TOPIC: CASE TITLE: FACTS OF THE CASE ISSUE and RULING: Doctrine/ Other Remarks: ASSIGNED

Fundamental Principles in Labor law

A. Constitutional and Statutory Basis
1 Hongkong Bank FACTS: ISSUE: WON HSBC could validly enforce the credit-checking requirement Unilateral amendments to the CBA violate JUAN
1. Constitutional Independent union v. The BSP issued the Manual of Regulations for Banks (MoRB). Section X338 under its BSP-approved Plan in processing the salary loan applications of Article 253 of the Labor Code. The
provisions HSBC GR No. 218390; which states that Banks may provide financial assistance to their officers covered employees even when the said requirement is not recognized provisions of the CBA must be respected
Feb 28, 2018 and employees, as part of their fringe benefits program.Respondent under the CBA? since its terms and conditions constitute the
(HSBC), submitted its Financial Assistance Plan to the BSP for approval. law between the parties. And until a new
The Plan allegedly contained a credit checking proviso stating that RULING: NO. The basic law of the land guarantees the rights of workers CBA is executed by and between the parties,
"repayment defaults on existing loans and adverse information on outside to collective bargaining and negotiations as well as to participate in they are duty-bound to keep the status quo
loans will be considered in the evaluation of loan applications. petitioner policy and decision-making processes affecting their rights and benefits. and to continue in full force and effect the
Hongkong Bank Independent Labor Union (HBILU), entered into a CBA It is a well-entrenched rule that although jurisprudence recognizes the terms and conditions of the existing
with the bank. validity of the exercise by an employer of its management prerogative agreement. This finds basis under Article
and will ordinarily not interfere with such, this prerogative is not 253 of the Labor Code, which provides duty
During the said negotiations, HSBC proposed amendments to provisions absolute and is subject to limitations imposed by law, collective to bargain collectively when there exists a
in Salary Loan allegedly to align the wordings of the CBA with its bargaining agreement, and general principles of fair play and justice. collective bargaining agreement.
BSP-approved Plan. HBILU objected to the proposed amendments, Indeed, being a product of said constitutionally guaranteed right to
claiming that their insertions would curtail its members' availment of participate, the CBA is, therefore, the law between the parties and they
salary loans. This, according to the Union, violates the existing exceptions are obliged to comply with its provisions.
set forth in BSP Circular 423, Series of 2004, and Section X338.3 of the
MoRB. It is clear from the arguments and evidence submitted that the Plan was
never made part of the CBA. The subsequent implementation of the
Despite the withdrawal of the proposal, HSBC sent an e-mail to its Plan's external credit check provisions in relation to employee loan
employees concerning the enforcement of the Plan, including the Credit applications under Article XI of the CBA was then an imposition solely by
Checking provisions thereof. HBILU member Mananghaya applied for a HSBC. Thus, no other conclusion can be had in this factual milieu other
loan under the provisions of Article XI of the CBA. His first loan application than the fact that HSBC's enforcement of credit checking on salary loans
in March 2012 was approved, but adverse findings from the external under the CBA invalidly modified the latter's provisions thereon through
checks on his credit background resulted in the denial of his September the imposition of additional requirements which cannot be found
application. HBILU then raised the denial as a grievance issue with the anywhere in the CBA. If it were true that said credit checking under the
NCMB. It argued that the imposition of an additional requirement — the Plan covers salary loans under the CBA, then the bank should have
external credit checking prior to approval of any loan application under negotiated for its inclusion thereon as early as the April 1, 2010 to March
Article XI of the CBA — is not sanctioned under the CBA. 31, 2012 CBA which it entered into with HBILU.

However, the express provisions of said CBA inked by the parties clearly
make no reference to the Plan.HSBC never intended to apply the credit
checking item under the Plan to salary loans under the CBA. Otherwise,
it would have enforced such requirement from the moment the salary
loans provisions under the old CBA were implemented, which it did not.
2 University of FACTS: ISSUE(S): W/N the Secretary of Labor, after assuming jurisdiction over a While the Court recognizes the exercise of CISTER
Immaculate During the CBA negotiations between University and Union, the VA labor dispute involving an employer and the certified bargaining agent of management prerogatives and often
Concepcion v. Sec . of ordered the exclusion of some employees from the bargaining unit. This a group of employees in the workplace, may legally order said employer declines to interfere with the legitimate
Labor. GR 151379; led to the first strike by Union. Afterwards, Secretary of Labor assumed to reinstate employees terminated by the employer even if those business decisions of the employer, this
January 14, 2005 jurisdiction and ordered to maintain status quo. University then informed terminated employees are not part of the bargaining unit RATIO: privilege is not absolute but subject to
affected employees to choose whether to stay as their employees or leave University contends that the Secretary cannot take cognizance of an exceptions, such as when the Secretary of
the union. Employees chose to remain as both, hence, they were issue involving employees who are not part of the bargaining unit. It Labor assumes jurisdiction over labor
terminated. Because of this, they went on strike to which the Secretary of insists that since the individual respondents had already been excluded disputes involving industries indispensable
Labor affirmed its former order that University should reinstate the from the bargaining unit by a final and executory order by the panel of to the national interest.
employees until the dispute has been resolved. In another order, it voluntary arbitrators, then they cannot be covered by the Secretary’s
ordered payroll reinstatement instead of actual reinstatement due to the assumption order. One of the substantive evils which Article
current conditions between the parties. Hence, University went to the SC. 263(g) of the Labor Code seeks to curb is the
SC ruled in favor of Secretary of Labor saying that it acted properly HELD: The Court finds no merit in the University’s contention. In exacerbation of a labor dispute to the
because it sought to prevent exacerbation since if it intensifies, it will Metrolab Industries v. Roldan-Confessor, the Court declared that it further detriment of the national interest.
become detrimental to the national interest. recognizes the exercise of management prerogatives and it often Any act committed during the pendency of
declines to interfere with the legitimate business decisions of the the dispute that tends to give rise to further
employer. contentious issues or increase the tensions
between the parties should be considered
However, as expressed in PAL v. NLRC, this privilege is not absolute, but an act of exacerbation and should not be
subject to exceptions. One of these exceptions is when the Secretary of allowed
Labor assumes jurisdiction over labor disputes involving industries
indispensable to the national interest under Article 263(g) of the Labor
Code. This provision states:

(g) When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such assumption or certification
shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of
assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. x x x

When the Secretary of Labor ordered the University to suspend the

effect of the termination of the individual respondents, the Secretary did
not exceed her jurisdiction, nor did the Secretary gravely abuse the
same. It must be pointed out that one of the substantive evils which
Article 263(g) of the Labor Code seeks to curb is the exacerbation of a
labor dispute to the further detriment of the national interest.

It is clear that the act of the University of dismissing the individual

respondents from their employment became the impetus for the Union
to declare a second notice of strike. It is not a question anymore of
whether or not the terminated employees, the individual respondents
herein, are part of the bargaining unit. Any act committed during the
pendency of the dispute that tends to give rise to further contentious
issues or increase the tensions between the parties should be
considered an act of exacerbation and should not be allowed.
3 Jamer vs. NLRC, 278 FACTS: Complainant, Corazon Jamer was employed on February 10, 1976 ISSUE: Whether NLRC committed grave abuse of discretion in finding MICALLER
SCRA 632 as a Cashier at "Joy Mart," a sister company of Isetann. After two (2) that petitioners were validly dismissed on the ground of loss of trust and
years, she was later on promoted to the position of counter supervisor. confidence.
She was transferred to Isetann, Carriedo Branch, as a money changer. In
1982 she was transferred to the Cubao Branch of Isetann, as a money RULING: YES. Under the Labor Code, as amended, the requirements for
changer, till her dismissal on August 31, 1990. the lawful dismissal of an employee by his employer are two-fold: the
substantive and the procedural. Not only must the dismissal be for a
Complainant Cristina Amortizado, on the other hand, was employed also valid or authorized cause as provided by law (Articles 282, 283 and 284,
at "Joy Mart" in May, 1977 as a sales clerk. In 1980 she was promoted to of the Labor Code, as amended), but the rudimentary requirements of
the position as counter cashier. Thereafter, she was transferred to "Young due process, basic of which are the opportunity to be heard and to
Un Department Store" as an assistant to the money changer. Later on, or defend himself, must be observed before an employee may be
in 1985, she was transferred to Isetann, Cubao Branch where she worked dismissed.
as a Store Cashier till her dismissal on August 31, 1990.
Art. 282. Termination by Employer. — An employer may terminate an
Respondent Isetann Department Store on the other hand, is a corporation employment for any of the followings causes: (c) Fraud or willful breach
duly organized and existing under the laws of the Philippines and is by the employee of the trust reposed in him by his employer or duly
engaged in retail trade and the department store business. Individual authorized representative;
respondent, John Go is the President/General (Manager) of respondent
Department Store. it is crystal clear that the failure of petitioners to report the aforequoted
shortages and overages to management as soon as they arose resulted
This complaint arose from the dismissal of the complainants by the in the breach of the fiduciary trust reposed in them by respondent
respondents. They were both dismissed on August 31, 1990 on the company, thereby causing the latter to lose confidence in them. This
alleged ground of dishonesty in their work as Store Cashiers. They were warrants their dismissal.
both dismissed on the alleged ground of dishonesty for incurring a
shortage of P15,353.78. Moreover, it must be pointed out that herein petitioners have in fact
admitted the underpayment of P450.00 not only in their "Sinumpaang
Complainants were asked to explain and they submitted their respective Salaysay" but also during the hearing conducted before Labor Arbiter
written explanations for the shortage. Respondents placed both Pablo C. Espirutu. And, the record shows that the petitioners in fact
complainants under preventivesuspension for the alleged shortages. made a last ditch effort to conceal the same. Were it not for its timely
Thereafter, respondents conducted an administrative investigation. discovery by private respondents' trusted employees, the incident could
Finding the explanation of the complainants to be unsatisfactory, not have been discovered at all. Furthermore, it is worth stressing at this
respondent dismissed the complainants from the service. Aggrieved, juncture that the petitioners have also expressly admitted the shortage
complainant instituted this present action . The Labor Arbiter directed the of P15,353.78 — a substantial amount — in their respective sworn
respondents to reinstate complainants to service with full backwages and statements, and they were not able to satisfactorily explain such
without loss of seniority rights. Isetann and John Go appealed the shortage. The Court is convinced that these particular acts or omissions
aforesaid decision to the NLRC. The NLRC found that the complainants provided Isetann with enough basis to forfeit its trust and confidence
were validy dismissed for lack of confidence. over herein petitioners.

The NLRC, therefore, did not act with grave abuse of discretion in
declaring that petitioners were legally dismissed from employment. The
failure of petitioners to report to management the aforementioned
irregularities constitute "fraud or willful breach of the trust reposed in
them by their employer or duly authorized representative" — one of the
just causes in terminating employment as provided for by paragraph (c),
Article 282 of the Labor Code, as amended.

Thus, this Court has held time and again, in a number of decisions, that:
Loss of confidence is a valid ground for dismissing an employee and
proof beyond reasonable doubt of the employee's misconduct is not
required to dismiss him on this charge. It is sufficient if there is "some
basis" for such loss of confidence or if the employer has reasonable
ground to believe or to entertain the moral conviction that the employee
concerned is responsible for the misconduct and that the nature of his
participation therein rendered him absolutely unworthy of the trust and
confidence demanded by his position.
4 Gandara vs. NLRC, FACTS: Respondent Germano without notifying his employer, Milagros Sy RULING: Petitioner failed to discharge its burden of proof. The principle The doctrine of compassionate justice is YU
300 SCRA 702 (1998) owner of Gandara Mill did not report for work for 2 weeks. He chose to be of laches finds application here. In the Order, the respondent applicable under the premises, private
near his wife who was then about to deliver. Gandara Mill is a small Commission declared that failure to file a position paper is deemed a respondent being the breadwinner of his
business enterprise with only two employees. With inadequate waiver of the right to be heard and that decisions will be based on the family. The Social Justice policy mandates a
manpower, the absence of just one worker can spell untold difficulties in position paper submitted. By its inaction, petitioner was properly compassionate attitude toward the working
its operations. When the private respondent returned to duty, he was met considered to have waived or forfeited the right to refute private class in its relation to management. In
by his employer to personally tell him that someone had been hired to respondents' stance. That petitioner was not represented by a lawyer in calling for the protection to labor, the
take his place. He was advised, however, that he was to be readmitted in all the aforesaid proceedings was solely attributable to its own Constitution does not condone wrongdoing
June 1996. Germano filed a case for illegal dismissal. To buy peace, negligence or inattention to the case. by the employee, it nevertheless urges a
petitioner offered P5,000.00 but to no avail. moderation of the sanctions that may be
While a prolonged absence without leave may constitute as a just cause applied to him in the light of the many
The Labor Arbiter directed the parties to submit their position papers. of dismissal, its illegality stems from the non-observance of due process. disadvantages that weigh heavily on him like
Despite receipt of the aforesaid Order petitioner still failed to comply. Where dismissal was not preceded by the twin requirement of notice an albatross on his neck.
Germano and Ordered Gandara Mill to pay (P65,685.90) representing and hearing, the legality of the dismissal in question, is under heavy
separation pay, back wages, SLIP and attorneys fee. NLRC the affirmed clouds and therefore illegal. No preventive suspension shall last longer The timeliness of petitioners appeal is an
decision. than thirty (30) days. The employer shall thereafter reinstate the worker issue which this court endeavors to pass
to his former or substantially equivalent position or the employer may upon. The Constitution provides that : All
ISSUE: WoN public respondent act with grave abuse of discretion in extend the period of suspension provided that during the period of persons shall have the right to a speedy
dismissing petitioners appeal and in not giving petitioner a chance to extension, he pays the wages and other benefits due to the worker. In disposition of their cases before all judicial,
prove that the private respondent was not illegally dismissed but was this case, the supposed suspension was expected to last for more than quasi-judicial and administrative
merely suspended for abandoning his job? NO the period allowed by law, thus making the suspension constitutive of an bodies.Taking into account the interval of
illegal dismissal. time that elapsed from the receipt of the
assailed Resolution by petitioner, to the
time the court received the present petition,
an interregnum of almost three (3) months,
the irresistible conclusion is that the Petition
was not filed on time.

Public respondent NLRC did not act with

grave abuse of discretion in awarding to
private respondent the amount of
P65,685.90 which is not at all excessive
under the facts and circumstances of the
case. Time and again, the court held that
factual findings by the Labor Arbiter are to
be treated as final absent any showing that
he erred in his evaluation.

5 2. Civil Code Atienza v. Saluta, GR. The respondent alleged that he was hired as a company driver by CRV Which law is applicable? GIGANTE
233413; June 17, Corporation and was assigned to drive for the petitioner. He claimed that He was not governed by the Kasambahay Law, since he is not included CERNEO
2019 he was illegally dismissed after a verbal altercation with the petitioner. as houseworkers. Unfortunately, the provisions in the Labor Code were backup)
The petitioner, on the other hand, contended that the respondent was repealed. The SC uses the provision of the Civil Code on house helpers.
her personal driver and not an employee of CRV Corporation. She claimed
that the respondent abandoned his job when he failed to report for work
and took a leave of absence without permission.

Petitioner’s/Plaintiff’s Arguments: The respondent failed to prove by

substantial evidence that he was an employee of CRV Corporation. The
petitioner exercised control over the respondent's work and paid his
salary, proving an employer-employee relationship. The respondent
abandoned his job by not reporting for work without justifiable reason.

