evidence '. . . consists of more than a mere scintilla of
evidence but may be somewhat less than a preponderance . . .'
Consequently, in the hierarchy of evidentiary values, We find
proof beyond reasonable doubt at the highest level, followed by
clear and convincing evidence, preponderance of evidence, and
substantial evidence, in that order."
- It must be stressed that labor laws mandate the speedy
administration of justice, with least attention to technicalities but
without sacrificing the fundamental requisites of due process. In
this light, the NLRC, like the labor arbiter, is authorized to decide
cases based on the position papers and other documents
submitted, without resorting to the technical rules of evidence.
Verily, Respondent NLRC noted several documentary evidence
sufficient to arrive at a just decision. Indeed, the evidence on
record clearly supports the conclusion of the labor arbiter that
the petitioners were employees of respondent, and that they
were illegally dismissed.
NATIONAL SEMICONDUCTOR (HK) DISTRIBUTION, LTD V NLRC
(SANTOS)
291 SCRA 348
.
- The essence of due process is simply an opportunity to be heard,
or as applied to administrative proceedings, an opportunity to
explain ones side.
In Agabon v. NLRC, we said that if the dismissal was for cause, the
lack of statutory due process should not nullify the dismissal, or
render it illegal or ineffectual. But the violation of the petitioners
right to statutory due process by respondents warrants the
payment of indemnity in the form of nominal damage.
Hearing
MAGOS V NLRC
300 SCRA 484
- Both the NLC and the Labor Arbiter found that no formal hearing
was conducted regarding petitioner's dismissal. Although a
hearing is essential to due process, we did hold that no formal
hearing was necessary when the petitioner had already admitted
116 | P
LATON
Position Paper
SHOPPES MANILA INC V NLRC (CAYUCA & TORNO)
419 SCRA 354
The holding of a formal hearing or trial is discretionary with the
labor arbiter and is something that the parties cannot demand as
a matter of right.
- The requirements of due process are satisfied when the parties
are given the opportunity to submit position papers wherein they
are supposed to attach all the documents that would prove their
claim in case it be decided that no hearing should be conducted
or was necessary.
- Pursuant to Section 5, Rule V of the New Rules of Procedure of
the NLRC, the labor arbiter has the authority to determine
whether or not there is a necessity to conduct formal hearings in
cases brought before him for adjudication.
- It is entirely within the authority of the labor arbiter to decide a
labor case before him, based on the position papers and
supporting documents of the parties, without a trial or formal
hearing.
Burden
Trial-type hearings are not required in labor cases and these may
be decided on verified position papers, with supporting
documents and their affidavits. It is not necessary for the affiants
to appear and testify and be cross-examined by the counsel for
the adverse party.
Cross Examination
INC
Degree
CENTRAL PANGASINAN ELEC COOP INC V MACARAEG
[See Digests List Page 195]
SALVADOR V PHIL MINING SERVICE CORP
[See Digests List Page 195]
Prescription Period
NAGKAKAISANG
AZCOR MANUFACTURING INC V NLRC
117 | P
LATON
Offer to Reinstate
RANARA V NLRC
212 SCRA 631
- On Offer to Reinstate: The fact that his employer later made an
offer to re-employ him did not cure the vice of his earlier arbitrary
dismissal. The wrong had been committed and the harm done.
Notably, it was only after the complaint had been filed that it
occurred to Chang, in belated gesture of good will, to invite
Ranara back to work in his store. Chang's sincerity is suspect. We
doubt if his offer would have been made if Ranara had not
complained against him. At any rate, sincere or not, the offer of
reinstatement could not correct the earlier illegal dismissal of the
petitioner.
PHESCHEM V MOLDEZ
458 SCRA 339
- The legal consequences of an illegal dismissal are reinstatement
of the employee without loss of seniority rights and other
privileges, and payment of his full backwages, inclusive of
allowances, and other benefits or their monetary equivalent. The
law intended reinstatement to be the general rule. It is only when
reinstatement is no longer feasible that payment of separation
pay is awarded to an illegally dismissed employee
- Payment of separation pay as a substitute for reinstatement is
allowed only under exceptional circumstances, (1) when reasons
exist which are not attributable to the fault or beyond the control
of the employer, such as, when the employer, who is in severe
financial strait and has suffered serious business losses, has
ceased operations, implemented retrenchment, or abolished the
position due to the installation of labor-saving devices; (2) when
the illegally dismissed employee has contracted a disease and his
reinstatement will endanger the safety of his co-employees; or,
(3) where strained relationship exists between the employer and
the dismissed employee
14.08 Reinstatement
NUEVA ECIJA ELECTRIC CORP V NLRC
[See Digests List Page 229]
LAKPUE DRUG INC V BELGA
[See Digests List Page 208]
GREAT SOUTHERN MARITIME SERVICES CORP V ACUNA
425 SCRA 422
- As the Court eloquently stated in the case of Aguam vs. Court of
Appeals It is a far better and more prudent course of action for
the court to excuse a technical lapse and afford the parties a
review of the case on appeal to attain the ends of justice rather
than dispose of the case on technicality and cause a grave
injustice to the parties, giving a false impression of speedy
disposal of cases while actually resulting in more delay, if not a
miscarriage of justice.
CABATULAN V BUAT
451 SCRA 234
Where an ironhanded application of the rules will result in an
Defined
UNION OF SUPERVISORS V SEC OF LABOR
128 SCRA 442
- In its generally accepted sense, reinstatement is a restoration to
a state from which one has been removed or separated. It is the
return to the position from which he was removed (San Miguel
Brewery, Inc. v. Santos and CIR, 112 Phil. 986) and assuming again
the functions of the office already held (Abeto v. Rodas, 82 Phil.
67).
- Reinstatement pre-supposes that the previous position from
which one had been removed still exists, or that there is an
unfilled position more or less of a similar nature as the one
previously occupied by the employee.
And, Section 4, Rule 1, Book VI of the implementing Rules and
Regulations of the Labor Code states, to wit:
"An employee who is separated from work without just cause
should be reinstated to his former position, unless such position
no longer exists, at the time of his reinstatement, in which case
118 | P
LATON
Employee Right
QUIJANO V MERCURY DRUG
292 SCRA 109
The doctrine of "strained relations" should be strictly applied so
as not to deprive an illegally dismissed employee of his right to
reinstatement. Every labor dispute almost always results in
"strained relations", and the phrase cannot be given an
overarching interpretation, otherwise, an unjustly dismissed
employee can never be reinstated.
- An illegally dismissed employee is entitled to reinstatement as a
matter of right. Where reinstatement is not feasible, expedient or
practical, as where reinstatement would only exacerbate the
tension and strained relations between the parties, or where the
relationship between the employer and employee has been
unduly strained by reason of their irreconcilable differences,
particularly where the illegally dismissed employee held a
managerial or key position in the company, it would be more
prudent to order payment of separation pay instead of
reinstatement. Unscrupulous employers, however, have taken
advantage of the overgrowth of this doctrine of "strained
relations" by using it as a cover to get rid of its employees and
thus defeat their right to job security. - Mercury Drugs charges of
misbehavior against Quijano cannot serve as basis to justify his
dismissal, let alone his non-reinstatement. These charges had
been found to be baseless and both the labor arbiter and the
NLRC agreed that there was no just cause for petitioner's
dismissal. It can even be granted in arguendo that a certain
antagonism may characterize the relationship of petitioner and
the respondents. However, the antagonism was caused
substantially if not solely by the misdeeds of respondent's
superiors. The arbiter found as a fact that the false charges were
filed against Quijano by two of his superiors to punish him for
exposing their usurious loan operations. Hence, to deny his
reinstatement due to the "strained relations" with his accusers
whose charges were found to be false would result in rewarding
the accusers and penalizing the victim. This would set a bad
precedent for no employer should be allowed to profit from his
own misdeed. In addition, it is most inequitable to rule that the
antagonism engendered by Quijanos performance of his legal
right to expose the usurious lending operations of some
warehouse officers will cause him to lose the security of his job.
The expose is work related and is intended to protect the
economic welfare of employees, and hence its exercise cannot be
visited by any punishment especially by the supreme penalty of
separation from service. Again, it bears emphasis that the State
guarantees a worker security of tenure which can well be his
most precious economic right. Thus, all efforts must be exerted to
protect him from unjust deprivation of his job.
- The alleged antagonism is a mere conclusion bereft of
- Under the Labor Code, only the absence of a just cause for the
termination of employment can make the dismissal of an
employee illegal.
Art. 279. Security of Tenure. In cases of regular employment,
the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his
actual reinstatement.
- Thus, only if the termination of employment is not for any of the
causes provided by law is it illegal and, therefore, the employee
should be reinstated and paid backwages.
- On the other hand, if it is shown that the employee was
dismissed for any of the just causes mentioned in said Art. 282,
then, in accordance with that article, he should not be reinstated.
However, he must be paid backwages from the time his
employment was terminated until it is determined that the
termination of employment is for a just cause because the failure
to hear him before he is dismissed renders the termination of his
employment without legal effect. .
LATON
Rules on Reinstatement
Rationale
Exceptions
Business Conditions
UNION OF SUPERVISORS V SEC OF LABOR
[See Digests List Page]
ESPEJO V NLRC (COOP INSURANCE SYSTEM OF THE PHILS)
255 SCRA 430
- The law recognizes as valid any retirement plan, agreement or
management policy regarding retirement at an earlier or older
age.
Sec. 13, Book IV, of the Omnibus Rules Implementing the Labor
Code provides that in the absence of a retirement plan,
agreement or policy an employee may be retired upon reaching
the age of sixty (60) years. Construing this provision, an employee
may retire, or may be retired by his employer, upon reaching sixty
(60). Thus, an employee held to be illegally dismissed cannot be
reinstated if he had already reached the age of sixty (60) years at
the time of his complaint. NLRC therefore did not err in denying
the reinstatement of petitioner.
Strained Relations
PEARL S. BUCK FOUNDATION INC V NLRC
[See Digests List Page 235]
COMMERCIAL MOTORS CORP V NLRC (UMLAS)
192 SCRA 191
- It would seem, however, that the circumstances of this case
render inapproriate Umlas' reinstatement to his former position,
as an item of relief. A more equitable disposition is that which this
Court has more than once made in other cases of the same
nature: the award, in lieu of reinstatement, of separation pay at
the rate of one month's salary for every year of service, "so that .
. . (the employee) can be spared the agony of having to work
anew with . . . (the employer) under an atmosphere of antipathy
and antagonism, and the . . . (latter) does not have to endure the
continued service of . . . (the former) in whom it has lost
confidence."
SENTINEL SECURITY AGENCY INC V NLRC
[See Digests List Page 140]
SIBAL V NOTRE DAME OF GREATER MANILA
182 SCRA 538
- Moreover, it should be emphasized, that no strained relations
should arise from a valid and legal act of asserting ones right,
such as in the instant case, for otherwise, an employee who shall
assert his/ her right could be easily separated from the service by
120 | P
LATON
LATON
14.09 Backwages
Definition
EQUITABLE BANKING CORP V SADAC
[See Digests List Page 149]
ST. THERESAS SCHOOL OF NOVALICHES FOUNDATION V NLRC
(ESTHER REYES)
289 SCRA 110
The term backwages has been defined as that for earnings lost
by a worker due to his illegal dismissal. Backwages are generally
granted on grounds of equity. Payment thereof is a form of relief
that restores the income lost by reason of such unlawful
dismissal. It is not private compensation or damages, but is
Nature - Purpose
CLAUDIO V CA (NATIVIDAD)
423 SCRA 122
- The payment of backwages is generally granted on the ground of
equity. It is a form of relief that restores the income that was lost
by reason of the unlawful dismissal; the grant thereof is intended
to restore the earnings that would have accrued to the dismissed
employee during the period of dismissal until it is determined
that the termination of employment is for a just cause. It is not
private compensation or damages but is awarded in furtherance
and effectuation of the public objective of the Labor Code. Nor is
it a redress of a private right but rather in the nature of a
command to the employer to make public reparation for
dismissing an employee either due to the formers unlawful act or
bad faith.
LATON
Period - Compensation
ITOGON-SUYOC MINES INC V
SAGILOITOGON WORKERS UNION
24 SCRA 873
First. To be deducted from the back wages accruing to each of the
laborers to be reinstated is the total amount of earnings obtained
by him from other employment(s) from the date of dismissal to
the date of reinstatement. Should the laborer decide that it is
preferable not to return to work, the deduction should be made
up to the time judgment becomes final. And these, for the reason
that employees should not be permitted to enrich themselves at
the expense of their employer.
Second. Likewise, in mitigation of the damages that the dismissed
respondents are entitled to, account should be taken of whether
in the exercise of due diligence respondents might have obtained
income from suitable remunerative employment. We are
prompted to give out this last reminder because it is really unjust
that a discharged employee should, with folded arms, remain
inactive in the expectation that a windfall would come to him. A
contrary view would breed idleness; it is conducive to lack of
initiative on the part of a laborer. Both bear the stamp of
undesirability.
**note: the real issue in this case is really WON there was unfair
labor practice. The SC found that there was, and just affirmed the
judgment of the CIR. The topic of determination of back wages
was just obiter, with neither party raising such issue. The court
just wanted to say it.
FEATI UNIVERSITY FACULTY CLUB V FEATI UNIVERSITY
85 SCRA 395
Apply the ruling in Mercury Drug Co. V CIR
onable level
without qualification or deduction so as to avoid protracted delay
in the execution of the award due to extended hearings and
unavoidable delays and difficulties encountered in determining
the earnings of the laid off employees ordered to be reinstated
with backwages during the pendency of the case for purposes of
deducting the same from the gross backwages awarded.
their earnings during their lay off and the employees from
submitting counter proofs and obviates win evil s of idleness on
the part of the employee who would with folded arms remain
inactive in the that a windfall would come to him and attrition
and protracted delay in satisfying such award on the part of the
unscrupulous employers who have seized upon the further
proceedings which would practically render nugatory such award
and compel the employees to agree to unconscionable
settlements of backwages in order to satisfy their dire needs.
MERCURY DRUG CO INC V CIR (DAYAO)
56 SCRA 694
- As stated, the shortest prescriptive period for the filing of all
other actions for which the statute of limitations does not fix a
period, is four years. The period of delay in instituting this ULP
charge with claim for reinstatement and back wages, although
within the prescriptive period, should be deducted from the
liability of MERCURY to DAYAO for backwages. In order that the
employee, however, should be relieved from proving his income
during the period he was out of the service and the employer
from submitting counter-proofs, which may delay the execution
LATON
Effect Inflation
LANTION V NLRC (MENESES)
181 SCRA 513
ON INFLATION
- In respect of the argument that the inflation that has
supervened justifies the imposition of interest, this Court has held
that the effects of extraordinary inflation are not to be applied
without an agreement between the parties and without an
official declaration thereof by competent authorities
Not Allowed
PHILIPPINE NATIONAL CONSTRUCTION CORP V NLRC (MANREZA)
170 SCRA 207
- While it is true that in earlier cases, We held that employees
dismissed for cause are nevertheless entitled to separation pay
on the ground of social and compassionate justice, that doctrine
was abandoned in Philippine Long Distance Telephone Co. vs.
NLRC and Marilyn Bucay.
- Separation pay shall be allowed as measure of social justice only
in instances where employee is validly dismissed for causes other
than serious misconduct or those reflecting on his moral
124 | P
LATON
[a] Where the closure was due to business losses as in the instant
case, in which the aggregate losses amounted to over P20 billion
the Labor Code does not impose any obligation upon the
employer to pay separation benefits, for obvious reasons. The
company's practice of giving one month's pay for every year of
service could no longer be continued precisely because the
company could not afford it anymore. It was forced to close down
on account of accumulated losses of over P20 billion
[b] In this case, the basis for the claim of the additional separation
benefit of 17.5 days is alleged discrimination, i.e., unequal
125 | P
LATON
14.12 Damages
Moral/ Exemplary
COLEGIO SAN JUAN DE LETRAN-CALAMBA V VILLAS
[See Digests List Page 285]
ASIA PACIFIC CHARTERING (PHILS) INC V FAROLAN
[See Digests List Page 119]
VIERNES V NLRC
[See Digests List Page 94]
Computation
MILLARES V NLRC
[See Digests List Page 79]
Effect of Acceptance
ANINO V NLRC
[See Digests List Page 9]
ACUNA V CA
[See Digests List Page 12]
SAGUM V CA
[See Digests List Page 304]
Nominal Damages
CENTRAL LUZON CONFERENCE V CA
466 SCRA 711
- The violation of the petitioners right to statutory due process by
the private respondent warrants the payment of indemnity in the
form of nominal damages. The amount of such damages is
addressed to the sound discretion of the court, taking into
account the relevant circumstances (Savellano v. Northwest
Airlines, G.R. No. 151783, 8 July 2003, 405 SCRA 416).
Considering the prevailing circumstances in the case at bar, we
deem it proper to fix it at P30,000.00. We believe this form of
damages would serve to deter employers from future violations
of the statutory due process rights of employees. At the very
least, it provides a vindication or recognition of this fundamental
right granted to the latter under the Labor Code and its
Implementing Rules
Section 15
RETIREMENT
Statutory Reference: Art. 187; Book VI, Rule II, Omnibus Rules;
R.A. No. 8558 (1998)
15.01 Retirement
LATON
Types
GERLACH V REUTERS
448 SCRA 335
There are three kinds of retirement schemes. The first type is
compulsory and contributory in character. The second type is one
set- up by agreement between the employer and the employees
in collective bargaining agreements or other agreements between
Basis
AQUINO V NLRC (OTIS ELEVATOR CO)
206 SCRA 118
- Retirement benefits, where not mandated by law, may be
granted by agreement of the employees and their employer or as
a voluntary act on the part of the employer. They are intended to
help the employee enjoy the remaining years of his life, lessening
the burden of worrying for his financial support, and are a form of
reward for his loyalty and service to the employer.
GAMOGAMO V PNOC SHIPPING AND TRANSPORT CORP
[See Digests List Page 38]
Interpretation
LOPEZ V NATIONAL STEEL CORP
423 SCRA 109
- While retirement laws are liberally construed in favor of persons
intended to be benefited, such interpretation cannot be made in
light of clear lack of consensual and statutory basis of the grant of
retirement benefits to petitioner. There is no provision in the
CBA authorizing retirement benefits in addition to retrenchment
pay. Also, petitioner has not yet reached retirement age. Lastly,
the companys retirement plan precludes employees whose
services were terminated for cause, from availing retirement
benefits
SALOMON V ASSOCIATE OF INTERNATIONAL SHIPPING LINES INC
457 SCRA 254
- While it is axiomatic that retirement laws are liberally construed
in favor of the persons intended to be benefited, however, such
interpretation cannot be made in this case in light of the clear
lack of consensual and statutory basis of the grant of retirement
benefits to petitioner. (Philippine Scout Veterans Security &
Investigation Agency, Inc. vs. NLRC)
127 | P
LATON
Age
MAI PHILIPPINES INC V NLRC (NOLASCO)
151 SCRA 196
Rationale
PRODUCERS BANK OF THE PHILS V NLRC (PRODUCERS BANK
EMPLOYEES ASSN)
298 SCRA 517
ROMERO
- The retirement of an employee does not, in itself, affect his
employment status especially when it involves all rights and
benefits due to him, since these must be protected as though
there had been no interruption of service. It must be borne in
mind that the retirement scheme was part of the employment
package and the benefits to be derived therefrom constituted, as
it were, a continuing consideration for services rendered, as well
as an effective inducement for remaining with the corporation. It
is intended to help the employee enjoy the remaining years of his
life, releasing him from the burden of worrying for his financial
support, and are a form of reward for his loyalty.
- When the retired employees were requesting that their
retirement benefits be granted, they were not pleading for
generosity but were merely demanding that their rights, as
embodied in the CBA, be recognized. Thus, when an employee
has retired but his benefits under the law or the CBA have not yet
been given, he still retains, for the purpose of prosecuting his
claims, the status of an employee entitled to the protection of the
Labor Code, one of which is the protection of the labor union.
Disposition Petition denied. NLRC decision affirmed.
Eligibility
Ground Termination
CAINTA CATHOLIC SCHOOL V CAINTA CATHOLIC SCHOOL
EMPLOYEES UNION
489 SCRA 468
LATON
LATON
PART 3
SOCIAL LEGISLATION
Statutory Reference: Social Security Act of 1997 (R.A. No.
8282); Government Service Insurance Act of 1997 (R.A. No.
8291); Employees Compensation and State Insurance Fund,
Book IV, Labor Code of the Philippines, P.D. No. 442, as
amended; Limited Portability Scheme in Social Security
Insurance Systems (R.A. No. 7699); and National Health
Insurance Act of 1995 (R.A. No. 7878)
4. Beneficiaries
SSS - 8k
GSIS - 2g; 2h
ECSIF - 167j
NHIA - 4a
3.03 Coverage
SSS - Compulsory - 9; 9-A; Voluntary - 9c; 11; 11-A; 9b;
arrangement 8j(4); NHIA - 7
Coverage
A. Integrated Outline
Social Security Act; Government Service Insurance Act; and
Employees Compensation and State Insurance Fund; and
National Health Insurance Act
GSIS - 3
ECSIF - 169-170
SSS - 2
GSIS - Whereas Clauses
ECSIF - 166
NHIA - 2, 3, 5
SSS - 11-A
GSIS - V
ECSIF
3.05 Reporting Requirements
Law Concept
SSS - 24
GSIS - 6
ECSIF - 24, 25, 28, 29
3.02 Definitions
3.06 Funding
1. Employer
SSS - 8c
GSIS - 2c
ECSIF - 167f
NHIA - 4j
GSIS - 5; 8
ECSIF - 183c
2. Employee
SSS - 22b
SSS Failure Remit
3. Dependent
SSS - 8(3)i; 8e(2) & (3)
GSIS - 2f
ECSIF - 167i
NHIA - 4f
130 | P
LATON
GSIS
ECSIF - 196b
3.10 Prescriptive Period
3.08 Benefits
SSS - 12; 12-A; 12-(B); 13; 13-A; 13(B); 14; 14-A
GSIS - 24-27; 13-14; 15-19; 20-22; 11-12; 23; 3
ECSIF - 185; 191; 192; 193; 194(a-d); 175; 197
NHIA - 30-38
ECSIF Cases
Definition - Disability
Statute of Limitation
Manifestation
SSS GSIS - 55
ECSIF - 173
Exclusivity
Distinction - Disability
Official Functions
Permanent Total Disability
Permanent - Total
SSS - 5
GSIS - 30; 31; 32
ECSIF - 180; 182
NHIA - 39-43
DISCLAIMER
Occupational Disease
LATON