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LABOR Law II Assignment Cases June 10 2021
LABOR Law II Assignment Cases June 10 2021
FACTS:
Private respondents were employees of petitioner Philippine Village
Hotel.
However, on May 19, 1986, petitioner had to close and totally discontinue
its operations due to serious financial and business reverses resulting in
the termination of the services of its employees.
Thereafter, the Philippine Village Hotel Employees and Workers Union
filed against petitioner a complaint for separation pay, unfair labor
practice and illegal lock-out.
The Labor Arbiter issued and Order finding the losses suffered by
petitioner to be actual, genuine and of such magnitude as to validly
terminate the services of private respondents but directed petitioner "to
give priority to the complainants (herein private respondents) in [the]
hiring of personnel should they resume their business operations in the
future."
The NLRC affirmed the validity of the closure of petitioner but ordered
petitioner to pay private respondent separation pay at the rate of 1/2
month pay every year of service.
However, there is nothing in the records to show that private respondents
received their separation pay.
Petitioner decided to have a one (1) month dry-run operation to ascertain
the feasibility of resuming its business operations. In order to carry out its
dry-run operation, petitioner hired casual workers, including private
respondents, for a one (1) month period, or from February 1, 1989 to
March 1, 1989, as evidenced by the latter's Contract of Employment.
After evaluating the individual performance of all the employees and upon
the lapse of the contractual one-month period or on March 2, 1989,
petitioner terminated the services of private respondents.
Private respondents and Tupas Local Chapter No. 1362 filed a complaint
against petitioner for illegal dismissal and unfair labor practice with the
NLRC-NCR Arbitration Branch which was dismissed. On appeal to NLRC,
it reversed the decision of the Labor Arbiter and ordered to reinstate the
above-named complainants to their former or substantially equivalent
positions without loss of seniority rights plus full backwages from the
time they were actually dismissed on 02 March 1989 up to the time of
their actual reinstatement.
ISSUE :
Whether or not the private respondents are deemed to be regular
employees
RULING:
In the instant case, private respondents were validly terminated by the
petitioner when the latter had to close its business due to financial losses.
Following the directives of the NLRC to give priority in hiring private
respondents should it resume its business, petitioner hired private
respondents during their one (1) month dry-run operation.
However, this does not mean that private respondents were deemed to
have continued their regular employment status, which they had enjoyed
before their aforementioned termination due to petitioner's financial
losses.
As stated by the Labor Arbiter in his decision: It should be borne in mind
that when complainants were first terminated as a result of the company's
cessation from operation in May, 1986 the employer-employee
relationship between the parties herein was totally and completely
severed.
Such being the case, respondent acted well within its discretion when in
rehiring the complainants (herein private respondents) it made them
casual and for a specific period. The complainants are no better than the
new employees of respondent (petitioner) for the matter of what status or
designation to be given them exclusively rests in the discretion of
management. 8 The prior employment which was terminated cannot be
joined or tacked to the new employment for purposes of security of
tenure. While it is true that security of tenure is a constitutionally
guaranteed right of the employees, it does not, however, mean perpetual
employment for the employee because our law, while affording protection
to the employee, does not authorize oppression or destruction of an
employer. The questioned of the order of NLRC is hereby SET ASIDE.
Facts
Petitioner retired from the service of private respondent upon reaching the age of
sixty under its regular retirement program. He was granted an extension of
service by the Board of Directors of private respondent under a “Special Contract
of Employment.”
The contract provided, inter alia, that its term was for a period of one year
commencing on August 1, 1988;
that petitioner was employed as Head of the Warehousing, Sugar, Shipping and
Marine Department; and that he was to receive basic salary of P6,941.00 per
month.
Private respondent issued Memorandum No. 1012-PS dated December 12, 1988
and Memorandum No. 1028-PS dated January 16, 1989, both providing for a
rotation of the personnel and other organizational changes.
Pursuant to the memoranda, petitioner was transferred to the Sugar Sales
Department.
Petitioner protested his transfer and requested a reconsideration thereof, which
was denied. Consequently, on February 27, 1989, petitioner filed a complaint for
illegal dismissal, contending that he was constructively dismissed from his
employment.
Labor Arbiter
: Ruled that there was no constructive dismissal. The Labor Arbiter said that:(1)
petitioner was transferred to the Sugar Sales Department from the Warehousing,
Sugar, Shipping and Marine Department, both of which are under the Sugar
Sales Area; (2) petitioner’ s transfer was without change in rank or salary;(3)
petitioner’s designation in either department was the same;(4) the personnel
rotation was pursuant to organizational changes done in the valid exercise of
management prerogatives;(5) there was no bad faith in the transfer of petitioner,
as other employees similarly situated as he were likewise affected; and(6)
petitioner failed to show that he was prejudiced by thechanges or transferred to a
demeaning or humiliating position.
NLRC
Petitioner appealed to the NLRC which, in a resolution dated January 13, 1992,
affirmed the Labor Arbiter’s decision. In a resolution dated March 20, 1992, the
NLRC denied petitioner’s motion for reconsideration. Petitioner argues that
private respondent’s prerogative to transfer him was limited by the “Special
Contract of Employment” which was the “law “between the parties. Thus,
petitioner urges that private respondent, by employing him specifically as Head
of the Warehousing, Sugar, Shipping, and Marine Department, waived its
prerogative to reassign him within the term of the contract to another
department.
Issue
: W/N valid exercise of management prerogative since the law between the
parties is governed by their special contract of employment which thus limits the
company’s management prerogative.
Held
: No. An owner of a business enterprise is given considerable leeway in
managing his business because it is deemed important to society as a
whole that he should succeed. Our law, therefore, recognizes certain
rights as inherent in the management of business enterprises. These
rights are collectively called management prerogatives or acts by which
one directing a business is able to control the variables thereof so as to
enhance the chances of making a profit. One of the prerogatives of
management, and a very important one at that, is the right to transfer
employees in their workstation.
We find nothing in the “Special Contract of Employment” invoked by
petitioner wherein private respondent had waived its right to transfer or
re-assign petitioner to any other position in the company.
Before such right can be deemed to have been waived or contracted away,
the stipulation to that effect must be clearly stated so as to leave no room
to doubt the intentions of the parties. The mere specification in the
employment contract of the position to be held by the employee is not
such stipulation. Petitioner’s bare assertion that the transfer was
unreasonable and caused him inconvenience cannot override the fact, as
found by the Labor Arbiter and respondent Commission, that the rotation
was made in good faith and was not discriminatory, and that there was no
demotion in rank or a diminution of his salary, benefits and privileges.
3. *Singer Sewing Machine vs. Sec. of Labor GR No. 91307 1/24/9[193 SCRA
271]
Issue:
Whether or not there exists an employer-employee relationship between the
parties.
SC Ruling:
The present case calls for the application of the control test, which if not
satisfied, would lead to the conclusion that no employee-employer
relationship exists. If the union members are not employees, no right to
organize for the purpose of bargaining or as a bargaining agent cannot be
recognized.
The following elements are generally considered in the determination of
the relationship: the selection and engagement of the employee, payment
of wages, power of dismissal and the power to control the employee’s
conduct which is the most important element.
The nature of the relationship between a company and its collecting
agents depends on the circumstances of each particular relationship. Not
all collecting agents are employees and neither are all collecting agents
independent contractors. The agreement confirms the status of the
collecting agents as independent contractor.
The requirement that collection agents utilize only receipt forms and
report forms issued by the company and that reports shall be submitted at
least once a week is not necessarily an indication of control over the
means by which the job collection is to be performed. Even if report
requirements are to be called control measures, any control is only with
respect to the end result of the collection since the requirements regulate
the things to be done after the performance of the collection job or the
rendition of service.
The plain language of the agreement reveals that the designation as
collection agent does not create an employment relationship and that the
applicant is to be considered at all times as an independent contractor.
The court finds that since private respondents are not employees of the
company, they are not entitled to the constitutional right to form or join a
labor organization for the purposes of collective bargaining. There is no
constitutional and legal basis for their union to be granted their petition
for direct certification.
Facts:
Singer Machine Collectors Union-Baguio filed a petition for direct certification as the sole and exclusive
bargaining agent of all collectors of Singer Sewing Machine. The company opposed the petition mainly
because the union members are not employees but independent contractors as evidenced by the collection
agency agreement which they signed.
Med-Arbiter ruled that there exists an employee-employer relationship and granted the certification election
which was affirmed by Sec. Drilon. The company files the present petition on the determination of the
relationship. The union insists that the provisions of the Collection Agreement belie the company’s position
that the union members are independent contractors.
Ruling:
The present case calls for the application of the control test, which if not satisfied, would lead to the
conclusion that no employee-employer relationship exists. If the union members are not employees, no right
to organize for the purpose of bargaining or as a bargaining agent cannot be recognized. The following
elements are generally considered in the determination of the relationship: the selection and engagement of
the employee, payment of wages, power of dismissal and the power to control the employee’s conduct
which is the most important element. The nature of the relationship between a company and its collecting
agents depends on the circumstances of each particular relationship. Not all collecting agents are
employees and neither are all collecting agents independent contractors. The agreement confirms the status
of the collecting agents as independent contractor. The requirement that collection agents utilize only receipt
forms and report forms issued by the company and that reports shall be submitted at least once a week is
not necessarily an indication of control over the means by which the job collection is to be performed. Even
if report requirements are to be called control measures, any control is only with respect to the end result of
the collection since the requirements regulate the things to be done after the performance of the collection
job or the rendition of service.
The plain language of the agreement reveals that the designation as collection agent does not create an
employment relationship and that the applicant is to be considered at all times as an independent
contractor. The court finds that since private respondents are not employees of the company, they are not
entitled to the constitutional right to form or join a labor organization for the purposes of collective
bargaining. There is no constitutional and legal basis for their union to be granted their petition for direct
certification.
Facts:
Respondent was able to earn a satisfactory rating during his first few
months in the company, but beginning March 2011, his immediate
supervisor, Rossana J. Arcenas (Arcenas), started receiving complaints on
his work ethics. Petitioner averred that respondent's dismal work
performance resulted in delays in the production and delivery of the
company's goods.[6] To address these issues, Arcenas talked to
respondent and counselled him to improve. As months passed, however,
the complaints against respondent's performance have exacerbated to the
point that even the top level officers of the company have expressed their
dissatisfaction over his ineptitude.[7] Sensing no improvement from the
respondent and the rising complaints, Arcenas decided to sit down and
talk with respondent anew sometime in early August 2011 to encourage
the latter to shape up. She advised respondent that should he fail to heed
her advice, she may be forced to initiate disciplinary proceedings against
him for gross inefficiency.
Respondent emphasized that as early as May 29, June 10, and June 28,
2011, petitioner caused the publication in a newspaper and online a notice
of a vacant position for Purchasing Manager, the very same item he was
occupying in the company. Subsequently, he was allegedly advised by
Arcenas on August 10, 2011 that the company no longer required his
services for his failure to satisfactorily meet the company's performance
standards, and that he should turn over his work to the newly-hired
Purchasing Manager, Zardy Enriquez (Enriquez). It was further alleged
that Booth confirmed that respondent was being replaced.
Labor Arbiter Butch Donabel Ragas-Bilocura, before whom the case was
pending, rendered a Decision[12] dismissing the complaint for lack of
merit.
NLRC, in its July 31, 2012 Decision,[13] reversed the ruling of the Labor
Arbiter
In reversing the NLRC, the appellate court applied Art. 4 of the Labor
Code, which prescribes that all doubts in the implementation and
interpretation of the provisions of the Code
Ruling:
The publication of the purported vacancy for Purchasing Manager does not
bolster respondent's claim of dismissal. We find more credible petitioner's
assertion that said publications were made through sheer inadvertence, and that
the vacancy is actually for the position of Purchasing Officer, rather than
Purchasing Manager. This version is corroborated by the fact that petitioner
caused an earlier publication, dated February 6, 2011, advertising the vacancy for
Purchasing Officer, but with qualifications strikingly similar with, if not an
almost verbatim reproduction of, those subsequently published on the May 29,
June 10, and June 28, 2011 notices for Purchasing Manager
Principles:
The burden of proof is on the one who declares, not on one who denies. A party
alleging a critical fact must support his allegation with substantial evidence, for
any decision based on unsubstantiated allegation cannot stand without offending
due process.[17] And in illegal termination cases, jurisprudence had underscored
that the fact of dismissal must be established by positive and overt acts of an
employer indicating the intention to dismiss[18] before the burden is shifted to
the employer that the dismissal was legal.
5. *Pantranco North Express, Inc vs NLRC and Urbano Suiga GR no. 106654
12/16/1994
FACTS:
FACTS:
ISSUE:
RULING:
Respondent Alegre's contract of employment with Brent School having lawfully
terminated with and by reason of the expiration of the agreed term of period
thereof, he is declared not entitled to reinstatement.
The employment contract between Brent School and Alegre was executed on July
18, 1971, at a time when the Labor Code of the Philippines (P.D. 442) had not yet
been promulgated. At that time, the validity of term employment was impliedly
recognized by the Termination Pay Law, R.A. 1052, as amended by R.A. 1787.
Prior, thereto, it was the Code of Commerce (Article 302) which governed
employment without a fixed period, and also implicitly acknowledged the
propriety of employment with a fixed period. The Civil Code of the Philippines,
which was approved on June 18, 1949 and became effective on August 30,1950,
itself deals with obligations with a period. No prohibition against term-or fixed-
period employment is contained in any of its articles or is otherwise deducible
therefrom.
It is plain then that when the employment contract was signed between Brent
School and Alegre, it was perfectly legitimate for them to include in it a
stipulation fixing the duration thereof Stipulations for a term were explicitly
recognized as valid by this Court.
The status of legitimacy continued to be enjoyed by fixed-period employment
contracts under the Labor Code (PD 442), which went into effect on November 1,
1974. The Code contained explicit references to fixed period employment, or
employment with a fixed or definite period. Nevertheless, obscuration of the
principle of licitness of term employment began to take place at about this time.
Article 320 originally stated that the "termination of employment of probationary
employees and those employed WITH A FIXED PERIOD shall be subject to such
regulations as the Secretary of Labor may prescribe." Article 321 prescribed the
just causes for which an employer could terminate "an employment without a
definite period." And Article 319 undertook to define "employment without a
fixed period" in the following manner: …where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except 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 or where the work or
service to be performed is seasonal in nature and the employment is for the
duration of the season.
Subsequently, the foregoing articles regarding employment with "a definite
period" and "regular" employment were amended by Presidential Decree No.
850, effective December 16, 1975.
Article 320, dealing with "Probationary and fixed period employment," was
altered by eliminating the reference to persons "employed with a fixed period,"
and was renumbered (becoming Article 271).
As it is evident that Article 280 of the Labor Code, under a narrow and literal
interpretation, not only fails to exhaust the gamut of employment contracts to
which the lack of a fixed period would be an anomaly, but would also appear to
restrict, without reasonable distinctions, the right of an employee to freely
stipulate with his employer the duration of his engagement, it logically follows
that such a literal interpretation should be eschewed or avoided. The law must be
given a reasonable interpretation, to preclude absurdity in its application.
Outlawing the whole concept of term employment and subverting to boot the
principle of freedom of contract to remedy the evil of employer's using it as a
means to prevent their employees from obtaining security of tenure is like cutting
off the nose to spite the face or, more relevantly, curing a headache by lopping off
the head.
Such interpretation puts the seal on Bibiso upon the effect of the expiry of an
agreed period of employment as still good rule—a rule reaffirmed in the recent
case of Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989)
where, in the fairly analogous case of a teacher being served by her school a
notice of termination following the expiration of the last of three successive fixed-
term employment contracts, the Court held:
Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her
employment was probationary, contractual in nature, and one with a definitive
period. At the expiration of the period stipulated in the contract, her appointment
was deemed terminated and the letter informing her of the non-renewal of her
contract is not a condition sine qua non before Reyes may be deemed to have
ceased in the employ of petitioner UST. The notice is a mere reminder that Reyes'
contract of employment was due to expire and that the contract would no longer
be renewed. It is not a letter of termination.
Paraphrasing Escudero, respondent Alegre's employment was terminated upon
the expiration of his last contract with Brent School on July 16, 1976 without the
necessity of any notice. The advance written advice given the Department of
Labor with copy to said petitioner was a mere reminder of the impending
expiration of his contract, not a letter of termination, nor an application for
clearance to terminate which needed the approval of the Department of Labor to
make the termination of his services effective. In any case, such clearance should
properly have been given, not denied.
Petitioners were agricultural workers of the private respondent's sugar land who
were dismissed.
They had worked in all agriculture phases for several years in the said sugar land.
The respondent denied that petitioners were regular employees alleging that their
services were engaged through 'mandarols' or supply workers to do a particular
phase of the agricultural work.
As a result, the petitioners filed a complaint for illegal dismissal. The Labor
Arbiter held that the petitioners were not regular employees and the NLRC
affirmed this ruling.
Issue: W/N the petitioners are regular and permanent farm workers
RULING:
No, they are project/seasonal employees.
A project employee is one whose employment has been fixed for a specific project or
undertaking, the completion has been determined at the time of engagement, or where
work or service is seasonal in nature and employment is for the duration of the season.
As such, the termination of employment cannot be considered as illegal dismissal.
The petitioners are free to contract their services to work for other farm owners.
BRION,J.:
FACTS:
The LA dismissed the complaint for lack of merit. On appeal, the NLRC
affirmed the decision of the LA. On further appeal, the CA reversed the
NLRC decision and ruled that Jamin was a regular employee. Hence,
DMCI seeks a reversal of the CA rulings on the ground that the appellate
court committed a grave error in annulling the decisions of the labor
arbiter and the NLRC.
Labor Law
While the contracts indeed show that Jamin had been engaged as a project
employee, there was an almost unbroken string of Jamins rehiring from
December 17, 1968 up to the termination of his employment on March 20,
1999. While the history of Jamins employment (schedule of projects) relied
upon by DMCI shows a gap of almost four years in his employment for the
period between July 28, 1980 (the supposed completion date of the
Midtown Plaza project) and June 13, 1984 (the start of the IRRI Dorm IV
project), the gap was caused by the companys omission of the three
projects above mentioned.
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CASE DIGEST: D.M. CONSUNJI V. JAMIN
FACTS:
Jamin filed a complaintfor illegal dismissal, with several money claims (including
attorneys fees), against DMCI and its President/General Manager, David M. Consunji.
Jamin alleged that DMCI terminated his employment without a just and authorized
cause at a time when he was already 55 years old and had no independent source of
livelihood. He claimed that he rendered service to DMCI continuously for almost 31
years.
DMCI denied liability. It argued that it hired Jamin on a project-to-project basis, from
the start of his engagement in 1968 until the completion of its SM Manila project on
March 20, 1999 where Jamin last worked. With the completion of the project, it
terminated Jamins employment.
The LA dismissed the complaint for lack of merit. On appeal, the NLRC affirmed the
decision of the LA. On further appeal, the CA reversed the NLRC decision and ruled that
Jamin was a regular employee. Hence, DMCI seeks a reversal of the CA rulings on the
ground that the appellate court committed a grave error in annulling the decisions of the
labor arbiter and the NLRC.
Labor Law
Once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for the same tasks or nature of tasks; and
(2) these tasks are vital, necessary and indispensable to the usual business or trade of the
employer, then the employee must be deemed a regular employee.
While the contracts indeed show that Jamin had been engaged as a project employee,
there was an almost unbroken string of Jamins rehiring from December 17, 1968 up to
the termination of his employment on March 20, 1999. While the history of Jamins
employment (schedule of projects) relied upon by DMCI shows a gap of almost four
years in his employment for the period between July 28, 1980 (the supposed completion
date of the Midtown Plaza project) and June 13, 1984 (the start of the IRRI Dorm IV
project), the gap was caused by the companys omission of the three projects above
mentioned.
To reiterate, Jamins employment history with DMCI stands out for his continuous,
repeated and successive rehiring in the companys construction projects. In all the 38
projects where DMCI engaged Jamins services, the tasks he performed as a carpenter
were indisputably necessary and desirable in DMCIs construction business. He might
not have been a member of a work pool as DMCI insisted that it does not maintain a
work pool, but his continuous rehiring and the nature of his work unmistakably made
him a regular employee. Further, as we stressed in Liganza, respondent capitalizes on
our ruling in D.M. Consunji, Inc. v. NLRC which reiterates the 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."
Share
CASE DIGEST: D.M. CONSUNJI V. JAMIN
FACTS:
Jamin filed a complaintfor illegal dismissal, with several money claims (including
attorneys fees), against DMCI and its President/General Manager, David M. Consunji.
Jamin alleged that DMCI terminated his employment without a just and authorized
cause at a time when he was already 55 years old and had no independent source of
livelihood. He claimed that he rendered service to DMCI continuously for almost 31
years.
DMCI denied liability. It argued that it hired Jamin on a project-to-project basis, from
the start of his engagement in 1968 until the completion of its SM Manila project on
March 20, 1999 where Jamin last worked. With the completion of the project, it
terminated Jamins employment.
The LA dismissed the complaint for lack of merit. On appeal, the NLRC affirmed the
decision of the LA. On further appeal, the CA reversed the NLRC decision and ruled that
Jamin was a regular employee. Hence, DMCI seeks a reversal of the CA rulings on the
ground that the appellate court committed a grave error in annulling the decisions of the
labor arbiter and the NLRC.
Labor Law
Once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for the same tasks or nature of tasks; and
(2) these tasks are vital, necessary and indispensable to the usual business or trade of the
employer, then the employee must be deemed a regular employee.
While the contracts indeed show that Jamin had been engaged as a project employee,
there was an almost unbroken string of Jamins rehiring from December 17, 1968 up to
the termination of his employment on March 20, 1999. While the history of Jamins
employment (schedule of projects) relied upon by DMCI shows a gap of almost four
years in his employment for the period between July 28, 1980 (the supposed completion
date of the Midtown Plaza project) and June 13, 1984 (the start of the IRRI Dorm IV
project), the gap was caused by the companys omission of the three projects above
mentioned.
To reiterate, Jamins employment history with DMCI stands out for his continuous,
repeated and successive rehiring in the companys construction projects. In all the 38
projects where DMCI engaged Jamins services, the tasks he performed as a carpenter
were indisputably necessary and desirable in DMCIs construction business. He might
not have been a member of a work pool as DMCI insisted that it does not maintain a
work pool, but his continuous rehiring and the nature of his work unmistakably made
him a regular employee.
9. *Mitsubishi Motors vs. Chrysler Labor Union GR No. 148738 June 29,
2004
FACTS:
HELD:
The Court holds that a company employer may indeed hire an employee on a
probationary basis in order to determine his fitness to perform work. The Court
stresses the existence of the statements under Article 281 of the Labor Code
which specifies that the employer must inform the employee of the standards
they were to meet in order to be granted regularization and that such
probationary period shall not exceed six (6) months from the date the employee
started working, unless specified in the apprenticeship agreement.
Respondent Paras was employed on a probationary basis and was apprised of the
standards upon which his regularization would be based during the orientation.
His first day to report for work was on May 27, 1996. As per the company's policy,
the probationary period was from three (3) months to a maximum of six (6)
months.
Applying Article 13 of the Civil Code, the probationary period of six (6) months
consists of one hundred eighty (180) days. The Court conforms with paragraph
one, Article 13 of the Civil Code providing that the months which are not
designated by their names shall be understood as consisting of thirty (30) days
each.
This case, the Labor Code pertains to 180 days. Also, as clearly provided for in the
last paragraph of Article 13, it is said that in computing a period, the first day
shall be excluded and the last day included. Thus, the one hundred eighty (180)
days commenced on May 27, 1996, and ended on November 23, 1996. The
termination letter dated November 25, 1996 was served on respondent Paras only
at 3:00 a.m. of November 26, 1996.
The Court held that by that time, he was actually already a regular employee of
the petitioner under Article 281 of the Labor Code. His position as a regularized
employee is thus secured until further notice.
GR 158693
Facts:
Held:
Accordingly, petitioners’ dismissal was for a just cause. They had abandoned their
employment and were already working for another employer.
To dismiss an employee, the law requires not only the existence of a just and valid cause
but also enjoins the employer to give the employee the opportunity to be heard and to
defend himself.
The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of
the Omnibus Rules Implementing the Labor Code:
For termination of employment based on just causes as defined in Article 282 of the
Code:
A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to explain
his side;
A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination.
In case of termination, the foregoing notices shall be served on the employee’s last
known address.
Procedurally,
(1) if the dismissal is based on a just cause under Article 282, the employer must give the
employee two written notices and a hearing or opportunity to be heard if requested by
the employee before terminating the employment: a notice specifying the grounds for
which dismissal is sought a hearing or an opportunity to be heard and after hearing or
opportunity to be heard, a notice of the decision to dismiss; and
(2) if the dismissal is based on authorized causes under Articles 283 and 284, the
employer must give the employee and the Department of Labor and Employment written
notices 30 days prior to the effectivity of his separation.
The present case squarely falls under the fourth situation. The dismissal should be
upheld because it was established that the petitioners abandoned their jobs to work for
another company.
Private respondent, however, did not follow the notice requirements and instead argued
that sending notices to the last known addresses would have been useless because they
did not reside there anymore.
Unfortunately for the private respondent, this is not a valid excuse because the law
mandates the twin notice requirements to the employee’s last known address. Thus, it
should be held liable for non-compliance with the procedural requirements of due
process.
Note:
The Supreme Court reviewed and compared the Serrano and Wenphil cases.
In doing so, they came up with a clear cut rule on employment termination and payment
of separation pay, and if proper, with damages.
The said review is not included in the digest.
Ergo, just read it in the full text.
Version 1
ISSUE:
Whether or not an employee dismissed for just cause but without due process be
reinstated to work.
RULING:
The basic requirement of due process is that which hears before it condemns, proceeds
upon inquiry and renders judgment only after trial. The dismissal of an employee must
be for a just cause and after due process.
Petitioner committed an infraction of the second requirement thus it must be imposed a
sanction for its failure to give a formal notice and conduct an investigation as required by
law before dismissing Mallare from employment.
Petitioner must indemnify the dismissed employee which depends on the facts of each
case and the gravity of the omission committed by the employer.
Where the private respondent appears to be of violent temper, caused trouble during
office hours and even defied his supervisors as they tried to pacify him, he should not be
rewarded with re-employment and backwages. The dismissal of the respondent should
be maintained.
Version 2
Wenphil Corporation vs. NLRC
G.R. No. 80587 February 8, 1989
Facts:
• Robert Mallare was hired by Wenphil Corporation as a crew member at its Cubao
Branch and thereafter became the assistant head of the Backroom department of the
same branch.
• Mallare had an altercation with a co-employee, Job Barrameda, as a result of
which he and Barrameda were suspended on the following morning and in the afternoon
of the same day a memorandum was issued by the Operations Manager advising Mallare
of his dismissal from the service in accordance with their Personnel Manual. The notice
of dismissal was served on Mallare.
• Thus Mallare filed a complaint against Wenphil Corporation for unfair labor
practice, illegal suspension and illegal dismissal. After submitting their respective
position papers to the Labor Arbiter and as the hearing could not be conducted due to
repeated absence of counsel for respondent, the case was submitted for resolution.
Thereafter a decision was rendered by the Labor Arbiter dismissing the complaint for
lack of merit.
• Mallare appealed to the National Labor Relations Commission (NLRC) wherein
in due course a decision was rendered setting aside the appealed decision and ordering
the reinstatement of Mallare to his former position without loss of seniority and other
related benefits and one (1) year backwages without qualification and deduction.
Issues:
1. Whether or not Mallare waived his right to investigation? No.
2. Whether or not an employee dismissed for just cause but without due process be
reinstated to work? No.
Held:
1. The defiant attitude of private respondent immediately after the incident amounted to
insubordination. Nevertheless, his refusal to explain his side under the circumstances
cannot be considered as a waiver of his right to an investigation. Although in the
Personnel Manual of the petitioner, it states that an erring employee must request for an
investigation it does not thereby mean that petitioner is thereby relieved of the duty to
conduct an investigation before dismissing private respondent. Indeed the provision of
the Personnel Manual of petitioner which may effectively deprive its employees of the
right to due process is clearly against the law and hence null and void. The security of
tenure of a laborer or employee is enshrined in the Constitution, the Labor Code and
other related laws.
Under Section 1, Rule XIV of the Implementing Regulations of the Labor Code, it is
provided that "No worker shall be dismissed except for just or authorized cause provided
by law and after due process." Sections 2, 5, 6, and 7 of the same rules require that before
an employer may dismiss an employee the latter must be given a written notice stating
the particular act or omission constituting the grounds thereof; that the employee may
answer the allegations within a reasonable period; that the employer shall afford him
ample opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires; and that it is only then that the employer may dismiss the
employee by notifying him of the decision in writing stating clearly the reasons therefor.
Such dismissal is without prejudice to the right of the employee to contest its validity in
the Regional Branch of the NLRC.
2. The failure of petitioner to give private respondent the benefit of a hearing before he
was dismissed constitutes an infringement of his constitutional right to due process of
law and equal protection of the laws. The standards of due process in judicial as well as
administrative proceedings have long been established. In its bare minimum due process
of law simply means giving notice and opportunity to be heard before judgment is
rendered.
However, it is a matter of fact that when the Mallare filed a complaint against petitioner
he was afforded the right to an investigation by the labor arbiter. He presented his
position paper as did the petitioner. If no hearing was had, it was the fault of Mallare as
his counsel failed to appear at the scheduled hearings. The labor arbiter concluded that
the dismissal of private respondent was for just cause. He was found guilty of grave
misconduct and insubordination. This is borne by the sworn statements of witnesses.
The Court is bound by this finding of the labor arbiter.
By the same token, the conclusion of the public respondent NLRC on appeal that private
respondent was not afforded due process before he was dismissed is binding on this
Court. Indeed, it is well taken and supported by the records. However, it can not justify a
ruling that private respondent should be reinstated with back wages as the public
respondent NLRC so decreed. Although belatedly, private respondent was afforded due
process before the labor arbiter wherein the just cause of his dismissal bad been
established. With such finding, it would be arbitrary and unfair to order his
reinstatement with back wages.
Version 1
ISSUE:
Whether or not the hiring of an independent security agency by the private respondent
to replace its current security section a valid ground for the dismissal of the employees
classed under the latter.
RULING:
If it is shown that the employee was dismissed for any of the causes mentioned in
Art 282, the in accordance with that article, he should not be reinstated but 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 without legal
effect.
Version 2
[G.R. No. 117040. January 27, 2000] RUBEN SERRANO, petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and ISETANN DEPARTMENT STORE,
respondents.
FACTS
Ruben Serrano was the head of the security checkers section of Isetann
Department Store. He was charged with the task of supervising security checkers
in their jobs (apprehending shoplifters and preventing pilfirege of merchandise).
On October 11, 1991, the management sent him a letter immediately terminating
his services as security section head, effective on the same day. The reason given
by the management was “retrenchment”; they had opted to hire an independent
security agency as a cost-cutting measure. Serrano filed a complaint for ID, illegal
layoff, ULP, underpayment of wages and nonpayment of salary and OT pay with
the LA. The LA rendered a decision in favor of Serrano. It stated that Isetann
failed to establish that it had retrenched its security division, that the petitioner
was not accorded due process, etc. and even stated that the day after Serrano’s
dismissal, Isetann employed a safety and security supervisor with similar duties
to that of the former. The NLRC on the other hand reversed the LA but ordered
Isetann to pay separation pay equivalent to one month per year of service, unpaid
salary, et al. It held that the phase-out of the security section was a valid exercise
of management prerogative on the part of Isetann, for which the NLRC cannot
substitute its judgment in the absence of bad faith or abuse of discretion on the
part of the latter; and that the security and safety supervisor’s position was long
in place prior to Serrano’s separation from the company, or the phase-out of the
Security Section.
ISSUE Whether the petitioner’s dismissal was illegal.
The sanction provided was the payment of backwages from the time of dismissal up to
the decision of the court finding just or authorized cause. This was thought to balance
the interests of both parties, recognizing the employee’s right to notice and at the same
time the right of the employer to dismiss for any of the just and authorized causes. The
Court also responded to the arguments of Justices Puno and Panganiban by stating that
the violation in the procedural requirement of termination is not a denial of the
fundamental right to due process. This is because of the ff reasons: 1) The due process
clause is a limitation on governmental powers, inapplicable to the exercise of private
power, such as in this case. The provision “No person shall be deprived of life, liberty and
property without due process of law” pertains only to the State, as only it has the
authority to do the same. 2) The purpose of the notice and hearing under the Due
process clause is to provide an opportunity for the employee to be heard before the
power of the organized society is brought upon the individual. Under Art. 283, however,
the purpose is to give him time to prepare for the eventual loss of his job and for DOLE
to determine whether economic causes exist to justify termination. It is not to give
opportunity to be heard – there is no charge against the employee under Art. 283 3) The
employer cannot be expected to be an impartial judge of his own cause. 4) Not all notice
requirements are requisites of due process. Some are simply a part of a procedure to be
followed before a right granted to party can be exercised; others are an application of the
Justinian precept. Such is the case here. The failure of the employer to observe a
procedure for the termination of employment which makes the termination of
employment merely ineffectual. 5) Art. 279 of the LC provides that only dismissal
without just or authorized cause renders such dismissal illegal. To consider termination
without observing procedural reqt’s as also ID is to add another ground for ID, thereby
amending Art. 279.; Further, there is a disparity in legal treatment, as employees who
resign without giving due notice are only liable for damages; it does not make their
resignation void. In this case, the separation pay was a distinct award from the payment
of backwages as a way of penalty. Petition was denied.
MARTIN, J.:
The issue in this petition is whether an employee who has already received his separation
pay can still recover retirement benefits from his employer.
Private respondent was first employed as a bus conductor by the Batangas Laguna
Tayabas Bus Company, the herein petitioner, on July 1, 1933 and worked with it until
December 31, 1941 when it ceased operation in its transportation business due to the
outbreak of World War II. When the petitioner resumed its business after the war, the
private respondent rejoined the company on May 22, 1945. From a mere bus conductor,
the private respondent rose to the position of administrative officer of the petitioner with
a basic salary of P1,000.00 a month. His total length of service was for 30 years, 9
months and 17 days which under Republic Act No. 1787 amounts to 31 years. Sometime
in the month of September, 1967, the private respondent drew two cash advances or
"vales" of P100.00 each or a total of P200.00 from the company's station at Infanta,
Quezon where he was then on vacation without the prior approval of the petitioner, in
violation of a memorandum restricting cash advances of confidential employees to
P100.00 each payroll period. Due to this infraction, the services of private respondent
were terminated in a Special Order issued by the petitioner's Acting General Manager
effective September 9, 1967. As a result of his dismissal, the private respondent was
constrained to file a complaint before the Court of First Instance of Laguna (Branch III)
against the petitioner to recover the sums of P19,987.56 as separation pay; P17,050.00 as
retirement benefits; P35,018.53 as "would-be earnings" had he not been separated and
reached the compulsory retirement age; P13,720.50 for loss of Social Security benefits;
P200,000.00 as moral damages; P100,000.00 as exemplary damages; P10,000.00 for
attorney's fees and P2,000.00 as expenses for litigation.
In answer, the petitioner denies the claim of private respondent that he was
unceremoniously and without any valid cause or investigation summarily dismissed
from the service by its Acting Manager. According to the petitioner, the private
respondent's act of obtaining from the company's dispatcher in Infanta, Quezon, two
cash advances or "vales" in the total amount of P200.00 without the previous approval of
the petitioner, was a violation of the company's memorandum restricting cash advances
of confidential employees to P100.00 each payroll period, and constituted an abuse of
trust and confidence reposed upon him. Petitioner belies the charge of the private
respondent that his dismissal was arbitrary as he was fully aware of the strict policy of
the company restricting the cash advances or "vales" of its confidential employees and
that he even signed a promissory note that if found to be abusing the same he was willing
to receive severe punishment from the company. However, in spite of his promise the
private respondent still obtained cash advances for the payroll period ending May 31,
1967 (Exhibit D-18, and June 5, 1967 (Exhibit D-19) in excess of P100.00 limit allowed
for each payroll period without the approval of the petitioner. Then again on September 1
and 6, 1967 despite his promissory note the private respondent drew the unauthorized
cash advances of P200.00 in violation of the existing memorandum of the company.
After trial, the Court of First Instance of Laguna (Branch III) found that the dismissal of
the private respondent was for just cause and that he was therefore not entitled to
separation pay and that since it has not been shown that the petitioner had violated the
law or contract or had committed any act of quasi-delict, said court also ruled that the
private respondent has no cause of action against the petitioner for unearned income,
Social Security benefits and damages. However, it ordered the petitioner to pay the
private respondent the sum of P17,050.00 as his retirement pay with interest thereon at
the legal rate from filing of the case until fully paid, plus attorney's fees of P2,000.00 and
the cost of the suit and dismissed all other claims of the private respondent.
From said decision, both the petitioner and the private respondent appealed to the Court
of Appeals, with the private respondent pressing upon the following errors:
1. That the lower court erred in not holding that plaintiff-appellant's dismissal was
unlawful and/or arbitrary.
2. That the lower court erred in dismissing all of plaintiff-appellant's claim with the
exception of retirement pay.
1. That while the lower court correctly found that the dismissal of plaintiff was for just
cause, nevertheless the lower court erred in directing defendant to pay P17,050.00 as
retirement benefits to the plaintiff, with interest thereon at the legal rate from the date of
filing of the case until fully paid, plus attorney's fees and the costs of the suit.
2. That the lower court erred in failing to order plaintiff to pay his indebtedness to
defendant in the sum of P13,087.86 with legal interest thereon from the date of demand,
as embodied in the Special Order dated September 9, 1967, as well as to pay a reasonable
sum as attorney's fees and the costs.
3. That the lower court erred in not rendering judgment for the defendant in all respects
and in not completely absolving defendant from all liability.
On February 28, 1974, the Court of Appeals thru a Special Division of Five Justices
modified the decision of the trial court by ordering the petitioner to pay the private
respondent, in addition to the retirement benefit of P17,050.00 with interest thereon at
the legal rate from the date of the filing of this case until fully paid, plus attorney's fees of
P2,000.00, the sum of P19,987.56 as separation pay, also with legal interest from the
date of the filing of the complaint until fully paid minus the indebtedness of private
respondent in the amount of P13,087.86 with legal interest from September 9, 1967 until
paid with costs against the petitioner. Justice Ameurfina Melencio-Herrera of the
respondent Court of Appeals, however, dissented from the majority opinion. A motion
for reconsideration of the decision was denied.
Hence this instant petition to review on certiorari the decision of the respondent Court.
There is no dispute that at the time of his dismissal on September 9, 1967, private
respondent had an outstanding account of P13,087.86 with the petitioner. Due to the
abuse of the "vale" privilege, specially by the confidential employees, the petitioner
issued on July 21, 1965, a Memorandum (Exhibit 26) prohibiting the employees from
drawing cash advances in excess of P100.00 every payroll period. Then on May 25, 1967,
the Finance Manager of the petitioner issued a Circular in the following tenor:
"To all Employees Concerned:
In view of the increase on the payroll shortages, the Management is planning to transfer
your payroll shortage to Due from Officer & Employees, provided that you sign the
promissory note below that you will not get short again.
At the bottom of one of the copies of the Circular, the private respondent signed a
promissory note (Exhibit I) which reads:
"Promissory Note
I promise that from now on, I will never abuse my vale privilege should I be found
abusing my vale privilege and get short again, the Management will have the right to
impose severe disciplinary action against me.
(Sgd.) TEOTIMO DE MESA
(Signature of Employee P/R-)"
In total disregard of the foregoing promissory note, the private respondent again
obtained cash advances for the payroll period ending May 31, 1967 (Exhibit D-18, and
June 15, 1967, (Exhibit D-19), without the approval of the management, thus exceeding
the limit allowed in the petitioner's memorandum of July 21, 1965 (Exhibit 26). As the
abuse of the "vale" privilege remained unabated, the company issued again another
memorandum on June 2, 1967 limiting the cash advances of confidential employees to
P100.00 for every payroll period, any excess of which shall be approved by the President,
General Manager or Finance Officer (Exhibit 23). Thereafter, came the memorandum of
July 1, 1967 which again restricted the cash advances of confidential employees to
P100.00 per payroll period. Despite the last memorandum of July 1, 1967 and his
promissory note on May 25, 1967, the private respondent drew cash advances in the
amount of P200.00 between September 1 and 6, 1967. This precipitated the action of the
petitioner to dismiss the private respondent on September 9, 1967.
The main contention of private respondent is that his dismissal was unlawful and/or
arbitrary because (a) he was not given a hearing on the alleged cause of his dismissal; (b)
the petitioner disregarded his Service Manual and (c) the petitioner violated the
"Schedule of Penalties" (Exhibit K) which had been agreed upon between the petitioner
and its employees. One of the fundamental duties of the employee is to yield obedience
to all reasonable rules, orders and instructions of the employer and willful or intentional
disobedience thereof, as a general rule justifies recission of the contract of service and
the peremptory dismissal of the employee. However, in order to constitute disobedience,
the employee's conduct must have been willful or intentional, willfulness being
characterized by a wrongful and perverse mental attitude rendering the employee's act
inconsistent with proper subordination.[1] The rules, instructions or commands in order
to be a ground for discharge on the score of disobedience, must be reasonable and lawful,
must be known to the employee, and must pertain to the duties which the employees
have been engaged to discharge.[2] There can be no doubt that the private respondent
here has repeatedly abused the "vale" privilege and therefore in this respect can be
considered willful. He cannot claim that he is ignorant of the memoranda and the
circulars limiting the cash advances of employees to not more than P100.00 each payroll
period. But the rules, instructions or commands limiting the cash advances of
confidential employees, do not pertain to the duties which the petitioner has been
engaged to discharge. Said rules, instructions or commands are primarily intended for
the benefit of the company itself and have nothing to do with the duties of its employees
and therefore cannot be a valid ground for their discharge on the score of disobedience.
But, even granting that a willful disobedience of said rules, instructions or commands
limiting the cash advances of the employees is a valid cause for his discharge, yet his
dismissal was arbitrary because he was not given a hearing on the alleged cause of his
dismissal in total disregard of the Service Manual of 1962 of the joint management of the
Laguna Tayabas Company and Batangas Transportation Company (Exhibit I) which
among others provides:
"2. In all cases where punishment of any sort is imposed, the penalty shall be
commensurate with the nature and gravity of the offenses charged, taking into
consideration the varying circumstances surrounding each particular case; the offender
shall, however, be given the benefit of all doubts that may exist as to his responsibility for
the offense charged.
"3. No employee shall be summarily punished for any offense or dereliction alleged to
have been committed without having been given an opportunity to be heard and defend
himself. Unless otherwise decided by the Management, the Legal Department is
designated to investigate all complaints against employees and to take such statement or
hear such defenses as the erring employee may wish to make. Upon termination of the
investigation, The Legal Department will submit its findings to the Management for
decision. No penalty involving a fine, suspension or dismissal will take effect until finally
approved by the General Manager. (Chapter X, pars. 2 and 3, Exh. I-1; Italics supplied.)"
Obviously under the foregoing provisions of the Labor Agreement, the petitioner cannot
arbitrarily and summarily dismiss the private respondent for alleged violation of the
memorandum of July 1, 1967 and of his promissory note dated May 25, 1967 without
giving him the opportunity to be heard and defend himself. Having promulgated the
Service Manual itself, the petitioner is bound by its provisions. So with the labor
agreement it had signed with the Batangas Transportation Employees Association of
which private respondent is a member. It must be noted that the terms and conditions of
a collective bargaining contract constitute the law between the parties.[3] Those who are
entitled to its benefits can invoke its provisions. In the event that an obligation
prescribed therein is not fulfilled, the aggrieved party can go to court for redress.[4]
Undoubtedly, the act of the petitioner in dismissing private respondent without the
benefit of a hearing is in violation of the Service Manual of the petitioner and the Labor
Agreement it has with its employees. Besides, the failure of petitioner to give the private
respondent the benefit of a hearing before he was dismissed constitutes an infringement
on his constitutional right to due process of law and not to be denied the equal protection
of the laws.[5] The right of a person to his labor is deemed to be his property within the
meaning of the constitutional guarantee. This is his means of livelihood. He cannot be
deprived of his labor or work without due process of law.[6] Since the right of private
respondent to his labor is in itself a property and that the labor agreement between him
and petitioner is the law between the parties, his summary and arbitrary dismissal
amounted to a deprivation of his property without due process. For such unlawful
dismissal, the private respondent is entitled to separation pay. Section 1, Republic Act
No. 1052, as amended by Republic Act No. 1787, provides:
"SEC. 1. In cases of employment without a definite period, in a commercial, industrial, or
agricultural establishment or enterprise, the employer or the employee may terminate at
any time the employment with just cause; or without just cause in the case of an
employee by serving written notice on the employer at least one month in advance, or in
the case of an employer, by serving such notice to the employee at least one month in
advance or one-half month for every year of notice of the employee, whichever is longer,
a fraction of at least six months being considered as one whole year.
The employer, upon whom no such notice was served in case of termination of
employment without just cause may hold the employee liable for damages.
The employee, upon whom no such notice was served in case of termination of
employment without just cause shall be entitled to compensation from the date of
termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice. (Italics supplied.)"
Pursuant to the foregoing provision, since private respondent was dismissed without
cause, he is entitled to compensation from the date of termination of his employment
equivalent to his wages or salaries corresponding to the required period of notice. Private
respondent worked with the petitioner from July 1, 1933 up to December 31, 1941,
covering a period of 8 years and 6 months and then after the war he re-entered the
service of petitioner on May 22, 1945 until he was separated on September 9, 1967 or a
period of 22 years 8 months and 21 days. His total length of service is 30 years, 9 months
and 17 days which under Republic Act No. 1787 is equivalent to 31 years and his basic
salary was P1,000.00 a month. Since his dismissal was without cause he is entitled under
the law to one half (1/2) month salary for every year of service, so for 31 years of service
he is entitled to 15-1/2 months salary or the amount of P19,957.56 as his separation pay
with legal interest from the filing of the complaint until fully paid.
After finding private respondent's dismissal from the service to be without cause and
arbitrary and upholding his right to separation pay, is he also entitled to retirement
benefits pursuant to the Labor Agreement entered by petitioner with its employees under
Section 5, Article XVI thereof which reads:
"A member or his designated beneficiary shall be entitled to receive the benefits
established under this Plan should he retire or is separated from the COMPANY for any
cause provided for in Section 4. The benefits which a member or his beneficiary is
entitled to receive shall be paid by the COMPANY in lump sum within a period of thirty
(30) days, if possible, but in no case beyond sixty (60) days, from the date of accrual. * *
*"
One of the grounds for retirement provided for in Section 4(b) is "upon attainment of his
optional retirement." And according to Section 1, paragraph (g), Article XVI, of the Labor
Agreement "by optional retirement is meant retirement of an employee after his 8 years
in the service at which date an employee may elect to retire subject to conditions herein
below established." Considering that private respondent has already served the
petitioner 31 years he has more than reached the optional retirement age under the
agreement. According to his Certificate of Baptism, private respondent (Exh. C) was born
on December 9, 1909 so that when his services were terminated on September 9, 1967,
he was exactly 58 years, 9 months and 10 days old. Under Section 6, Article XVI of the
same Labor Agreement, "an employee shall receive one-half (1/2) month's salary for
every year of service as defined in Sections 1(a) and 2(a) above, and, therefore, the same
excludes overtime pay, bonuses and other supplements from the time an employee
entered the service up to his retirement or separation from the service of the company."
And under Section 7, thereof, "an employee who has rendered at least eight (8) years of
continuous service may, at its option, retire and enjoy the benefits prescribed in the Plan:
* * *."
But petitioner contends that private respondent can only avail himself of either
separation pay or retirement benefits but not both, citing in support thereof, the ruling of
this Court in the case of Cipriano vs. San Miguel Corporation.[7] The foregoing ruling
cannot be made to apply to the present suit because in said case it is so expressly
provided in the Labor Agreement that:
"Regular employees who are separated from the service of the company for any reason
other than misconduct or voluntary resignation shall be entitled to either 100% of the
benefits provided in Section 2, Article VIII hereof regardless of their length of service in
the company or to the severance pay provided by law, whichever is the greater amount."
Thus in said case the employee was entitled to either the amount prescribed in the plan
or the severance pay provided by law whichever is the greater amount. In the present
case, there is nothing in the labor agreement entered into by petitioner with the Batangas
Transportation Employees Association of which private respondent is a member barring
the latter from recovering whatever benefits he is entitled to under the law in addition to
the gratuity benefits under the labor agreement between him and his employer. Neither
is there any provision in the Termination Pay Law (Republic Act No 1052, as amended by
Republic Act No. 1787) that an employee who receives his termination pay upon
separation from the service without cause is precluded from recovering any other
benefits agreed upon by him and his employer. In the absence of any such prohibition,
both in the aforesaid Labor Agreement and the Termination Pay Law the private
respondent has the right to recover from the petitioner whatever benefits he is entitled to
under the Termination Pay Law in addition to other benefits conferred upon him by the
aforesaid labor agreement.
WHEREFORE, the instant petition is hereby dismissed with costs against the petitioner.
SO ORDERED.
FACTS
• Private respondents filed with the NLRC complaints for illegal dismissal with
a prayer for reinstatement and backwages. Moral damages and attorney’s
fees.
• They alleged that Asian Alcohol used the retrenchment to dismiss them
because they were members of the union. They also alleged that Asian Alcohol
was not bankrupt as it has engaged in aggressive scheme in contractual
hiring.
• NLRC: Reversed. Illegal dismissal. The positions of the respondents were not
redundant because casuals replaced them. The company was not in the state
of reverses at the time of retrenchment.
ISSUE
Whether or not there is a valid retrenchment thus making the dismissal of private
respondents illegal.
RULING:
• Under the said provision, retrenchment and redundancy are just cause for
the employer to terminate the services to preserve the viability of the business. In
exercising its right, however management must faithfully comply with the
substantive and procedural requirements laid down by law and jurisprudence.
• In the case at bar, private respondents never contested the veracity of the
audited financial documents proferred by Asian Alcohol before the LA.
Documents show that the petitioner has an accumulated losses amounting to
306, 764, 349
• In rejecting the petitioner’s claim the NLRC stated that the alleged deficits
of the corporation did not prove anything for the petitioner since they were
incurred before the take over of Prior Holdings. Under Art 283 of the Labor Code,
retrenchment to prevent losesse means that retrenchment must be undertaken by
the employer before loses are actually sustained. The employer need not keep his
employees until after loses shall materialize.
• The law gives the new management every right to undertake measures to
save the company from bankruptcy. In this case, when Prior Land bought the
corporation and took over the management of it there were no signs that the loses
would end, hence Prior land undertook re-organizational plan which retrenched
number of employees because ultimately they will absorb all the loses that the
prior corporation incurred.
PNOC-EDC v NLRC
Facts:
1. Withdrew P1680.00 from company funds, appropriated P680.00 for personal use and
paid the nipa supplier P1000.00.
2. Withdrew P28.66 as payment for the fabrication of rubber stamp but appropriated the
P8.66 for personal use.
3. Absence without leave and without proper turn-over thus disrupting and delaying
company work activities.
4. Vacation leave without prior leave.
Mercado filed a complaint against PNOC-EDC before the NLRC Regional Arbitration
Branch. After considerations of position papers presented by both parties, the labor
arbiter ruled in favour of Mercado.
Issues:
2. Whether or not the labor arbiter and the NLRC are justified in ordering the
reinstatement of the private respondent, payment of his savings, 13th month pay, and
payment of damages as well as attorney’s fees.
Held:
The High Court affirmed the resolution of the respondent NLRC with modification:
reducing moral damages to P10000 and exemplary damages to P5000.
1. The test whether a government-owned or controlled corporation is subject to Civil
Service Law is the manner of its creation. Those created by special charter are subject to
its provision while those created under General Corporation Law are not within its
coverage. The PNOC-EDC, having been incorporated under General Corporation Law, is
subject to the provisions of the Labor Law.
FACTS: Manuel S. Pineda was employed with the Philippine National Oil Co. - Energy
Development Corp. (PNOC-EDC) from September 17, 1981, when he was hired as clerk,
to January 26, 1989, when his employment was terminated. In November, 1987, while
holding the position of Geothermal Construction Secretary, Engineering and
Construction Department at Tongonan Geothermal Project, Ormoc City. Pineda decided
to run for councilor of the Municipality of Kananga, Leyte, in the local elections
scheduled in January, 1988, and filed the corresponding certificate of candidacy for the
position. Thereafter, Pineda won the election and was thus proclaimed. Despite so
qualifying as councilor, and assuming his duties as such, he continued working for
PNOC-EDC. Legal Department of PNOC rendered an opinion to the effect that Manuel S.
Pineda should be considered ipso facto resigned upon the filing of his Certificate of
Candidacy in November, 1987, in accordance with Section 66 of the Omnibus Election
Code.
RULING: When the Congress of the Philippines reviewed the Omnibus Election Code of
1985, Congress made no effort to distinguish between two classes of government-owned
or controlled corporations or their employees in the Omnibus Election Code or
subsequent related statutes, particularly as regards the rule that an any employee "in
government-owned or controlled corporations, shall be considered ipso facto resigned
from his office upon the filing of his certificate of candidacy." What all this imports is
that Section 66 of the Omnibus Election Code applies to officers and employees in
government-owned or controlled corporations, even those organized under the general
laws on incorporation and therefore not having an original or legislative charter, and
even if they do not fall under the Civil Service Law but under the Labor Code. In other
words, Section 66 constitutes just cause for termination of employment in addition to
those set forth in the Labor Code, as amended.||
FACTS:
Petitioner filed her complaint for illegal dismissal against private respondents
and prayed for reinstatement plus backwages, moral and exemplary damages,
and attorney’s fees.
On April 30, 1988, the annual regular meeting of stockholders was held at the
principal office of the corporation in Laoag City. New set of Board members were
elected. The new Board conducted a preliminary audit which revealed that the
college was financially distressed, unable to meet its maturing obligations with its
creditor bank. The new management embarked on a realignment of positions and
functions of the different department in order to minimize expenditures. As a
result of the audit, NWC was compelled to abolish the administrative positions
held by petitioner, which she did not contest.
LA dismissed the complaint. Petitioner went to NLRC which merely modified the
decision of LA. Hence this appeal.
ISSUE:
whether NWC can validly terminate the administrative position held by petitioner.
Whether NWC observed due process in dismissing petitioner.
RULING:
YES. As found by the NLR, Petitioner was a managerial employee who has to
have the complete trust and confidence of respondents. While it may be true that
complainant was not strictly an accountable employee primarily responsible for
disbursement of whatever funds, respondents had some basis in losing its trust
and confidence in complainant.
Respondents’ evidence showed that under the principle of command
responsibility, complainant was in a sense responsible in the monitoring of
monetary transactions involving funds from library collections and from Related
Learning Science collection. For it has been held that in case of termination due
to loss of trust and confidence proof beyond reasonable doubt of misconduct is
not necessary but some basis being sufficient.
Petitioner’s claim of constructive dismissal stems from her alleged removal from
the positions of Administrator, Vice President for Administration and Executive
Vice President. From the time petitioner assumed the position of Executive Vice
President, she did not possess any legal right to claim security of tenure
concerning this position because she assumed the same without authority from
the Board of Directors. Petitioner cannot claim that she was dismissed from the
position of Administrator and Vice-President for Administration because her
continuous occupation of the positions is at the discretion or pleasure of the
Board of Directors.
The acquisition of security of tenure by the teacher signifies that he/she shall
thenceforth have the right to remain in employment as such teacher until he
reaches the compulsory retirement age in accordance with the rules of the school
or the law. That tenure, once acquired, cannot be adversely affected or defeated
by requiring the teacher to execute contracts stipulating the termination of
his/her employment upon the expiration of a fixed period or term. Contracts of
that sort are anathema and will be struck down as null and void.
The management of NWC rests on its Board of Directors including the selection
of members of the faculty who may be allowed to assume other positions in the
college aside from that of teacher or instructor. When the then new Board of
Directors abolished the additional positions held by the petitioner, it was merely
exercising its right.
The Board abolished the positions not because the petitioner was the occupant
thereof but because the positions had become redundant with functions
overlapping those of the President of the college. The Board of Directors has the
power granted by the Corporation Code to implement a reorganization of
respondent college’s offices, including the abolition of various positions, since it
is implied or incidental to its power to conduct the regular business affairs of the
corporation.
Petitioner also failed to rebut the findings of the labor arbiter. In the instant
petition, she has again failed to overturn private respondents’ evidence as well as
the findings of the labor arbiter which were affirmed by the NLRC. Petitioner’s
application for an indefinite leave of absence was not approved by the college
authorities, but this notwithstanding, she failed to follow-up her application and
did not report for work. Believing she was dismissed, petitioner filed the
complaint for illegal dismissal, illegal deductions, underpayment, unpaid wages
or commissions and for moral damages and attorney’s fees.
Article 282(c) of the Labor Code provides that an employer may terminate an
employment for “fraud or willful breach by the employee of the trust reposed in
him by his employer or his duly authorized representative.”
Loss of trust and confidence is a valid ground for dismissing an employee.
Termination of employment on this ground does not require proof beyond
reasonable doubt. All that is needed is for the employer to establish sufficient
basis for the dismissal of the employee. Both the LA NLRC found that there is
some basis for respondent NWC’s loss of trust and confidence on petitioner. The
dismissal of the petitioner was for a just and valid cause
The legality of the act of dismissal, that is, dismissal under the ground provided
under Article 283 of the New Labor Code; and
The legality in the manner of dismissal, that is, with due observance of the
procedural requirements of Sections 2, 5, and 6 of BP Blg. 130.
While the Labor Code treats of the nature and the remedies available with regard
to the first, such as: (a) reinstatement to his former position without loss of
seniority rights, and (b) payment of backwages corresponding to the period from
his illegal dismissal up to actual reinstatement, said Code does not deal at all with
the second, that is, the manner of dismissal, which is therefore, governed
exclusively by the Civil Code.
In cases where there was a valid ground to dismiss an employee but there was
non-observance of due process, this Court held that only a sanction must be
imposed upon the employer for failure to give formal notice and to conduct an
investigation required by law before dismissing the employee . Employer must be
imposed a sanction for its failure to give a formal notice and conduct an
investigation as required by law before dismissing petitioner from employment.
The measure of this award depends on the facts of each case and the gravity of
the omission committed by the employer.
BARRERA, J.:
Col. Rueda and San Miguel Brewery, in their answer, denied the charges of
interference or harassment because of union activities, claiming that complainant
was not even a member of the union; that there was no discrimination in his non-
appointment to a permanent position, because it is the Company's prerogative to
determine who may be appointed or not; and that the charges, if at all, were
purely personal to complainant and the Security Officer, and have no bearing on
labor relations between the union and the company.
After due hearing, the court rendered a decision, in part reading as follows:
"The evidence presented by the parties show the following to be undisputed or
duly established: that Peter C. Santos was employed off and on as a temporary
security guard during the period from December 16, 1952, to February 3, 1955,
when he was dismissed, the total time of his actual service being eight and a half
months; that on April 11, 1954, Santos was appointed confidential agent of the
union (Exhibit 'F') and on October 23, 1954, formally became a member thereof
(Exhibit 'H'); that on April 1, 1954 (must be August 1, 1954), the union filed
charges against Col. Rueda with Santos gathering the materials for some of the
charges, and the union at the same time demanded that positions vacated by the
members of the union be filled with applicant's recommended by the board of
directors of the union (Exhibit 'G'); that on September 26, 1955, the board of
directors of the union recommended Santos to take the place of Carlos Abelardo
who was a permanent guard and a member of the union (Exhibit 'N'); that on
October 23, 1954, Santos was called or employed for the last time; that on
November 3, 1954, Santos was physically examined to find out if he could be
made permanent guard; and that on January 27, 1955, he was again physically
examined and on February 3, 1955, dismissed instead of being made permanent
guard.
"That there were meetings and conversations between Santos And Col. Rueda
and investigations of Santos' possession of firearms conducted by Col. Rueda
himself and by the MIS and PC agents on October 29, November 10, November
17, November 20, and/or December 11, all in the year 1954, either at the instance
of Col. Rueda or of their (MIS & PC) own volition, is not disputed.
"The Court cannot see why Dr. Horilleno did not tell or advise Santos of the said
defect; why no treatment whatsoever was given; why, if the medical department
did not have the necessary medicine, the doctor did not issue any prescription so
that Santos could buy the medicine elsewhere; why Santos was allowed to
continue in the service for three months while suffering from a chronic O.M.P.C.
which is a 'decided liability'; and why, after three months from the first physical
examination, he was again examined physically to find out if he was already
cured when he had not been advised of, nor treated for, his ailment.
"Rueda explained that he 'let him stay to give him time to be cured' because '* * *
I (Rueda) never suspected him to be the one to be doing things like that because I
was the one who put him in the job and put him there from time to time.' Then he
added; "If I ever knew that, I would not have put him in again if he will be doing
that, but I have confidence in him because I was the one giving him bread and
butter. Because I do not think a man to whom you give bread and butter will work
against you' (t.s.n., p. 44, December 19, 1955). Stated otherwise, Rueda is
disappointed, so that if he knew Santos would work against him, he would not
have employed him time and again.
"But did Rueda really not know that Santos worked against him (Rueda) prior to
the investigations conducted by the MIS and PC agents and by him of Santos'
possession of firearms from and between October 29, 1954 and December 11,
1954?
"The evidence belies Rueda's and the San Miguel Brewery's contention. It will be
recalled that Rueda knew Santos to be a confidential agent of the Union (t.s.n., p.
9, Hearing of December 19, 1955); that he saw the charges against him filed by
the union with the petition to fill positions vacated by the members of the union
with applicants recommended by the board of directors of the union (t.s.n., pp.
11-12, Hearing of August 17, 1955, and pp. 39-41, Hearing of December 11, 1955);
that the management received the recommendation of the union's board of
directors in favor of Santos to take the place of Carlos Abelardo who was a
permanent guard and a member of the union; and that Rueda had him examined
physically in order to find out if he could be made a permanent guard. Rueda and
the management knowing Santos to be the confidential agent of the union and
member thereof and knowing that he gathered materials in support of some of
the charges against Rueda, it could hardly be a mistake to conclude that because
of his (Rueda) disappointment, the respondents dismissed Peter C. Santos for his
union activities with the physical defect as a pretext.
"There is no showing, not even a claim, that because Santos is suffering from
chronic O.M.P.C., on his left ear, something untoward in the performance of his
duties, happened as a result thereof for more than two years when he was with
the respondent company off and on. On the contrary, his efficiency record is
commendable. Upon the whole, the evidence supports the conclusion that
respondents committed unfair labor practice against Peter C. Santos in
discharging him."
The court, consequently, directed the reinstatement of Peter C. Santos to the
position of permanent security guard vacated by Carlos Abelardo, and the
payment of back wages from the date of his dismissal until actually reinstated.
Therein respondents were further directed to cease and desist from committing
similar unfair labor practice.
Error II. That the Court of Industrial Relations committed an error of law in
making findings and conclusions not supported by substantial evidence on the
record taken as a whole, contrary to the decision of the Supreme Court in "Ang
Tibay vs. Court of Industrial Relations" [40 Off. Gaz., pp. 35, 37] and Section 6,
Industrial Peace Act.
Error III. That the decision of the Court of Industrial Relations is contrary to the
decision of the Supreme Court in "Olaivar vs. Manila Electric Co." [Off. Gaz.,
14th Supp. 73].
On August 16, 1957, this Court, deliberating upon the allegations of the petition,
resolved to dismiss it on the ground that the questions involved were factual and
that there was no merit in the petition. A motion for reconsideration of this
resolution was denied. However, upon a second motion for reconsideration
predicated on an additional ground
Error IV. That the Court of Industrial Relations acted with grave abuse of
discretion and in excess of its jurisdiction by directing the employment of
respondent Peter C. Santos as a permanent security guard when he was
discharged as a temporary security guard an affirmative action which clearly
exceeded the basic objective of "effectuation of the policies" of Republic Act No.
875
the petition was given due course.
We now take up the first three assignments of error urged by the petitioner.
Error No. 1. There is no merit in the contention that the lower court erred in
resolving the motion for reconsideration by the vote of four of the five judges of
the court Judge Lanting, who penned the original decision, being on leave at the
time. The requirement that a motion for reconsideration shall be resolved by the
court en banc, the judges sitting together, simply demands that all the available
judges shall take part and as long as three, at least, of the judges attending
concur, it is enough for the pronouncement of a decision, order or award. (C.A.
No. 559).
Errors Nos. 2 and 3. These two assignments of error involve the factual findings
of the lower court. It is an oft repeated doctrines that is not for this Court to
review the findings of fact of the Court of Industrial Relations in the absence of a
showing that it had abused its discretion to an extent amounting to a lack or
excess of jurisdiction. In the case at bar, we are not prepared to conclude that
there is lack of substantial evidence to support the finding of the trial court that
the dismissal of respondent Santos was attributable to his union activities. This
conclusion is borne out by the following established facts:
(1) Santos was appointed confidential agent of the Union on April 11, 1954 (Exh.
F); (2) it was Santos who gathered data or information which became the basis of
the complaint filed with the Company against Col. Rueda on August 1, 1954 (See
Exh. G), charging him, among others, with unfair labor practices, in that he had
been keeping "an eye on the officers and members of the Union who have
previous records"; advising his recommendees and protegees not to join the
union; and imposing severe punishment on union members, but lighter
impositions to non-members for any violation of the rules and regulations of the
Security Department, for the purpose of discouraging union membership; (3) Col.
Rueda learned of this complaint and, consequently, became prejudiced against
Santos who gathered such information; (4) in the same communication
(complaint), Exh. G, sent by the union to the management, it was petitioned that
vacancies created by the resignation or retirement of union members be filled in
by recommendees of the union; (5) Santos was recommended by the union to fill
the vacancy created by the resignation of Carlos Abelardo. With these
antecedents, it is not at all far-fetched to conclude, as did the trial court, that
because of the activities of Santos, joined in by the union, Rueda would not only
oppose the appointment of Santos as permanent guard, but would also work for
his dismissal. Hence, the harassment of the investigation and the pretext of the
affected ear. It is uncontradicted that when examined by private specialists in
February and March, 1955, Santos' left ear was found to be normal. (Exhs. B and
C).
It is urged for the company that the differences between Santos and Col. Rueda
were purely personal and did not concern the company, and that there was no
evidence of hostility between the management and the union or any of its
members. It can not be gainsaid, however, that the acts of Col. Rueda,
constituting an unfair labor practice, while may have been prompted by personal
motives, were executed in his capacity as Security Officer of the company and in
the course of his duties. In dismissing the complainant, with full knowledge of the
actuations of Col. Rueda and the circumstances of Santos' case, the petitioner
company in effect ratified the acts of Col. Rueda complained of and,
consequently, became liable therefore.[2]
Taking together these attendant circumstances and the joint activities of Santos
and the union, the trial court, we believe, was justified in concluding that the
herein petitioners committed unfair labor practice against herein respondent
Santos in discharging him.
"It has previously been indicated that an employer may treat freely with an
employee and is not obliged to support his actions with a reason or purpose.
However, where the attendant circumstances, the history of the employer's past
conduct and like considerations, coupled with an intimate connection between
the employer's action and the union affiliations or activities of the particular
employee or employees taken as a whole raise a suspicion as to the motivation for
the employer's action, the failure of the employer to ascribe a valid reason
therefor may justify an inference that his unexplained conduct in respect of the
particular employee or employees was inspired by the latter's union membership
or activities. While the presence of this mere suspicion neither takes the place of
evidence that the employer's conduct was improperly motivated nor dispenses
with the requirement of proof of the fact, such suspicion, when coupled with
other facts which, in themselves, might have been inadequate to support an
adverse finding against the employer, may suffice to sustain a finding that the
employer's actions violated the prohibition of the Act." (Rothenberg on Labor
Relations, pp. 401-402, and the cases cited therein.)
Error 4. We find this to be meritorious.
The records show that Santos was employed as temporary guard, on and off for
short durations between December 16, 1952 and February 3, 1955. On the date of
his separation from the service, he was still occupying the position of temporary
guard. There is no question that, having been the subject of unfair labor practice,
Santos is entitled to reinstatement. However, the company can not be required to
appoint said dismissed employee to a position which he had not previously
occupied. Reinstatement, in its generally accepted sense, refers to 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[3] Santos, therefore, should be ordered
reinstated to his former position of temporary guard.
With this modification, the appealed decision and confirmatory resolution of the
court a quo are hereby affirmed, without costs. So ordered.
NOCON, J.:
This is a petition for certiorari seeking reversal of the resolution of public respondent
National Labor Relations Commission dated November 29, 1990, in NLRC Case No. 01-
04-0056-89, which affirmed in toto the decision of the Labor Arbiter dated February 28,
1990.
Private respondents Dangwa Bentrez, Roland Picart, Apollo Ribaya, Sr., Ruperta Ribaya,
Virginia Boado, Cecilia Emocling, Jane Bentrez, Leila Dominguez, Rose Ann Bermudez
and Lucia Chan were all employed as teachers on probationary basis by petitioner Pines
City Educational Center, represented in this proceeding by its President, Eugenio Baltao.
With the exception of Jane Bentrez who was hired as a grade school teacher, the
remaining private respondents were hired as college instructors. All the private
respondents, except Roland Picart and Lucia Chan, signed contracts of employment with
petitioner for a fixed duration. On March 31, 1989, due to the expiration of private
respondents' contracts and their poor performance as teachers, they were notified of
petitioners' decision not to renew their contracts anymore.
On April 10, 1989, private respondents filed a complaint for illegal dismissal before the
Labor Arbiter, alleging that their dismissals were without cause and in violation of due
process. Except for private respondent Leila Dominguez who worked with petitioners for
one semester, all the other private respondents were employed for one to two years. They
were never informed in writing by petitioners regarding the standards or criteria of
evaluation so as to enable them to meet the requirements for appointment as regular
employees. They were merely notified in writing by petitioners, through its Chancellor,
Dra. Nimia R. Concepcion, of the termination of their respective services as of March 31,
1989, on account of their below-par performance as teachers.
For their part, petitioners contended that private respondents' separation from
employment, apart from their poor performance, was due to the expiration of the periods
stipulated in their respective contracts. In the case of private respondent Dangwa
Bentrez, the duration of his employment contract was for one year, or beginning June,
1988 to March, 1989 whereas in the case of the other private respondents, the duration
of their employment contracts was for one semester, or beginning November, 1988 to
March 1989. These stipulations were the laws that governed their relationships, and
there was nothing in said contracts which was contrary to law, morals, good customs and
public policy. They argued further that they cannot be compelled to enter into new
contracts with private respondents. They concluded that the separation of private
respondents from the service was justified.
On February 28, 1990, the Labor Arbiter rendered judgment in favor of private
respondents, the dispositive portion of which reads:
Complainants' claims for indemnity pay, premium pay for holidays and rest days, illegal
deduction, 13th month pay and underpayment are hereby DENIED for lack of merit.
SO ORDERED."[1]
In support of this decision, the Labor Arbiter rationalized that the teacher's contracts[2]
are vague and do not include the specific description of duties and assignments of private
respondents. They do not categorically state that there will be no renewal because their
appointments automatically terminate at the end of the semester. Petitioners did not
present any written evidence to substantiate their allegation that the Academic
Committee has evaluated private respondents' performance during their one semester
employment. On the contrary, they were hastily dismissed.
On appeal to the National Labor Relations Commission, the decision was affirmed in
toto in its resolution dated November 29, 1990, with the additional reasoning that "the
stipulation in the contract providing for a definite period in the employment of
complainants is obviously null and void, as such stipulation directly assails the
safeguards laid down in Article 280 (of the Labor Code),[3] which explicitly abhors the
consideration of written or oral agreements pertaining to definite period in regular
employment."[4] Hence, the present petition for certiorari with prayer for the issuance
of a temporary restraining order.
As prayed for, this Court issued a temporary restraining order on March 11, 1991,
enjoining respondents from enforcing the questioned resolution.[5]
Petitioners raise this sole issue: "THAT THERE IS PRIMA FACIE EVIDENCE OF
GRAVE ABUSE OF DISCRETION ON THE PART OF THE LABOR ARBITER BY
WANTONLY, CAPRICIOUSLY AND MALICIOUSLY DISREGARDING PROVISIONS OF
LAW AND JURISPRUDENCE LAID DOWN IN DECISIONS OF THE HONORABLE
SUPREME COURT."[6]
Petitioners reiterate their previous arguments, relying heavily in the case of Brent
School, Inc., et al. v. Zamora, et al.[7]
It is quite easy to resolve the present controversy because the Brent case, which is a
product of extensive research, already provides the answer. We were categorical therein
that:
"Accordingly, and since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly appears to have been, as
already observed, to prevent circumvention of the employees right to be secure in his
tenure, the clause in said article indiscriminately and completely ruling out all written or
oral agreements conflicting with the concept of regular employment as defined therein
should be construed to refer to the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of tenure. It should have no
application to instances where a fixed period of employment was agreed upon knowingly
and voluntarily 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 where it satisfactorily appears that the employer and employee dealt with
each other on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. Unless thus limited in its purview, the law would
be made to apply to purposes other than those explicitly stated by its framers; it thus
becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and
unintended consequences."(Underscoring supplied.)
This ruling was reiterated in Pakistan International Airlines Corporation v. Ople, etc., et
al.[8] and La Salette of Santiago, Inc. v. NLRC, et al.[9]
Insofar as the private respondents who knowingly and voluntarily agreed upon fixed
periods of employment are concerned, their services were lawfully terminated by reason
of the expiration of the periods of their respective contracts. These are Dangwa Bentrez,
Apollo Ribaya, Sr., Ruperta Ribaya, Virginia Boado, Cecilia Emocling, Jose Bentrez, Leila
Dominguez and Rose Ann Bermudez. Thus, public respondent committed grave abuse of
discretion in affirming the decision of the Labor Arbiter ordering their reinstatement and
payment of full backwages and other benefits and privileges.
With respect to private respondents Roland Picart and Lucia Chan, both of whom did not
sign any contract fixing the periods of their employment nor to have knowingly and
voluntarily agreed upon fixed periods of employment, petitioners had the burden of
proving that the termination of their services was legal. As probationary employees, they
are likewise protected by the security of tenure provision of the Constitution.
Consequently, they cannot be removed from their positions unless for cause.[10] On the
other hand, petitioners contended that based on the evaluation of the Academic
Committee their performance as teachers was poor. The Labor Arbiter, however, was not
convinced. Thus, he found as follows:
"Respondents likewise aver that the Academic Committee has evaluated their
performance during their one semester employment (see Annexes "M" to "X" of
complainants' position paper). However, they did not present any written proofs or
evidence to support their allegation.[11]
"xxx.
"There is absolutely nothing in the record which will show that the complainants were
afforded even an iota of chance to refute respondents' allegations that the complainants
did not meet the reasonable standards and criteria set by the school. x x x."[12]
We concur with these factual findings, there being no showing that they were resolved
arbitrarily.[13] Thus, the order for their reinstatement and payment of full backwages
and other benefits and privileges from the time they were dismissed up to their actual
reinstatement is proper, conformably with Article 279 of the Labor Code, as amended by
Section 34 of Republic Act No. 6715,[14] which took effect on March 21, 1989.[15] It
should be noted that private respondents Roland Picart and Lucia Chan were dismissed
illegally on March 31, 1989, or after the effectivity of said amendatory law. However, in
ascertaining the total amount of backwages payable to them, we go back to the rule prior
to the Mercury Drug rule[16] that the total amount derived from employment elsewhere
by the employee from the date of dismissal up to the date of reinstatement, if any, should
be deducted therefrom.[17] We restate the underlying reason that employees should not
be permitted to enrich themselves at the expense of their employer.[18] In addition, the
law abhors double compensation.[19] To this extent, our ruling in Alex Ferrer, et al. v.
NLRC, et al., G.R. No. 100898, promulgated on July 5, 1993, is hereby modified.
Public respondent cannot claim not knowing the ruling in the Brent case because in its
questioned resolution, it stated that one of the cases invoked by petitioners in their
appeal is said case.[20] This notwithstanding, it disregarded Our ruling therein without
any reason at all and expressed the erroneous view that:
"The agreement of the parties fixing a definite date for the termination of the
employment relations is contrary to the specific provision of Article 280. Being contrary
to law, the agreement cannot be legitimized. x x x."[21]
Stare decisis et non quieta movere. Once a case has been decided one way, then another
case, involving exactly the same point at issue, should be decided in the same manner.
Public respondent had no choice on the matter. It could not have ruled in any other way.
This Tribunal having spoken in the Brent case, its duty was to obey.[22] Let it be warned
that to defy its decisions is to court contempt.[23]
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo,
Quiason, and Vitug, JJ., concur.
Puno, J., joins J. Padilla on his separate opinion.
Griño-Aquino, J., retired on October 22, 1993.
LESSON
Art. 298. [283] Closure of Establishment and Reduction of Personnel. – The employer
may also terminate the employment of any employee due to the installation of labor-
saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay equivalent
to at least his one (1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case 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, the separation pay shall be equivalent to one (1) month pay
or at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered as one (1) whole year.
In case the CBA or company policy provides for a higher separation pay, the same must
be followed instead of the one provided in Article 283. (Chan. The Labor Code of the
Philippines Annotated – Volume II).
Art. 299. [284] Disease as a Ground of Termination – An employer may terminate the
services of an employee who has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial to his health as well as to the
health of his co-employees: Provided, That he is paid separation pay equivalent to at
least one (1) month salary or to one-half (1/2) month salary for every year of service,
whichever is greater, a fraction of at least six (6) months being considered as one (1)
whole year.
Separation pay as financial assistance in legal dismissal under art. 282
The basis of the grant of financial assistance is equity. (Chan. The Labor Code of the
Philippines Annotated – Volume II).
An employee who is dismissed for just cause is generally not entitled to separation pay. A
reading of Art. 279 in relation to Art. 282 of the Labor Code, reveals that an employee
who is dismissed for cause after appropriate proceedings in compliance with due process
requirements is not entitled to an award of separation pay. In some cases however, the
SC awarded separation pay to a legally dismissed employee on the grounds of equity and
social justice. This is not allowed though when the employee has been dismissed for
serious misconduct or some other causes reflecting on his moral character or personal
integrity. (Etcuban, Jr. v. Sulpicio Lines, Inc. G.R. No. 148410, Jan. 17, 2005, among
others).
If reinstatement is no longer possible, the employer has the alternative of paying the
employee his separation pay in lieu of reinstatement. (Manila Water Co, Inc. v. Pena,
G.R. No. 158255, Jul. 8, 2004).
In Deguzman v. NLRC, [G.R. No. 167701, Dec. 12, 2007], and in several other earlier
cases, where the employee explicitly prayed for an award of separation pay in lieu of
reinstatement, it was held that by so praying, he forecloses reinstatement as a relief by
implication. Consequently, he is entitled to separation pay equivalent to one month pay
for every year of services, computed from the time of his illegal dismissal up to the
finality of the judgement, as an alternative to reinstatement.
The amount of separation pay that should be paid in lieu of reinstatement is not
provided in the Labor Code or its implementing rules. Jurisprudence, however, dictates
that the following should be included in its computation:
The amount equivalent to at least one (1) month salary or to one (1) month salary for
every year of services, whichever is higher, a fraction of at least six (6) months being
considered as one (1) whole year. (Sec. 4[b], Rule I, Book VI, Rules to Implement the
Labor Code).
Allowances that the employee has been receiving on a regular basis. (Planters Products,
Inc. v. NLRC, G.R. No. 78524, Jan. 20, 1989).
Employers may lawfully and effectively reduce their personnel by offering resignation
benefits through a Voluntary Resignation Program where employees are afforded the
right to voluntarily terminate the employment relationship. If made in good faith, such
as scheme should be considered a valid form of terminating employment. Consequently,
the employer need not comply with the requirement under Article 283 of the Labor Code
that notice be sent to the Department of Labor and Employment at least a month prior to
the effectivity of the termination of employment. The reason is that by applying to
voluntarily resign, the employee thereby acknowledges the existence of a valid cause for
terminating his employment. (Dole Philippines Inc. v. NLRC, G.R. No. 120009, Sept. 13,
2001; International Hardware, Inc. v. NLRC, G.R. No. 80770, Aug. 10, 1989).
BACKWAGES
Separation pay in lieu of reinstatement and backwages are two different things. Payment
of separation pay is not inconsistent with payment of backwages. (Cabatulan v. Buat,
G.R. No. 147142, Feb. 14, 2005).
Separation pay is paid when reinstatement is not possible; while backwages are paid for
the compensation which otherwise the employee should have earned had he not been
illegally dismissed. (Equitable Banking Corp. v. Sadac, G.R. No. 164772, June 8, 2006).
Separation pay is paid where a wherewithal during the period that an employee is
looking for another employment; while backwages are paid for the loss of earnings
during the period between illegal dismissal and reinstatement. (Quebec, Sr. v. NLRC,
G.R. No. 123184, Jan. 22, 1999).
Separation pay is oriented towards the immediate future; while backwages involve the
restoration of the past income lost. (Lopez, Jr. v. NLRC, G.R. No. 109166, Jul. 6, 1995).
Separation pay cannot be paid in lieu of backwages. (Torillo v. Leogardo, G.R. No. 77205,
May 27, 1991).
Case Digest: Bustamante vs NLRC, G.R. No. 111651 March 15, 1996
Facts – Petitioners were hired for the same job on various periods – broken employment
or services were not continuous – but the services rendered when added together
comprise over a year of service in total. Respondent company and petitioner signed a 6-
month contract but petitioners were fired earlier than what was stipulated in the contract
on the grounds of poor performance due to old age.
Petitioner filed a complaint before the Regional Arbitration Branch of the National Labor
Relations Commission (NLRC) in Davao City.
First Decision of NLRC: In favour of petitioner; their dismissal by respondent company
was declared illegal; ordering respondent company to reinstate the petitioner employees
and pay for their 6 months backwages. If reinstatement is not possible, an additional
compensation equivalent to 1 month salary must be given to the petitioners. Petitioners’
claim for underpayment was dismissed for lack of merit.
Appeal of Respondent: the respondent Evergreen Farms Inc. made an appeal but was
dismissed by NRLC. It again filed a motion for reconsideration and this time the decision
of NLRC was favourable to the respondent company, “public respondent issued a second
resolution on 3 May 1993 affirming its earlier resolution on illegal dismissal but deleting
the award of backwages on the ground that the termination of petitioners' employments
"was the result of the latter's (private respondent) mistaken interpretation of the law and
that the same was therefore not necessarily attended by bad faith, nor arbitrariness”
Action (case at bar before the Supreme Court) – petition for certiorari, from the decision
of NLRC –after appeal from respondent company—setting aside its previous decision to
provide petitioners backwages.
Issue - whether or not petitioners (employees of the banana plantation) are entitled to
backwages after a finding by the NLRC itself that they had become regular employees
after serving for more than one (1) year of broken or non-continuous service as
probationary employees.
Ruling – In favour of petitioner, upholding their illegal dismissal invoking Article 280 of
the Labor Code which draws a line between regular and casual employment. The regular
employees consist of the following:
1) those engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer; and
2) those who have rendered at least one year of service whether such service is
continuous or broken.
In the case at bar, petitioners were employed at various periods from 1985 to 1989 for
the same kind of work they were hired to perform in September 1989. Some of the
petitioners were hired as far back as 1985, although the hiring was not continuous. They
were hired and re-hired in a span of from two to four years to do the same type of work
which conclusively shows the necessity of petitioners' service to the respondent
company's business.
Bases of Court decision:
Petitioners have, therefore, become regular employees after performing activities which
are necessary in the usual business of their employer. But, even assuming that the
activities of petitioners in respondent company's plantation were not necessary or
desirable to its business, we affirm the public respondent's finding that all of the
complainants (petitioners) have rendered non-continuous or broken service for more
than one (1) year and are consequently considered regular employees.
The act of hiring and re-hiring the petitioners over a period of time without considering
them as regular employees evidences bad faith on the part of private respondent.
WHEREFORE, the Resolution of the National Labor Relations Commission dated 3 May
1993 is modified in that its deletion of the award for backwages in favor of petitioners, is
SET ASIDE. The decision of the Labor Arbiter dated 26 April 1991 is AFFIRMED with
the modification that backwages shall be paid to petitioners from the time of their illegal
dismissal on 25 June 1990 up to the date of their reinstatement. If reinstatement is no
longer feasible, a one-month salary shall be paid the petitioners as ordered in the labor
arbiter's decision; in addition to the adjudged backwages.
NOCON, J.:
As succinctly summarized by the Office of the Solicitor General, the facts of the case are
as follows:
"Complainant, in his position paper and supplemental position paper, avers that he was
employed by the respondent company as a conductor since 1967. He was paid on
percentage basis and received a commission of about P40.00 to P50.00 a day. Sometime
in 1985, complainant further alleges that he had an accident, which burned his body
partially necessitating his hospitalization for several days. After hospitalization,
complainant reported to respondent Josefina Alon-Alon Mercado, in compliance with
the letter dated May 20, 1986 of the respondent ordering him to immediately report for
work, but was told to wait. For several days he kept on reporting but the Operations
Manager just kept promising to give him a route assignment which did not materialize.
Finally, complainant was able to talk to respondent Joselito Medrano who told him that
he will be accepted back to work as a new employee. Complainant rejected the offer since
it would mean losing his eighteen (18) years of service with the respondents. Because of
his refusal, he was allegedly told in the presence of some other employees: "Balik ka pa
ng balik. Ang kapal naman ng mukha mo." Feeling aggrieved, complainant instituted the
present complaint charging the respondents with illegal dismissal, unfair labor practice,
non-payment of overtime pay, legal holiday pay and violations of Presidential Decrees
No. 525 and 851.
Respondents, in its position paper contend that in 1986, complainant, for unknown
reasons, failed to report for work for about a month. No notice was given to the company
for such continued absence. On May 20, 1986, respondent company, thru its Personnel
Manager, Joselito Medrano sent a letter to the complainant advising him to immediately
report for work, otherwise, his continued absence will be construed as a ground for his
dismissal and separation from the service. Respondents further alleged that complainant
failed to respond to its demand that he immediately report for work, hence, they filed a
termination report with the Ministry of Labor on June 4, 1986, terminating the services
of the complainant for 'AWOL' (Absent Without Official Leave)."[3]
After hearing, the Executive Labor Arbiter rendered judgment "in favor of complainant
and against respondents ordering the latter to pay complainant separation pay
equivalent to one-half (1/2) the average daily commission per every year of service, in the
amount of TWELVE THOUSAND ONE HUNDRED FIFTY PESOS (P12,150.00)
computed as follows: (P45.00 x 30 = P1350.00 ÷ 2 = P675 x 18 = P12,150.00)."[4]
On appeal by both parties, the respondent NLRC (First Division) set aside the Labor
Arbiter's decision and ordered therein respondent (herein petitioner) "to pay the
complainant limited backwages of six (6) months without qualification and deduction,
and separation pay equivalent to one-half (1/2) of his average monthly commission per
each year of service in the amount of Twelve Thousand One Hundred Fifty (P12,150.00)
Pesos computed as follows: (P45.00 x 30 = P1,350.00 ÷ 2 = P675 x 18 = P12,150.00)."[5]
Thus, this petition where petitioner claims that public respondent NLRC acted in excess
of jurisdiction and/or gravely abused its discretion (1) in affirming the Labor Arbiter's
finding that private respondent is physically unfit to work and consequently entitled to
separation pay; and (2) in adopting the Labor Arbiter's finding pegging at '30' private
respondent's average working days per month.
I
"There was no controversy on the aspect of private respondent physical fitness for work;
therefore, as a matter of course, such inexistent controversy was never brought before
the Labor Arbiter for adjudication. In view of the foregoing, the Labor Arbiter was bereft
of 'judicial power' to rule motu propio that private respondent was not physically
capacitated to work. x x x."[6]
Private respondent, however, counters that such ruling "was or may have been done in
good faith and without malice on the part of Labor Arbiter Guevarra."[7]
Petitioner is correct.
Executive Labor Arbiter Alvarez held that private respondent was constructively
dismissed,[8] i.e., he was illegally dismissed, when, after petitioner informed private
respondent that if he wanted to work again with petitioner, he would have to start as a
new employee, private respondent, considering his 18 years of service with petitioner,
refused to start anew. Executive Labor Arbiter Alvarez, reasoned out as follows:
"[W]e are, however, of the considered view and we hold that complainant was
constructively dismissed. Notified in writing that complainant would lose his job for
abandonment if he fails to return, complainant reported for work only to be refused
because respondent wanted him to be hired as a new employee. Naturally, complainant
had to object considering that his length of service had already run for 18 years. What we
are saying is that complainant had signified his intention to return to his job, and,
abandonment is negated when the employee manifests his intention to return to his job.
Moreover, after working for 18 years, we find it difficult to believe that he would abandon
his job more so that he is married and job nowadays is difficult to find."[9]
Private respondent's re-employment as a new employee would be very prejudicial to him
as it would mean a demotion in rank and privileges, retirement benefits, for example, as
his entire previous eighteen (18) years of service with petitioner, would simply be
considered as non-existent.
But instead of resolving whether petitioner accorded private respondent due process in
constructively dismissing him[10] Executive Labor Arbiter Alvarez, however, ruled in
this wise:
"It appears, however, on record that complainant is suffering from heart ailment which,
on two occasions, was the reason for canceling the scheduled hearings or conciliation.
Thus, on July 21, 1986 and on August 5, 1986, complainant manifested to have the
setting transferred to another date because he (complainant) is suffering from heart
ailment.
We have perused the record and we found no medical certificate attesting to his fitness to
return to his work as indicated in position paper. Complainant's termination, therefore,
would be justified under Article 285 of the Labor Code as amended, which provides:
'An employer may terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is prohibited by law or is
prejudicial to his health as well as to the health of his co-employees; Provided, That he is
paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month
salary for every year of service, whichever is greater, a fraction of at least six (6) months
being considered as one (1) whole year.'"[11]
which ratiocination was glaringly off-tangent to the issue posed before him.
Clearly, petitioner has a valid reason to gripe. We cannot, however, order the
reinstatement of private respondent with petitioner as relations between the two are now
strained[12] after private respondent was humiliated and embarrassed by petitioner's
Mr. Medrano when he tried to report back to work.[13]
II
The 'P45.00' pertains to private respondent's average daily pay while the '30' to his
supposed average working days per month. The Honorable Arbiter duly established the
basis for the 'P45.00' as follows:
'Since as aforesaid complainant was paid on percentage basis and that he earned
between P40.00 to P50.00 daily the computation of his separation would be based on
the average commission per day of forty-five (P45.00) pesos a day.' (p. 5, Decision)
But he failed to do so in regard to the '30'. A careful perusal of his Decision (Annex 'B')
reveals that nowhere therein has reference ever been made to the average working days
per month of private respondent. The reason is simply that the parties completely
overlooked the matter during the proceeding. No allegation was made let alone evidence
introduced thereon.
xxxxxxxxx
The maximum number of working days per month of private respondent was only eleven
(11). The Certification attached to private respondent's NLRC Appeal as Annex 'B-2'
thereof (copy of said Appeal together with cited annex attached as Annex "D" hereof),
reveals that for the period from January 1984 to March 1896, i.e, two (2) years prior to
his dismissal, the maximum amount of his SSS premium payment was P35.70 pertaining
to the month March 1985. Under the SSS Table of Rates, copy attached as Annex "E"
hereof, which this Honorable Court may take judicial notice of, it is shown in the portion
bracketed as Annex "E-1" that premium payment of P35.70 corresponds to a monthly
salary wage bracket of 'P350.00 - P499.99'. The implication is that the maximum
monthly commission pay that private respondent received during his last two (2) years of
employment with petitioner was P499.99. As his average daily commission pay was
P45.00, it means that his maximum working days per month was eleven (11) days which
is arrived at by simply dividing P499.99 by P45.00.
III
Following the general rule that where the illegal dismissal transpired before the
effectivity of RA 6715, or before March 21, 1989, the award of backwages in favor of its
dismissed employee is limited to three (3) years without deduction or qualification,[18]
this Court grants private respondent three (3) years backwages.
Both awards,[20] to be computed on the basis of a 30-day month, will come out as
follows:
(1) Three Years Backwages = P45.00/day x 30 days/month x 12 months/year x 3 years
= P48,600.00.
(2) Separation pay for Eighteen Years = P45.00/day x 30days/months x 18 months =
P24,300.00.
WHEREFORE, in view of all the foregoing, judgment is hereby rendered SETTING
ASIDE the questioned respondent NLRC's decision. A new decision is entered where
private respondent is awarded three years backwages in the amount of P48,600.00 and
separation pay in the amount of P24,300.00. Costs against petitioner.
SO ORDERED.