Respondent’s/Defendant’s Arguments: The respondent presented

evidence that he was a company driver of CRV Corporation. The petitioner
failed to prove that the respondent abandoned his job. The respondent is
entitled to various labor-related claims, including backwages and
separation pay.
 B. Basic concepts and doctrines
6 Philippine Airlines vs FACTS: On March 15, 1985, PAL completely revised its 1966 Code of ISSUE: WoN management may be compelled to share with the union or The exercise of managerial prerogatives is RICASIO G.
1.Shared NLRC 225 SCRA 301 Discipline. It was immediately implemented, which subjected employees its employees its prerogative of formulating a code of discipline. not unlimited. It is circumscribed by
Responsibility (1993) to disciplinary measures in it. PAL Employees Association (PALEA) sued limitations found in law, a collective
PAL for Unfair Labor Practice (ULP), for reasons such as 1) the Code was RULING: Yes. bargaining agreement, or the general
circulated in limited numbers only, 2) that the Code was arbitrary (as the While it was only on March 2, '89 wherein RA6715 amended A211 LC, principles of fair play and justice
Union was not consulted), oppressive, and prejudicial. and considered as State policy "(t)o ensure the participation of workers
in decision and policy-making processes affecting the rights, duties and A line must be drawn between management
LA - Dismissed the case of ULP, but said the PAL is not fault free. PAL welfare," jurisprudence dictates that even in the absence of said clear prerogatives regarding business operations
"failed to prove that the new Code was amply circulated." Noting that provision of law, the exercise of management prerogatives was never per se and those which affect the rights of
PAL's assertion that it had furnished all its employees copies of the Code is considered boundless. the employees. In treating the latter,
unsupported by documentary evidence, she stated that such "failure" on management should see to it that its
the part of PAL resulted in the imposition of penalties on employees who So long as a company's management prerogatives are exercised in good employees are at least properly informed of
thought all the while that the 1966 Code was still being followed. faith for the advancement of the employer's interest and not for the its decisions or modes action.
purpose of defeating or circumventing the rights of the employees under
NLRC - Affirmed the LA. Failure of management to discuss the provisions special laws or under valid agreements, this Court will uphold them. Whatever disciplinary measures are adopted
of a contemplated code of discipline which shall govern the conduct of its cannot be properly implemented in the
employees would result in the erosion and deterioration of an otherwise A close scrutiny of the objectionable provisions of the Revised PAL Code absence of full cooperation of the
harmonious and smooth relationship between them. x x x Management of Discipline reveals that they are not purely business-oriented nor do employees.
can no longer exclude labor in the deliberation and adoption of rules and they concern the management aspect of the business of the company.
regulations that will affect them. The provisions of the Code clearly have repercusions on the employee's
right to security of tenure. The implementation of the provisions may
PALEA has the right to feel isolated in the adoption of the New Code of result in the deprivation of an employee's means of livelihood which, as
Discipline. The Code of Discipline involves security of tenure and loss of correctly pointed out by the NLRC, is a property right. In view of these
employment — a property right. It is time that management realizes that aspects of the case which border on infringement of constitutional
to attain effectiveness in its conduct rules, there should be candidness rights, we must uphold the constitutional requirements for the
and openness by Management and participation by the union, protection of labor and the promotion of social justice. Justice Isagani
representing its members. In fact, our Constitution has recognized the Cruz - "the scales of justice when there is doubt, in favor of the worker"
principle of "shared responsibility" between employers and workers and
has likewise recognized the right of workers to participate in "policy and
decision-making process affecting their rights . . ." The latter provision was
interpreted by the Constitutional Commissioners to mean participation in
"management"' (Record of the Constitutional Commission, Vol. II).
7 3. MERALCO v. Jan Carlo FACTS: Issue Relevant: WON the petition should be dismissed on the ground On wether the Dismissal was illegal or not: ESTRELLA
Applicatio a) Gala; GRs 191288 & Respondent Jan Carlo Gala commenced employment with the petitioner that it is defective as the Verification and Certification," "Secretary’s The dismissal of Gala was valid. Gala's
n of Technical 191304 (2012) Meralco Electric Company (Meralco) as a probationary lineman. Certificate" and "Affidavit of Service" do not contain the details of the overall job performance and behavior were
technical rules not On July 27, 2006, barely four months on the job, Gala was dismissed for Community or Residence Tax Certificates of the affiants and that the being monitored and measured in
rules: binding alleged complicity in pilferages of Meralco’s electrical supplies. lawyer who signed the petition failed to indicate his MCLE certificate accordance with the standards laid down in
Burden of Meralco called for an investigation of the incident and asked Gala to number. his probationary employment agreement.
Proof explain. Gala denied involvement in the pilferage, contending that even if Gala's presence at the worksite where the
his superiors might have committed a wrongdoing, he had no Ruling: We stress at this point that it is the spirit and intention of labor pilferage of company property happened, as
participation in what they did. He maintained that his mere presence at legislation that the NLRC and the labor arbiters shall use every well as his familiarity with Llanes, a
the scene of the incident was not sufficient to hold him liable as a reasonable means to ascertain the facts in each case speedily and non-Meralco employee, supports the
conspirator. objectively, without regard to technicalities of law or procedure, conclusion that he had knowledge of the
Despite Gala’s explanation, Meralco proceeded with the investigation and provided due process is duly observed.19 In keeping with this policy and pilferage and was complicit in its
eventually terminated his employment on July 27, 2006.4 • Gala in the interest of substantial justice, we deem it proper to give due commission.
responded by filing an illegal dismissal complaint against Meralco. course to the petition, especially in view of the conflict between the Gala violated his probationary employment
Labor Arbiter dismissed the complaint for lack of merit and held that findings of the labor arbiter, on the one hand, and the NLRC and the CA, agreement by failing to observe the highest
Gala’s participation in the pilferage of Meralco’s property rendered him on the other. As we said in S.S. Ventures International, Inc. v. S.S. degree of transparency, selflessness, and
unqualified to become a regular employee. Ventures Labor Union,20 "the application of technical rules of procedure integrity in the performance of his duties
Gala appealed to the National Labor Relations Commission (NLRC). in labor cases may be relaxed to serve the demands of substantial and responsibilities.
The NLRC reversed the labor arbiter’s ruling. It found that Gala had been justice." There is substantial evidence to support the
illegally dismissed, since there was "no concrete showing of complicity conclusion that Gala does not deserve to
with the alleged misconduct/dishonesty. • The NLRC, however, ruled out remain in Meralco's employ as a regular
Gala’s reinstatement, stating that his tenure lasted only up to the end of employee and he failed to qualify as a
his probationary period. It awarded him backwages and attorney’s fees. regular employee.
Both parties moved for partial reconsideration; Gala, on the ground that
he should have been reinstated with full backwages, damages and
interests; and Meralco, on the ground that the NLRC erred in finding that
Gala had been illegally dismissed.
The NLRC denied the motions. Relying on the same grounds, Gala and
Meralco elevated the case to the CA through a petition for certiorari
under Rule 65 of the Rules of Court.
The CA modified the NLRC decision of May 2, 200811 and ordered Gala’s
reinstatement with full backwages and other benefits. The CA also denied
Meralco’s motion for reconsideration.
Hence, the present petition for review on certiorari.
By way of his Comment (to the Petition) dated September 2, 2010,15 Gala
asks for a denial of the petition because of (1) serious and fatal infirmities
in the petition; (2) unreliable statements of Meralco’s witnesses; and (3)
clear lack of basis to support the termination of his employment.
Gala contends, in regard to the alleged procedural defects of the petition,
that the "Verification and Certification," "Secretary’s Certificate" and
"Affidavit of Service" do not contain the details of the Community or
Residence Tax Certificates of the affiants, in violation of Section 6 of
Commonwealth Act No. 465 (an Act to Impose a Residence Tax).
Additionally, the lawyers who signed the petition failed to indicate their
updated Mandatory Continuing Legal Education (MCLE) certificate
numbers, in violation of the rules.
8 b) How to Price vs Innodata Phil Facts: Issue: whether regular or fixed term employees The Court here reiterates the rule that all CUEVAS
deal with - GR No. 178505 Sept -Petitioners Cherry J. Price, Stephanie G. Domingo, and Lolita Arbilera doubts, uncertainties, ambiguities and
doubts [Deal with doubts in were employed as formatters by INNODATA. Ruling: insufficiencies should be resolved in favor of
employment contract -The parties executed an employment contract denominated as a -Petitioners are considered regular employees. labor. It is a well-entrenched doctrine that in
interepretation] "Contract of Employment for a Fixed Period," stipulating that the contract
-the Court defined "project employees" as those workers hired (1) for a illegal dismissal cases, the employer has the
shall be for a period of one year, ( FEB. 16, 1999 to FEB. 16, 2000) specific project or undertaking, and wherein (2) the completion or burden of proof. This burden was not
-During their employment as formatters, petitioners were assigned to termination of such project has been determined at the time of the discharged in the present case.
handle jobs for various clients of INNODATA. engagement of the employee.
-On 16 February 2000, the HRAD Manager of INNODATA wrote petitioners -Scrutinizing petitioners’ employment contracts with INNODATA,
informing them of their last day of work. however, failed to reveal any mention therein of what specific project or
-On 22 May 2000, petitioners filed a Complaint for illegal dismissal and undertaking petitioners were hired for. Although the contracts made
damages against respondents. Petitioners claimed that they should be general references to a "project," such project was neither named nor
considered regular employees since their positions as formatters were described at all therein.
necessary and desirable to the usual business of INNODATA as an -The one-year period for which petitioners were hired was simply fixed
encoding, conversion and data processing company. in the employment contracts without reference or connection to the
-INNODATA insists that petitioners are project employees based on the period required for the completion of a project. More importantly, there
contract they signed. is also a dearth of evidence that such project or undertaking had already
been completed or terminated to justify the dismissal of petitioners. In
fact, petitioners alleged - and respondents failed to dispute that
petitioners did not work on just one project, but continuously worked for
a series of projects for various clients of INNODATA.
-In Magcalas v. National Labor Relations Commission, the Court struck
down a similar claim by the employer therein that the dismissed
employees were fixed-term and project employees. The Court here
reiterates the rule that all doubts, uncertainties, ambiguities and
insufficiencies should be resolved in favor of labor. It is a
well-entrenched doctrine that in illegal dismissal cases, the employer has
the burden of proof. This burden was not discharged in the present case.
9 Marcopper Mining vs FACTS: ISSUE: W/N the basis of the computation of the basic wage should be as In Philippine Telegraph & Telephone CERENO
NLRC 255 SCRA 322. Petitioner Marcopper Mining Corp. and private respondent National prescribed in the CBA or MOA. Corporation v. NLRC, the Court categorically
[G.R. No. 103525. Mines and Allied Workers’ Union, a labor federation registered with DOLE stated that: When conflicting interests of
March 29, 1996.] to which Marcopper Employees Union is affiliated, entered into a CBA RULING: NO. labor and capital are to be weighed on the
[Deal with doubts in effective 1 May 1984 until 30 April 1987. Prior to its expiration, they The principle that the CBA is the law between the contracting parties scales of social justice, the heavier influence
employment contract entered into a MOA modifying the CBA with a 10% wage increase and stands strong and true. HOWEVER, the present controversy involves not of the latter should be counter-balanced by
interepretation] P50-P100 monthly facilities allowance, implemented 1 May 1986. merely an interpretation of CBA provisions but requires a determination sympathy and compassion the law must
of the effect of an E.O. on the terms and the conditions of the CBA. accord the underprivileged worker.
EO 178 was promulgated mandating the integration of the cost of living It is unnecessary to delve too much on the intention of the parties as to
allowance (COLA), its effectivity retroactive to 1 May 1987. Petitioner what they allegedly meant by the term "basic wage" at the time the CBA Likewise, in Terminal Facilities and Services
implemented the second 5% wage increase due on 1 May 1987 and and MOA were executed because there is no question that as of 1 May Corporation v. NLRC , the Court declared:
thereafter added the integrated COLA. However, the Union argued that 1987, as mandated by E.O. 178, the basic wage of workers, or the Any doubt concerning the rights of labor
the COLA should first be integrated into the basic wage before the 5% statutory minimum wage, was increased with the integration of the should be resolved in its favor pursuant to
wage increase is computed. Thus, the Union filed a complaint for COLA. As of said date, then, the term "basic wage" includes the COLA. the social justice policy.
underpayment of wages. This is what the law ordains and to which the collective bargaining
LA ruled in favor of the Union and held that the written instrument and agreement of the parties must conform.
the intention of the parties must be brought to the fore. Pursuant to Sec.
1, Art. V of the CBA, “wage increase shall be exclusive of increase in the While petitioner acknowledges that all doubts in the interpretation of
minimum wage and/or mandatory living allowance that may be the Labor Code shall be resolved in favor of labor, it insists that what is
promulgated during the life of this Agreement.” NLRC affirmed LA’s involved here is the amended CBA which is essentially a contract
Decision. Hence this petition for certiorari under R65. between private persons. What petitioner has lost sight of is the avowed
policy of the State, enshrined in our Constitution, to accord utmost
protection and justice to labor, a policy, we are, likewise, sworn to
uphold.

The purpose of E.O. 178 is to improve the lot of the workers covered by
the said statute. We are bound to ensure its fruition.

WHEREFORE, premises considered, the petition.

10 Asuncion vs NLRC 362 FACTS: ISSUE: WHETHER OR NOT THE PETITIONER WAS VALIDLY DISMISSED DE
SCRA 56 (2001) [Deal Petitioner Ester M. Asuncion was employed as an accountant/bookkeeper OCAMPO
with doubts in by the respondent Mabini Medical Clinic. Sometime in May 1994, certain HELD: The petition is impressed with merit.
appreciation of officials of the NCR-Industrial Relations Division of the Department of
evidence] Labor and Employment conducted a routine inspection of the premises of Although, it is a legal tenet that factual findings of administrative bodies
the respondent company and discovered upon the disclosure of the are entitled to great weight and respect, we are constrained to take a
petitioner of (documents) violations of the labor standards law such as second look at the facts before us because of the diversity in the
the non-coverage from the SSS of the employees. Consequently, opinions of the Labor Arbiter and the NLRC.[5] A disharmony between
respondent Company was made to correct these violations. the factual findings of the Labor Arbiter and those of the NLRC opens the
On August 9, 1994, the private respondent, Medical Director Wilfrido door to a review thereof by this Court.[6]
Juco, issued a memorandum to petitioner charging her with the following
offenses: It bears stressing that a worker’s employment is property in the
constitutional sense. He cannot be deprived of his work without due
Chronic Absentism (sic) – You have incurred since Aug. 1993 up to the process. In order for the dismissal to be valid, not only must it be based
present 35 absences and 23 half-days. on just cause supported by clear and convincing evidence,[7] the
Habitual tardiness – You have late (sic) for 108 times. As shown on the employee must also be given an opportunity to be heard and defend
record book. himself. [8] It is the employer who has the burden of proving that the
LoiteRing and wasting of company time – on several occasions and dismissal was with just or authorized cause.[9] The failure of the
witnessed by several employees. employer to discharge this burden means that the dismissal is not
Getting salary of an absent employee without acknowledging or signing justified and that the employee is entitled to reinstatement and
for it. backwages.[10]
Disobedience and insubordination – continued refusal to sign memos
given to you.[1] In the case at bar, there is a paucity of evidence to establish the charges
Petitioner was required to explain within two (2) days why she should not of absenteeism and tardiness. We note that the employer company
be terminated based on the above charges. submitted mere handwritten listing and computer print-outs. The
handwritten listing was not signed by the one who made the same. As
Three days later, in the morning of August 12, 1994, petitioner submitted regards the print-outs, while the listing was computer generated, the
her response to the memorandum. On the same day, respondent Dr. entries of time and other annotations were again handwritten and
Juco, through a letter dated August 12, 1994, dismissed the petitioner on unsigned.[11]
the ground of disobedience of lawful orders and for her failure to submit
her reply within the two-day period. This prompted petitioner to file a The record is bereft of any showing that complainant was ever warned
case for illegal termination of her absences prior to her dismissal on August 9, 1994. The alleged
notices of her absences from August 17, until September 30, 1993, from
October until November 27, 1993, from December 1, 1993 up to
February 26, 1994 and the notice dated 31 May 1994 reminding
complainant of her five (5) days absences, four (4) half-days and
tardiness for 582 minutes (Annex “1” to “1-D” attached to respondent’
Rejoinder), fail to show that the notices were received by the
complainant. The allegation of the respondents that the complainant
refused to received (sic) the same is self-serving and merits scant
consideration

The Court, likewise, takes note of the fact that the two-day period given
to petitioner to explain and answer the charges against her was most
unreasonable, considering that she was charged with several offenses
and infractions (35 absences, 23 half-days and 108 tardiness), some of
which were allegedly committed almost a year before, not to mention
the fact that the charges leveled against her lacked particularity.

Apart from chronic absenteeism and habitual tardiness, petitioner was

also made to answer for loitering and wasting of company time, getting
salary of an absent employee without acknowledging or signing for it
and disobedience and insubordination.[18] Thus, the Labor Arbiter
found that actually petitioner tried to submit her explanation on August
11, 1994 or within the two-day period given her, but private respondents
prevented her from doing so by instructing their staff not to accept
complainant’s explanation, which was the reason why her explanation
was submitted a day later.[19]

The law mandates that every opportunity and assistance must be

accorded to the employee by the management to enable him to prepare
adequately for his defense.[20] In Ruffy v. NLRC,[21] the Court held that
what would qualify as sufficient or “ample opportunity,” as required by
law, would be “every kind of assistance that management must accord to
the employee to enable him to prepare adequately for his defense.” In
the case at bar, private respondents cannot be gainsaid to have given
11 PNCC vs NLRC 277 Facts: Issue: Whether private respondent Mendoza is entitled to the separation In the interpretation of an employer’s RICASIO L.
SCRA 91 (1997) [Deal Respondent Lorenzo Mendoza is an employee of PNCC as Driver II for benefits under PNCC’s Retrenchment Program. program providing for separation benefits,
with doubts in multiple projects. all doubts should be construed in favor of
application of policies Ruling: Yes. labor.
and programs] For more than two years after respondent’s last project, Mendoza was In the interpretation of an employer’s program providing for separation
not given any work assignment. Instead, PNCC hired a new driver for it’s benefits, all doubts should be construed in favor of labor.
Molave project. Nothing in this phrase can be understood as requiring that the service be
continuous. The requirement of continuous service pertains only to
Thereafter, Mendoza claimed the benefits of PNCC’s Retrenchment one’s eligibility under the program. No such requirement restricts the
Program, but was denied. computation of separation benefits.
There is no prohibition for the cumulation of the services rendered by
The claimed benefit of petitioner’s Retrenchment Program provides: qualified employees. Under the separation program, an employee may
“Coverage. — Special separation benefits shall be given to all regular, qualify if he has rendered "at least one year of continuous service.’’ The
project employees and permanent employees who have rendered at least plain language of the program did not require that continuous service be
one (1) year of continuous service with PNCC and are actively employed in immediately prior to the employee’s separation.
the company as of the date of their separation." Thus, private respondent’s other stints at PNCC prior to his last service in
1989 can properly be considered in order to qualify him under the
program. That the duration of private respondent’s last stint was less
than one year does not militate against his qualification under the
program. We grant this liberality in favor of private respondent in the
light of the rule in labor law that "when a conflicting interest of labor
and capital are weighed on the scales of social justice, the heavier
influence of the latter must he counter-balanced by the sympathy and
compassion the law must accord the under-privileged worker.

12 c) Burden Gurango vs Best FACTS: Issues and Ruling: In termination cases, the burden of proof MENDOZA
of Proof Chemicals GR No. Respondent BCPI is a corporation engaged in the manufacture of rests on the employer to show that the
174593, August 25, polypropylene products. Respondent Moon Pyo Hong is the president and 1. Whether Gurango engaged in a fistfight with Albao - NO dismissal is for just cause. The employer
2010 [illegal dismissal] CEO of BCPI. Petitioner Alex Gurango and Romeo Albao worked as a boiler The Supreme Court found that BCPI failed to present substantial must present substantial evidence to
operator and security guard, respectively, in BCPI. On May 5, 2003, a evidence to prove that Gurango engaged in a fistfight. The Court support the allegations of serious
confrontation occurred between Gurango and Albao, resulting in physical considered Gurango's version of the facts, supported by the testimony of misconduct. Serious misconduct must be of
injuries to Gurango. a co-worker, as more credible. The Court also noted that Gurango's a grave and aggravated character, performed
Conflicting versions of the incident were presented by both parties. actions were not performed with wrongful intent. with wrongful intent.

Petitioner’s/Plaintiff’s Arguments: 2. Whether Gurango violated company policy by bringing a camera to

Gurango denied engaging in a fistfight and claimed he was mauled by the workplace - NO
Albao and other securityguards. The Court held that BCPI's prohibition on bringing personal belongings to
He argued that bringing a camera to the workplace was not a violation of the work area did not include an unloaded camera. The Court found that
company policy. Gurango's act of bringing a camera did not disrupt or obstruct company
He questioned the propriety of his preventive suspension, stating that it services and operations.
was not justified.
3. Whether Gurango's dismissal was justified - NO
Respondent’s/Defendant’s Arguments: The Court ruled that BCPI failed to prove just cause for Gurango's
BCPI claimed that Gurango engaged in a fistfight with Albao and violated dismissal. The alleged misconduct was not of a grave and aggravated
company policy bybringing a camera to the workplace. character, and there was no evidence of wrongful intent on Gurango's
They argued that Gurango's actions constituted serious misconduct and part. The Court reinstated the Labor Arbiter's ruling that Gurango was
warranted dismissal. illegally dismissed.

Dispositive:
The petition is granted. The Court sets aside the decision and resolution
of the Court of Appeals and reinstates the resolutions of the National
Labor Relations Commission. BCPI is ordered to pay Gurango backwages
and separation pay.
14 Labadan vs Forest FACTS: ISSUE: W/N petitioner was illegally dismissed from her work. ADARNA
Hills GR No. 172295 • Lilian L. Labadan (petitioner) was hired by private respondent Forest
December 23, 2008 Hills Mission Academy (Forest Hills) in July 1989 as an elementary school RULING: NO.
[illegal dismissal] teacher. From 1990 up to 2002, petitioner was registrar and secondary
school teacher. • While in cases of illegal dismissal, the employer bears the burden of
• On August 18, 2003, petitioner filed a complaint against Forest Hills and proving that the dismissal is for a valid or authorized cause, the
its administrator Naomi Cabaluna for among others, illegal dismissal. employee must first establish by substantial evidence the fact of
Petitioner alleged that she was allowed to go on leave from Forest Hills, dismissal.
and albeit she had exceeded her approved leave period, its extension was
impliedly approved by the school principal because she received no • The records do not show that petitioner was dismissed from the
warning or reprimand and was in fact retained in the payroll up to 2002. service. They in fact show that despite petitioner's absence from July
• Forest Hills claimed among others, that in July 2001, petitioner was 2001 to March 2002 which, by her own admission, exceeded her
permitted to go on leave for two weeks. Despite petitioner's undertaking approved leave, she was still considered a member of the Forest Hills
to report for work "soon", she never did even until the end of School Year faculty which retained her in its payroll.
2001-2002. When she finally returned for work, classes for the School
Year 2002-2003 were already on-going. To belie petitioner's claim that she • Petitioner's affidavit and those of her former colleagues, which she
was dismissed, Forest Hills submitted a list of faculty members and staff attached to her Position Paper, merely attested that she was dismissed
from School Year 1998-1999 up to School Year 2001 to 2002 which from her job without valid cause, but gave no particulars on when and
included her name. how she was dismissed.
• LA: found Forest Hills and/or Cabaluna guilty of illegally dismissing
petitioner. • There being no substantial proof that petitioner was dismissed, she is
• NLRC: reversed and set aside LA decision and dismissed petitioner's not entitled to separation pay or backwages.
complaint.
• CA: dismissed petitioner's Petition for Certiorari.
15 Watchman vs On January 9, 2000, Lumahan filed a complaint for illegal dismissal against Whether or not Lumahan was illegally dismissed (No) TAN
Lumahan GR No. Nightowl Watchman. Sometime in 1996, Lumahan was hired by Nightowl
212096 October 14, as a security guard. His last assignment was at Steelworks Manufacturing. In every employee dismissal case, the employer bears the burden of
2015 [illegal dismissal] Lumahan admitted in his pleadings that he did not report for work from proving the validity of the employee's dismissal, i.e., the existence of just
May 16, 1999 to June 8, 1999, but claimed that he had to go to Iloilo to or authorized cause for the dismissal and the observance of the due
attend to his dying grandfather. According to him, he asked permission process requirements. The employer's burden of proof, however,
from both Steelworks and Nightowl. Steelworks granted his request, but presupposes that the employee had in fact been dismissed, with the
Nightowl denied the same. Nightowl, on the other hand, claimed that on burden to prove the fact of dismissal resting on the employee. Without
April 22, 1999, Lumahan left his post at Steelworld and failed to report any dismissal action on the part of the employer, valid or otherwise, no
back to work since then. It argued that it never dismissed Lumahan and burden to prove just or authorized cause arises.
that he only resurfaced when he filed the present complaint.
In this case, the NLRC was correct that no dismissal took place. As no
The LA ruled that Lumahan was illegally dismissed. The NLRC, however, dismissal was carried out, any consideration of abandonment - as a
found that there was no evidence showing that Lumahan had been defense raised by an employer in dismissal situations - was clearly
dismissed, and held that what actually happened was an "informal misplaced when in the first place, Nightowl never raised it as a defense.
voluntary termination of employment" on his end. It noted that Lumahan Furthermore, failure to send notices to Lumahan to report back to work
indicated his intention to sever his employment when he persisted in should not be taken against Nightowl despite the fact that it would have
leaving for Iloilo despite Nightowl's refusal to give its permission. When been prudent, given the circumstance, had it done so. Report-to-work
the case reached the CA, the CA ruled that Nightowl failed to discharge its notices are required, as an aspect of procedural due process, only in
burden of proving that Lumahan unjustly refused to return to work. The situations involving the dismissal, or the possibility of dismissal, of the
fact that Lumahan did not receive any notice whatsoever sufficiently employee. Verily, report-to-work notices could not be required when
shows that Nightowl had no valid cause to terminate Lumahan's dismissal, or the possibility of dismissal, of the employee does not exist.
employment; hence, Lumahan was illegally dismissed.
16 Penaflor vs Outdoor FACTS: Peñaflor was hired as probationary HRD Manager of Outdoor whether Peñaflor’s resignation from Outdoor Clothing was voluntary or DOCTRINE: The fact of filing a resignation CAMPOSUE
Clothing GR No. Clothing on September 2, 1999. On March 13, 2000, more than six a forced one, the latter making it a constructive dismissal equivalent to letter alone does not shift the burden of LO
177114 April 13, 2010 months from the time he was hired, Peñaflor learned that Outdoor an illegal dismissal. proving that the employee's dismissal was CERENO
[illegal dismissal] Clothing's President, Nathaniel Syfu (Syfu), appointed Edwin Buenaobra for a just and valid cause from the employer (backup)
(Buenaobra) as the concurrent HRD and Accounting Manager. After It is a forced one. While the letter states that Peñaflor’s resignation was to the employee.
enduring what he claimed as discriminatory treatment at work, Peñaflor irrevocable, it does not necessarily signify that it was also voluntarily
considered the appointment of Buenaobra to his position as the last executed. Precisely because of the attendant hostile and discriminatory
straw, and thus filed his irrevocable resignation from Outdoor Clothing working environment, Peñaflor decided to permanently sever his ties
effective at the close of office hours on March 15, 2000. He thereafter with Outdoor Clothing. This falls squarely within the concept of
filed an illegal dismissal complaint with the labor arbiter claiming that he constructive dismissal that jurisprudence defines, among others, as
had been constructively dismissed. The labor arbiter agreed with Peñaflor involuntarily resignation due to the harsh, hostile, and unfavorable
and issued a decision in his favor on August 15, 2001. On appeal, the conditions set by the employer. It arises when a clear discrimination,
National Labor Relations Commission (NLRC) reversed the labor arbiter's insensibility, or disdain by an employer exists and has become
ruling in its September 24, 2002 decision. When Peñaflor questioned the unbearable to the employeeThe gauge for constructive dismissal is
NLRC's decision before the CA, the appellate court affirmed the NLRC's whether a reasonable person in the employee’s position would feel
decision. Hence, Peñaflor filed a petition for review on certiorari with the compelled to give up his employment under the prevailing
Court. circumstances. With the appointment of Buenaobra to the position he
then still occupied, Peñaflor felt that he was being eased out and this
perception made him decide to leave the company.

The fact of filing a resignation letter alone does not shift the burden of
proving that the employee’s dismissal was for a just and valid cause from
the employer to the employee. Should the employer interpose the
defense of resignation, it is still incumbent upon the employer to prove
that the employee voluntarily resigned.
17 Vicente vs CA and FACTS: Issue: WON petitioner was constructively dismissed? JUAN
Cinderella Marketing Vicente was employed by respondent Cinderella Marketing Corporation
GR No. 175988 (Cinderella) as Management Coordinator in January 1990. Prior to her Ruling: No. Vicente voluntarily resigned from work. From the totality of
August 24, 2007 resignation in February 2000, she held the position of Consignment evidence on record, it was clearly demonstrated that respondent
[illegal dismissal] Operations Manager. She was tasked with the oversight, supervision and Cinderella has sufficiently discharged its burden to prove that petitioners
management of the Consignment Department dealing directly with resignation was voluntary. In voluntary resignation, the employee is
Cinderellas consignors. compelled by personal reason(s) to disassociate himself from
She alleged that it has been a practice among the employees of Cinderella employment. It is done with the intention of relinquishing an office,
to obtain cash advances by charging the amount from the net sales of accompanied by the act of abandonment.
Cinderellas suppliers/consignors and Mr. Tecson (AVP-Finance) approves To determine whether the employee indeed intended to relinquish such
the same. employment, the act of the employee before and after the alleged
resignation must be considered.
After some time, one of Cinderellas suppliers complained about the
unauthorized deductions from the net sales due them. Accordingly, an A careful scrutiny of the said letter shows that it bears the signature
investigation was conducted and upon initial review of respondents of petitioner. More importantly, petitioner admitted having submitted
business records, it appears that petitioner was among those involved in the said letter.
the irregular and fraudulent preparation and encashment of respondents Subsequently, petitioner stopped reporting for work although she met
corporate checks amounting to at least P500,000.00. with the officers of the corporation to settle her accountabilities but
Vicente alleged that Mr. Tecson demanded her resignation on several never raised the alleged intimidation employed on her. Also, though the
occasions. Mr. Tecson allegedly told her MAGRESIGN KANA AGAD KASI complaint was filed within the 4year prescriptive period, its belated filing
MAIIPIT KAMI. As a result of this alleged force and intimidation, petitioner supports the contention of respondent that it was a mere afterthought.
tendered her resignation letter. Taken together, these circumstances are substantial proof that
3 years after her resignation, petitioner filed a complaint against petitioners resignation was voluntary.
Cinderella alleging that her severance from employment was involuntary
amounting to constructive dismissal. Hence, petitioner cannot take refuge in the argument that it is the
employer who bears the burden of proof that the resignation is
voluntary and not the product of coercion or intimidation. Having
submitted a resignation letter, it is then incumbent upon her to prove
that the resignation was not voluntary but was actually a case of
constructive dismissal with clear, positive, and convincing evidence.
Petitioner failed to substantiate her claim of constructive dismissal.
18 Abduljuahid "FACTS: It is not for an employee to prove non-payment of benefits to ISSUE: WON the Honorable Court of Appeals erred when it dismissed CISTER
Pigcaulan v. Security which he is entitled by law. Rather, it is on the employer that the burden the complaint allegedly due to absence of legal and factual [bases]
and Credit of proving payment of these claims rests. despite attendance of substantial evidence in the records.
Investigation, Inc.; GR HELD: There was no substantial evidence to support the grant of
173648 (2012) [money Canoy and Pigcaulan were both employed by SCII as security guards and overtime pay.
claims and labor were assigned to SCII’s different clients. Subsequently, however, Canoy
standard] and Pigcaulan filed with the Labor Arbiter separate complaints7 for The Labor Arbiter relied heavily on the itemized computations they
underpayment of salaries and non-payment of overtime, holiday, rest day, submitted which he considered as representative daily time records to
service incentive leave and 13th month pays. These complaints were later substantiate the award of salary differentials. The NLRC then sustained
on consolidated as they involved the same causes of action. Canoy and the award on the ground that there was substantial evidence of
Pigcaulan, in support of their claim, submitted their respective daily time underpayment of salaries and benefits.
records reflecting the number of hours served and their wages for the
same. They likewise presented itemized lists of their claims for the We find that both the Labor Arbiter and the NLRC erred in this regard.
corresponding periods served. The handwritten itemized computations are self-serving, unreliable and
unsubstantial evidence to sustain the grant of salary differentials,
RESPONDENT MAINTAINS: that Canoy and Pigcaulan were paid their just particularly overtime pay. Unsigned and unauthenticated as they are,
salaries and other benefits under the law; that the salaries they received there is no way of verifying the truth of the handwritten entries stated
were above the statutory minimum wage and the rates provided by the therein. Written only in pieces of paper and solely prepared by Canoy
Philippine Association of Detective and Protective Agency Operators and Pigcaulan, these representative daily time records, as termed by the
(PADPAO) for security guards; that their holiday pay were already included Labor Arbiter, can hardly be considered as competent evidence to be
in the computation of their monthly salaries; that they were paid used as basis to prove that the two were underpaid of their salaries.
additional premium of 30% in addition to their basic salary whenever they
were required to work on Sundays and 200% of their salary for work done Hence, in the absence of any concrete proof that additional service
on holidays; and, that Canoy and Pigcaulan were paid the corresponding beyond the normal working hours and days had indeed been rendered,
13th month pay for the years 1998 and 1999. In support thereof, copies of we cannot affirm the grant of overtime pay to Pigcaulan.
payroll listings8 and lists of employees who received their 13th month
pay, for the said periods. However, with respect to the award for holiday pay, service incentive
leave pay and 13th month pay, we affirm and rule that Pigcaulan is
LABOR ARBITER: (in favor of petitioner herein) held that the payroll entitled to these benefits [under the Labor Code, Article 94-95].
listings presented by the respondents did not prove that Canoy and SCII failed to show any other concrete proof by means of records,
Pigcaulan were duly paid as same were not signed by the latter or by any pertinent files or similar documents reflecting that the specific claims
SCII officer. The 13th month payroll was, however, acknowledged as have been paid. With respect to 13th month pay, SCII presented proof
sufficient proof of payment, for it bears Canoy’s and Pigcaulan’s that this benefit was paid but only for the years 1998 and 1999. To
signatures. repeat, the burden of proving payment of these monetary claims rests
on SCII, being the employer.
NLRC affirmed; CA however reversed in favor of respondent. The CA erred in dismissing the claims instead of remanding the case to
the Labor Arbiter for a detailed computation of the judgment award.
Hence, the present Petition for Review on Certiorari [filed by petitioner
PIGCAULAN alone] PETITION GRANTED. Pigcaulan is hereby declared entitled to holiday pay
and service incentive leave pay for the years 1997-2000 and
proportionate 13th month pay for the year 2000. The case is REMANDED
" to the Labor Arbiter for further proceedings to determine the exact
amount and to make a detailed computation of the monetary benefits
due
19 Cabrera vs Lazada – FACTS: Chrisden Cabrera Ditiangkin, Hendrix Masamayor Molines, Harvey ISSUE: W/N petitioners are regular employees of respondent Lazada. Article 106 of the Labor Code governs MICALLER
GR No. 246892, Sept Mosquito Juanio, Joselito Castro Verde, and Brian Anthony Cubacub legitimate job contractors and
21, 2022 [fact of Nabong (collectively, riders) were hired as riders by Lazada EServices RULING: YES. To determine the existence of an employer-employee subcontractors:
employment] Philippines, Inc. (Lazada). Each of them signed an Independent Contractor relationship, this Court employs a two-tiered test: the four-fold test and
Agreement (Contract) which states that they will be paid P1,200.00 per the economic dependence test. ARTICLE 106. A Contractor or Subcontractor.
day as service fee. The contract also states that they are engaged for a — Whenever an employer enters into a
period of one year. The riders used their privately-owned motorcycles in Under the four-fold test, to establish an employer-employee contract with another person for the
their trips. relationship, four factors must be proven: (a) the employer's selection performance of the former's work, the
and engagement of the employee; (b) the payment of wages; (c) the employees of the contractor and of the
Sometime in January 2017, the riders were told by a dispatcher that they power to dismiss; and (d) the power to control the employee's conduct. latter's subcontractor, if any, shall be paid in
have been removed from their usual routes and will no longer be given The power of control is the most significant factor in the four-fold test. accordance with the provisions of this Code.
any schedules. Despite this, they still reported to work for three days and
waited all day for new assignments to no avail. Thereafter, they learned The right to control extends not only over the work done but over the In the event that the contractor or
that their routes were already given to other employees. means and methods by which the employee must accomplish the work. subcontractor fails to pay the wages of his
The power of control does not have to be actually exercised by the employees in accordance with this Code, the
The riders then filed a complaint before the National Labor Relations employer. It is sufficient that the employer "has a right to wield the employer shall be jointly and severally liable
Commission against Lazada, its employees, and its officers for illegal power." However, this Court has clarified that not all rules imposed upon with his contractor or subcontractor to such
dismissal. The riders claimed that they are regular employees of Lazada the worker is an indication of control. When rules are intended to serve employees to the extent of the work
given that the means and methods by which they carry out their work is as general guidelines to accomplish the work, it is not an indicator of performed under the contract, in the same
subject to the discretion and control of Lazada. control. manner and extent that he is liable to
employees directly employed by him.
On the other hand, Lazada maintained that the riders are not regular When the control test is insufficient, the economic realities of the
employees but independent contractors. It argued that it is not a common employment are considered to get a comprehensive assessment of the The Secretary of Labor and Employment
carrier but a business which facilitates the sale of goods between its true classification of the worker. The proper standard of economic may, by appropriate regulations, restrict or
sellers and buyers. When a buyer purchases an item through Lazada, it dependence is whether the worker is dependent on the alleged prohibit the contracting-out of labor to
merely coordinates the delivery of the product through an independent employer for his continued employment in that line of business. protect the rights of workers established
transportation service. Thus, delivery is merely an ancillary activity and under this Code. In so prohibiting or
not its main line of business. Further, Lazada explained that after the Respondents here mainly contend that there is no employer-employee restricting, he may make appropriate
surge of deliveries during Christmas season, the demand decreased to its relationship because petitioners are independent contractors. An distinctions between labor-only contracting
normal rate by January. Because of this, it had to reorganize the schedule independent contractor is defined as: [O]ne who carries on a distinct and and job contracting as well as
to ensure that all riders will have a trip. Lazada argued that the riders independent business and undertakes to perform the job, work, or differentiations within these types of
misunderstood the temporary team assignments as termination. service on its own account and under one's own responsibility according contracting and determine who among the
to one's own manner and method, free from the control and direction of parties involved shall be considered the
The Labor Arbiter ruled in favor of Lazada. On appeal, the NLRC affirmed the principal in all matters connected with the performance of the work employer for purposes of this Code, to
the Labor Arbiter’s Decision. except as to the results thereof. prevent any violation or circumvention of
any provision of this Code.
Our laws and jurisprudence recognize two types of contractors:
legitimate job contractors and independent contractors who possess There is "labor-only" contracting where the
unique skills and talent. Article 106 of the Labor Code governs legitimate person supplying workers to an employer
job contractors and subcontractors. does not have substantial capital or
investment in the form of tools, equipment,
In this case, the respondents failed to discharge their burden of proving machineries, work premises, among others,
that petitioners are independent contractors. Petitioners do not fall and the workers recruited and placed by
under any of the categories of independent contractors. First, petitioners such person are performing activities which
are not hired by a contractor or subcontractor. Petitioners merely refer are directly related to the principal business
to RGSERVE, Inc. as their former employer, but it is clear in the parties' of such employer. In such cases, the person
submissions that petitioners were directly hired by respondents. Each or intermediary shall be considered merely
petitioner signed an individual Contract with respondent Lazada who as an agent of the employer who shall be
paid them directly. Thus, there is no trilateral relationship wherein a responsible to the workers in the same
contractor or subcontractor is required to possess substantial capital or manner and extent as if the latter were
investment. Second, petitioners cannot be considered independent directly employed by him.
contractors in a bilateral relationship. The work performed by petitioners
do not require a special skill or talent. Picking up and delivering goods
from warehouse to buyers do not call for a specific expertise. It is also
not shown that petitioners were hired due to their unique ability or
competency.

Contrary to respondents' assertions, petitioners satisfy both the fourfold

and economic dependence tests.

Here, the four factors are present. First, petitioners are directly
employed by respondent Lazada as evidenced by the Contracts they
signed. Petitioner's former employer, RGSERVE, Inc., is not a party to the
Contract with respondent Lazada. Second, as indicated in the Contract,
petitioners receive their salaries from respondent Lazada. Petitioners are
paid by respondent Lazada the amount of P1,200.00 for each day of
20 Valencia vs Classique FACTS: Valencia alleged that he applied for work with Classique Vinyl but RULING: There is no merit in the Petition. In Order to determine the Further, Court finds untenable Valencia's YU
Vinyl Products – GR was told by the latter's personnel office to proceed to CMS, a local existence of an employer-employee relationship, the following yardstick argument that neither Classique Vinyl nor
No. 206390 January manpower agency, and therein submit the requirements for employment. had been consistently applied: (l) the selection and engagement; (2) CMS was able to present proof that the
30, 2107 [fact of Upon submission thereof, CMS made him sign a contract of employment. payment of wages; (3) power of dismissal and; (4) the power to control latter is a legitimate independent contractor
employment] but no copy of the same was given to him. He then proceeded to the employee's conduct. and therefore, unable to rebut the
Classique Vinyl for interview and thereafter started working for the presumption that a contractor is presumed
company in June 2005 as felitizer operator. Five months later, he was In labor cases, as in other administrative and quasi-judicial proceedings, to be a labor-only contractor. "Generally, the
made to serve as extruder operator but without the corresponding 'the quantum of proof necessary is substantial evidence, or such amount presumption is that the contractor is a
increase in salary. He was neither paid his holiday pay, service incentive of relevant evidence which a reasonable mind might accept as adequate labor-only [contractor] unless such
leave pay, and 13th month pay. Worse, premiums for Philhealth and to justify a conclusion.’ "The burden of proof rests upon the party who contractor overcomes the burden of proving
Pag-IBIG Fund were not paid and his monthly deductions for Social asserts the affirmative of an issue’." Since it is Valencia here who is that it has the substantial capital,
Security System (SSS) premiums were not properly remitted. He further claiming to be an employee of Classique Vinyl, it is thus incumbent upon investment, tools and the like." Here, to
averred that he worked for Classique Vinyl for four years until his him to proffer evidence to prove the existence of employer-employee prove that CMS was a legitimate contractor,
dismissal. Hence, by operation of law, he had already attained the status relationship between them. He "needs to show by substantial evidence Classique Vinyl presented the former's
of a regular employee of his true employer, Classique Vinyl, since that he was indeed an employee of the company against which he claims Certificate of Registration with the
according to him, CMS is a mere labor-only contractor. Valencia, illegal dismissal." Department of Trade and Industry and
therefore, argued that Classique Vinyl should be held guilty of illegal License as private recruitment and
dismissal for failing to comply with the twin-notice requirement when it Valencia failed to present competent evidence, documentary or placement agency from the Department of
dismissed him from the service and be made to pay for his monetary otherwise, to support his claimed employer-employee relationship Labor and Employment. Indeed, these
claims. between him and Classique Vinyl. All he advanced were mere factual documents are not conclusive evidence of
LA: Favored Respondent. assertions unsupported by proof. In fact, most of Valencia's allegations the status of CMS as a contractor. However,
NLRC: Affirmed LA decision. Valencia is an employee of respondent CMS. even militate against his claim that Classique Vinyl was his true such fact of registration of CMS prevented
No basis for Valencia to hold Classique Vinyl liable for his alleged illegal employer. For one, Valencia stated in his Sinumpaang Salaysay that his the legal presumption of it being a mere
dismissal as well as for his money claims. application was actually received and processed by CMS which required labor-only contractor from arising. In any
ISSUE: Whether there exists an employer-employee relationship between him to submit the necessary requirements for employment. Upon event, it must be stressed that "in labor-only
Classique Vinyl and Valencia? NO submission thereof, it was CMS that caused him to sign an employment contracting, the statute creates an
contract. It was only after he was engaged as a contractual employee of employer-employee relationship for a
CMS that he was deployed to Classique Vinyl. comprehensive purpose: to prevent a
circumvention of labor laws. The contractor
is considered merely an agent of the
principal employer and the latter is
responsible to the employees of the
labor-only contractor as if such employees
had been directly employed by the principal
employer. The principal employer therefore
becomes solidarily liable with the labor-only
contractor for all the rightful claims of the
employees." The facts of this case, however,
failed to establish that there is any
circumvention of labor laws as to call for the
creation by the statute of an
employer-employee relationship between
Classique Vinyl and Valencia.
21 4. No Work No Pay Aklan Electric FACTS: ISSUE: GIGANTE
Cooperative vs NLRC January 22, 1991 by way of a resolution of the Board of Directors of Whether the refusal of private respondents to work under the lawful
323 SCRA 258 (2000) AKELCO it allowed the temporary holding of office at Amon Theater, orders of AKELCO management are covered by the “no work, no pay”
Kalibo, Aklan upon the recommendation of Atty. Leovigildo Mationg, then principle (thus not entitled to the claim for unpaid wages)
project supervisor, on the ground that the office at Lezo, Aklan was
dangerous and unsafe. Majority of the employees including the herein RULING:
complainants, continued to report for work at Lezo, Aklan and were paid The above bases of the NLRC does not constitute substantial evidence to
of their salaries. The complainants claimed that transfer of office from support the conclusion that private respondents are entitled to the
Lezo, Aklan to Kalibo, Aklan was illegal because it failed to comply with the payment of wages from June 16, 1992 to March18, 1993. Substantial
legal requirements under P.D. 269, thus the they remained and continued evidence is that amount of relevant evidence which a reasonable mind
to work at the Lezo Office until they were illegally locked out therefrom by might accept as adequate to justify a conclusion. These evidences relied
the respondents. Despite the illegal lock out however, complainants upon by public respondent did not establish the fact that private
continued to report daily to the location of the Lezo Office, prepared to respondents actually rendered services in the Kalibo office during the
continue in the performance of their regular duties. Complainants who stated period.
continuously reported for work at Lezo, Aklan were not paid their salaries
from June 1992 up to March 18, 1993. It has been established that the petitioner’s business office was
transferred to Kalibo and all its equipments, records and facilities were
LA dismissed the complaints. NLRC reversed and set aside the LA’s transferred thereat and that it conducted its official business in Kalibo
decision and RULING that private respondents are entitled to unpaid during the period in question. It was incumbent upon private
wages. respondents to prove that they indeed rendered services for petitioner,
which they failed to do.
NLRC based its conclusion on the following: (a) the letter of Leyson, Office
Manager of AKELCO addressed to AKELCO’s General Manager, Atty. It would neither be fair nor just to allow private respondents to recover
Mationg, requesting for the payment of private respondents’ unpaid something they have not earned and could not have earned because
wages from June 16, 1992 to March18, 1993; (b) the memorandum of they did not render services at the Kalibo office during the stated period.
said Atty. Mationg in answer to the letter request of Leyson where he
22 Lao Construction vs FACTS: ISSUE: Similar to the case of regular seasonal RICASIO G.
NLRC 278 SCRA 716 Private respondents were hired for various periods and alternatively employees, the employment relation is not
(1997) worked for petitioners Tomas Lao Corpoation (TLC), Thomas and James RULING: severed by merely being suspended. The
Developers (T&J) and LVM Construction Corporation (LVM), altogether [In convincing] that private respondents were indeed project employees, employees are, strictly speaking, not
informally referred to as the "Lao Group of Companies" as construction petitioners point out that the workers were not regularly maintained in separated from services but merely on
workers. The three entities were controlled and managed by members of the payroll and were free to offer their services to other companies leave of absence without pay until they are
the Lao Family. when there were no on-going projects. This argument however cannot reemployed. Thus we cannot affirm the
defeat the workers' status of regularity. We apply by analogy the case of argument that non-payment of salary or
TLC, T&J and LVM are engaged in the construction of public roads and Industrial-Commercial-Agricultural Workers Organization v. CIR which non-inclusion in the payroll and the
bridges. They entered joint ventures among each other and lease tools deals with regular seasonal employees. There we held — opportunity to seek other employment
and equipment of one another. In 1989, petitioner corporations release denote project employment.
the employment contracts of the private respondents to be signed and That during the temporary layoff the laborers are free to seek other
the documents will be used for alleged audit purposes. To secure the employment is natural, since the laborers are not being paid, yet must
signatures and compliance of the employees, a memorandum was find means of support. A period during which the Central is forced to
released requiring the employees to sign the documents, otherwise, their suspend or cease operation for a time . . . should not mean starvation for
salaries will be withhold for non compliance. Notably, the contracts employees and their families (emphasis supplied).
expressly describe the employees as project employees. Private
respondents did not sign the documents because they believe that it is Truly, the cessation of construction activities at the end of every project
just a scheme to downgrade their status from regular employees to is a foreseeable suspension of work. Of course, no compensation can be
project employees. As a result, the private respondents were dismissed. demanded from the employer because the stoppage of operations at the
Aggrieved, they then filed a case with the NLRC for illegal dismissal, which end of a project and before the start of a new one is regular and
was granted and ordered the 3 corporations solidarily liable for expected by both parties to the labor relations. Similar to the case of
backwages and separation pay of private respondents. regular seasonal employees, the employment relation is not severed
by merely being suspended. The employees are, strictly speaking, not
separated from services but merely on leave of absence without pay
until they are reemployed. Thus we cannot affirm the argument that
non-payment of salary or non-inclusion in the payroll and the
opportunity to seek other employment denote project employment.

Contrary to petitioners' assertion, our ruling in Sandoval Shipyards is

inapplicable considering the special circumstances attendant to the
present case. In Sandoval, the hiring of construction workers, unlike in
the instant case, was intermittent and not continuous for the "shipyard
merely accepts contracts for shipbuilding or for repair of vessels from
third parties and, only on occasions when it has work contract of this
nature that it hires workers to do the job which, needless to say, lasts
only for less than a year or longer."
23 Imbuido vs NLRC 329 FACTS: Issues: WON Imbuido is a project employee or a regular employee? Case Summary: Imbuido was employed by ESTRELLA
SCRA 357 (2000) Private respondents were hired for various periods and alternatively IFS as a data encoder. She was fired after
worked for petitioners Tomas Lao Corpoation (TLC), Thomas and James RULING: agreeing to file a petition for verification
Developers (T&J) and LVM Construction Corporation (LVM), altogether Imbuido is a project employee who later on acquired the status of a election involving IFS’s rank-and-file
informally referred to as the "Lao Group of Companies" as construction regular employee. Ruling: Imbuido is a Project Employee. It is true that employees. She filed a case for illegal
workers. The three entities were controlled and managed by members of the length of time during which the employee was continuously re-hired dismissal. LA ruled that she was regularized.
the Lao Family. is not controlling, but merely serves as a badge of regular employment. NLRC ruled that she is a project employee.
But based on the foregoing, Imbuido has attained the status of regular SC ruled that she is a a project employee
employee. who later on acquired the status of a regular
o A project or work pool employees who have gained the status of employee. She was hired continuously for a
regular employees are subject to the "no work-no pay" principle. A work period of more than 3 years and contracted
pool may exist although the workers in the pool do not receive salaries for a total of 13 successive projects. She was
and are free to seek other employment during temporary breaks in the also performing activities which are usually
business, provided that the worker shall be available when called to necessary or desirable in the usual business
report. or trade of her employer.
- As a regular employee, Imbuido is entitled to security of tenue and Doctrine: Elements for a project employee
could only be dismissed for just and authorized case. or a member of a work pool to acquire the
o Alleged case for dismissal, the low volume of work and belatedly, the status of a regular employee: (1) There is a
completion of project, are not valid causes under Art. 282 and 283. continuous rehiring of project employees
o Imbuido is entitled to reinstatement without loss of seniority rights even after the cessation of a project; (2)
and other privileges, and to her full backwages, inclusive of allowances, Tasks performed by the alleged "project
and to her other benefits or their monetary equivalent computed from employee" are vital, necessary and
the time her compensation was withheld from her up to the time of her indispensable to the usual business or trade
actual reinstatement. of the employer.
▪ And applying the “no work-no pay” principle, amounts corresponding
to what could have been earned during the periods when she was
dismissed until her reinstatement when private respondent was not
undertaking any project, should be deducted.
o She is also entitled to service incentive leave for working for more than
3 years, as mandated by LC95.
o Project Employee, Definition: one whose employment has been fixed
for a specific project or undertaking, the completion or termination of
which has been determined at the time of the engagement of the
employee or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season.

AS APPLIED IN THIS CASE, Imbuido’s contract of employment indicates

that her employment was fixed for a specific project or undertaking the
completion or termination of which had been determined at the time of
her engagement. Her contracts contained a designation of a specific job
contract and a specific period of employment
- Imbuido is a Project Employee who acquired status of a regular
employee.
24 5. Equal Day for Equal International School Facts: Issue: CUEVAS
Work vs Quisumbing 333 -Private respondent, hires both foreign and local teachers as members of Whether Foreign-hires are also paid a salary rate twenty-five percent
SCRA 13 (2000) its faculty, classifying the same into two: (1) foreign-hires and (2) (25%) more than local-hires is an invalid and unreasonable classification
local-hires. and violates the Equal Protection Clause.
-respondent grants foreign-hires salary rate twenty-five percent (25%)
more than local-hires. The School justifies the difference on two Ruling:
“significant economic disadvantages” foreign-hires have to endure, -Yes.
namely: (a) the “dislocation factor” and (b) limited tenure. -Discrimination, particularly in terms of wages, is frowned upon by the
-When negotiations for a new collective bargaining agreement, petitioner Labor Code. The foregoing provisions impregnably institutionalize in this
contested the difference in pay between local and foreign hires despite jurisdiction the long honored legal truism of “equal pay for equal work.”
doing the same work. -If an employer accords employees the same position and rank, the
-Issue caused a deadlock which eventually led to the SC presumption is that these employees perform equal work. If the
employer pays one employee less than the rest, it is not for that
employee to explain why he receives less or why the others receive
more. That would be adding insult to injury.
-The employer in this case has failed to discharge this burden. There is
no evidence here that foreign-hires perform 25% more efficiently or
effectively than the local-hires. Both groups have similar functions and
responsibilities, which they perform under similar working conditions.
-Hence, the Court finds the point-of-hire classification employed by
respondent School to justify the distinction in the salary rates of
foreign-hires and local hires to be an invalid classification. There is no
reasonable distinction between the services rendered by foreign-hires
and local-hires.
25 6. Last in First out Maya Farms FACTS: ISSUE: W/N the termination of the 66 employees was in accordance with The rule is well-settled that labor laws CERENO
Employees Invoking the workers' constitutional right to security of tenure, petitioners the LIFO rule in the CBA discourage interference with an employer's
Organization vs NLRC prayed for the reinstatement of the sixty-six (66) employees and the judgment in the conduct of his business.
239 SCRA 508 (1994) payment of attorney's fees as they were constrained to hire the services RULING: YES. Even as the law is solicitous of the welfare of
of counsel in order to protect the workers' rights. The NLRC correctly held that private respondents did not violate the LIFO employees, it must also protect the right of
rule under Section 2, Article III of the CBA which provides: “Sec. 2. LIFO an employer to exercise what are clearly
On their part, private respondents contend that their decision to RULE. In all cases of lay-off or retrenchment resulting in termination of management prerogatives. As long as the
implement a special redundancy program was an exercise of management employment in the line of work, the Last-inFirst-Out (LIFO) Rule must company's exercise of the same is in good
prerogative which could not be interfered with unless it is shown to be always be strictly observed.” faith to advance its interest and not for the
tainted with bad faith and ill motive. Private respondents explained that purpose of defeating or circumventing the
they had no choice but to reduce their work force, otherwise, they would It is not disputed that the LIFO rule applies to termination of rights of employees under the laws or valid
suffer more losses. Furthermore, they denied that the program violated employment in the line of work. Verily, what is contemplated in the LIFO agreements, such exercise will be upheld.
CBA provisions. rule is that when there are two or more employees occupying the same
position in the company affected by the retrenchment program, the last
Hence this petition for review on certiorari to set aside the NLRC Decision one employed will necessarily be the first to go.
which upheld the legality of separation of 66 employees who are
members of the Union, thereby dismissing their complaint for violation of Thus, contrary to petitioners' contention, there is nothing on record to
CBA and unfair labor practice. show that the 30-day notice of termination to the workers was
disregarded and that the same substituted with separation pay by
private respondents. As found by public respondent, written notices of
separation were sent to the employees on January 17, 1992. The notices
expressly stated that the termination of employment was to take effect
one month from receipt thereof. Therefore, the allegation that
separation pay was given in lieu of the 30-day notice required by law is
baseless
26 7. One Company – One Philtranco Services FACTS: The Kapisanan ng mga Kawani, Assistant, Manggagawa at W/N professional, technical, administrative, and confidential DE
Union Enterprises vs BLR Konpidensyal sa Philtranco (KASAMA KO), a registered labor organization employees/personnel of a company may join a labor organization. OCAMPO
174 SCRA 388 (1989) filed a petition for certification election with the Department of Labor and
Employment, desiring to represent all professional, technical, No, the aforementioned employees may not join a labor organization.
administrative, and confidential employees/personnel of Philtranco at its Section 11 of Rule II, Book V of the Omnibus Rules implementing the
establishments in Luzon, Visayas and Mindanao for purposes of collective Labor Code did away with existing supervisors’ unions classifying the
bargaining for the reason that the aforementioned employees were members either as managerial or rank and file employees depending on
always expressly excluded from participating in the certification election the work they perform. If they discharge managerial functions,
conducted among the rank and file employees (drivers, conductors, coach supervisors are prohibited from forming or joining any labor
drivers, coach stewards, and mechanics) of respondent and are excluded organization. If they do not perform managerial work, they may join the
from the bargaining unit covered by the CBA between respondent and its rank and file union and if none exists, they may form one such rank and
rank and file employees. In addition, there exist substantial differences in file organization.
the terms and conditions of employment between the aforementioned It, therefore, follows that the members of the KASAMA KO who are
employees, hence, the former are covered by another appropriate professional, technical, administrative and confidential personnel of
bargaining unit which is separate and distinct from that of the rank and PHILTRANCO performing managerial functions are not qualified to join,
file employees of respondent. National Mines and Allied Workers Union much less form a union. This rationalizes the exclusion of managers and
(NAMAWU-MIF) filed a motion for intervention alleging that it is the confidential employees exercising managerial functions from the ambit
bargaining agent of the workers at Philtranco and as such it has a of the collective bargaining unit.
substantial interest in the outcome of the petition. Furthermore, the Court see no need for the formation of another union
in PHILTRANCO. The qualified members of the KASAMA KO may join the
NAMAWU-MIF if they want to be union members, and to be consistent
with the one-union, one-company policy of the Department of Labor
and Employment, and the laws it enforces. The private respondent has
not even shown that a separate bargaining unit would be beneficial to
the employees concerned
27 8. Four Fold Test Cesar Lirio (Celkor Ad FACTS: Issues: RICASIO L.
Sonicmix) v. