CASE #235

UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES

UNIONS - KILUSANG MAYO UNO (UFE-DFA-KMU), Petitioner, versus NESTLE
PHILIPPINES, INCORPORATED, Respondent.
G.R. No. 158930-31 | 2008-03-03

CHICO-NAZARIO, J.:

ISSUE: Whether or not refusal to bargain on a very important CBA economic provision constitute unfair
labor practice when Nestle insisted that Union should first agree that the Retirement plan is not a
bargaining issue before Nestle would agree to discuss other issues on the CBA.

HELD:

No. The purpose of collective bargaining is the reaching of an agreement resulting in a contract binding
on the parties; but the failure to reach an agreement after negotiations have continued for a reasonable
period does not establish a lack of good faith. The statutes invite and contemplate a collective
bargaining contract, but they do not compel one. The duty to bargain does not include the obligation to
reach an agreement.

The crucial question, therefore, of whether or not a party has met his statutory duty to bargain in good
faith typically turns on the facts of the individual case. As we have said, there is no per se test of good
faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts. To some degree,
the question of good faith may be a question of credibility. The effect of an employer's or a union's
individual actions is not the test of good-faith bargaining, but the impact of all such occasions or actions,
considered as a whole, and the inferences fairly drawn therefrom collectively may offer a basis for the
finding of the NLRC.
CASE #247

SAMAHAN NG MGA MANGGAGAWA SA HYATT (SAMASAH-NUWHRAIN),

PETITIONER, VS. HOTEL ENTERPRISES OF THE PHILIPPINES, INC.,
RESPONDENT.
G.R. No. 164939 | 2011-06-06

VILLARAMA, JR., J.:

ISSUE:

Whether or not he Court of Appeals erred in deleting the award of Financial Assistance in the amount of
p100,000.00 to Angelito Caragdag on the ground that dismissal was due to serious misconduct.

CASE #247

HELD:

No. The grant of separation pay or some other financial assistance to an employee dismissed for just
causes is based on equity.[29] In Phil. Long Distance Telephone Co.v. NLRC, we ruled that severance
compensation, or whatever name it is called, on the ground of social justice shall be allowed only when
the cause of the dismissal is other than serious misconduct or for causes which reflect adversely on the
employee's moral character.

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow
worker, the employer may not be required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social justice.

Indeed, if the employee who steals from the company is granted separation pay even as he is validly
dismissed, it is not unlikely that he will commit a similar offense in his next employment because he
thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is not
going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not
deserve the protection and concern of the Constitution.

The policy of social justice is not intended to countenance wrongdoing simply because it is committed
by the underprivileged.
CASE #259

TOYOTA MOTORS PHILIPPINES CORPORATION LABOR UNION, petitioner, vs.

TOYOTA MOTOR PHILIPPINES CORPORATION EMPLOYEES AND WORKERS
UNION, TOYOTA MOTOR PHILIPPINES CORPORATION, and THE SECRETARY OF
LABOR AND EMPLOYMENT, respondents.
G.R. No. 135806 | 2002-08-08

BELLOSILLO, J.:

ISSUE: Whether or not respondent union was in possession of the status of a legitimate labor
organization at the time of filing, when, as petitioner vigorously claims, the former was still at the stage
of processing of its application for recognition as a legitimate labor organization where the union is
composed of supervisory and rank-and-file employees.

HELD:

No. The union's composition being in violation of the Labor Code's prohibition of unions composed of
supervisory and rank-and-file employees, it could not possess the requisite personality to file for
recognition as a legitimate labor organization.

Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees. Managerial employees are not eligible to join, assist, or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organization of their own.

Therefore, time of filling renders entirely irrelevant.

CASE #271

SIME DARBY PILIPINAS, INC., petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION (2ND DIVISION) and SIME DARBY SALARIED EMPLOYEES
ASSOCIATION (ALU-TUCP), respondents.
G.R. No. 119205 | 1998-04-15

BELLOSILLO, J:

ISSUE : Whether or not whether the change of work schedule and elimination of the 30-minute paid
lunch break of the factory workers, which management deems necessary to increase production,
constituted a valid exercise of management prerogative.

HELD:

Yes. The right to fix the work schedules of the employees’ rests principally on their employer.

Every business enterprise endeavor to increase its profits. In the process, it may devise means to attain
that goal. Even as the law is solicitous of the welfare of the employees, it must also protect the right of
an employer to exercise what are clearly management prerogatives. Thus, management is free to
regulate, according to its own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work, processes to be followed,
supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers
and discipline, dismissal and recall of workers. Further, management retains the prerogative, whenever
exigencies of the service so require, to change the working hours of its employees. So long as such
prerogative is exercised in good faith for the advancement of the employer's interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold such exercise.
CASE #283

CHINA BANKING CORPORATION, Petitioner, versus MARIANO M. BORROMEO,

Respondent.
G.R. No. 156515 | 2004-10-19

CALLEJO, SR., J.:

ISSUE:

Whether or not respondent pledged his property to the bank and proposed the withholding of his separation
pay and benefits in acknowledgement of the serious infraction he committed against the bank being that it is
violative of the Bank’s Code Ethics.

HELD:

Yes. The respondent was a responsible officer of the petitioner Bank; by his own admission, he granted
DAUD/BP accommodations in excess of the authority given to him and in violation of the bank's standard
operating procedures; the petitioner Bank's Code of Ethics provides that restitution/forfeiture of benefits
may be imposed on the employees for, inter alia, infraction of the bank's standard operating procedures.

Reprimand/Suspension," the latter's Code of Ethics expressly sanctions the imposition of

restitution/forfeiture of benefits apart from or independent of the other penalties. Obviously, in view of his
voluntary separation from the petitioner Bank, the imposition of the penalty of reprimand or suspension
would be futile. The petitioner Bank was left with no other recourse but to impose the ancillary penalty of
restitution. It was certainly within the petitioner Bank's prerogative to impose on the respondent what it
considered the appropriate penalty under the circumstances pursuant to its company rules and regulations.

On the other hand, the petitioner Bank's business is essentially imbued with public interest and owes great
fidelity to the public it deals with. It is expected to exercise the highest degree of diligence in the selection
and supervision of their employees. As a corollary, and like all other business enterprises, its prerogative to
discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules
and regulations must be respected. The law, in protecting the rights of labor, authorized neither oppression
nor self-destruction of an employer company which itself is possessed of rights that must be entitled to
recognition and respect.
CASE #295

J.A.T. GENERAL SERVICES and JESUSA ADLAWAN TOROBU, petitioners, vs.

NATIONAL LABOR RELATIONS COMMISSION and JOSE F. MASCARINAS,
respondents.
G.R. No. 148340 | 2004-01-26
D E C I S I O N QUISUMBING, J.:

ISSUE:

1. Whether or not private respondent was illegally dismissed from employment due to closure of
petitioners' business.
2. Whether or not private respondent is entitled to separation pay, backwages and other monetary
awards.

HELD:

A brief discussion on the difference between retrenchment and closure of business as grounds for
terminating an employee is necessary. While the Court of Appeals defined the issue to be the validity of
dismissal due to alleged closure of business, it cited jurisprudence relating to retrenchment to support its
resolution and conclusion. While the two are often used interchangeably and are interrelated, they are
actually two separate and independent authorized causes for termination of employment. Termination of an
employment may be predicated on one without need of resorting to the other.

Closure of business, on one hand, is the reversal of fortune of the employer whereby there is a complete
cessation of business operations and/or an actual locking-up of the doors of establishment, usually due to
financial losses. Closure of business as an authorized cause for termination of employment aims to prevent
further financial drain upon an employer who cannot pay anymore his employees since business has already
stopped. On the other hand, retrenchment is reduction of personnel usually due to poor financial returns so
as to cut down on costs of operations in terms of salaries and wages to prevent bankruptcy of the company.
It is sometimes also referred to as down-sizing. Retrenchment is an authorized cause for termination of
employment which the law accords an employer who is not making good in its operations in order to cut
back on expenses for salaries and wages by laying off some employees. The purpose of retrenchment is to
save a financially ailing business establishment from eventually collapsing.

In the present case, we find the issues and contentions more centered on closure of business operation
rather than retrenchment.

In the present case, while petitioners did not sufficiently establish substantial losses to justify closure of the
business, its income statement shows declining sales in 1998, prompting the petitioners to suspend its
business operations sometime in March 1998, eventually leading to its permanent closure in December 1998.
Apparently, the petitioners saw the declining sales figures and the unsustainable business environment with
no hope of recovery during the period of suspension as indicative of bleak business prospects, justifying a
permanent closure of operation to save its business from further collapse. On this score, we agree that undue
interference with an employer's judgment in the conduct of his business is uncalled for. Even as the law is
solicitous of the welfare of employees, it must also protect the right of an employer to exercise what is
clearly a management prerogatives. As long as the company's exercise of the same is in good faith to advance
its interest and not for the purpose of defeating or circumventing the rights of employees under the law or a
valid agreement such exercise will be upheld.

2. No. In the event, under Article 283 of the Labor Code, three requirements are necessary for a valid
cessation of business operations, namely: (a) service of a written notice to the employees and to the DOLE at
least one (1) month before the intended date thereof; (b) the cessation of business must be bona fide in
character; and (c) payment to the employees of termination pay amounting to at least one-half (1/2) month
pay for every year of service, or one (1) month pay, whichever is higher.[25]

Considering that private respondent was not illegally dismissed, however, no backwages need to be awarded.
Backwages in general are granted on grounds of equity for earnings which a worker or employee has lost due
to illegal dismissal.[31] It is well settled that backwages may be granted only when there is a finding of illegal
dismissal.
ROBERTO SEGISMUNDO and ROGELIO MONTALVO, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION (Second Division) and ASSOCIATED FREIGHT
CONSOLIDATORS INC., respondents.
G.R. No. 112203 | 1994-12-13

BIDIN, J.:

ISSUE:

Whether or not an employee can be validly dismissed without conducting due process hearing when the
employees conduct is fully supported by investigation and with sufficient cause therefor.

HELD:

No. Proof beyond reasonable doubt of the employee's misconduct is not required, it being sufficient
that there is some basis for the same or that the employer has reasonable ground to believe that the
employee is responsible for the misconduct, and his participation therein renders him unworthy of the
trust and confidence demanded by his position.

However, we find that petitioners were dismissed from employment without being accorded due
process. As correctly observed by the Solicitor General, non-compliance with the twin requirements of
notice and hearing is fatal because these requirements are conditions sine qua non before a dismissal
may be validly effected (Manebo vs. NLRC, G.R. No. 107721, January 10, 1994, citing Tiu v. NLRC, 215
SCRA 540). Neither of these two requirements can be dispensed with without running afoul with the
due process requirement of the Constitution (Century Textile Mills, Inc. v. NLRC, 161 SCRA 528).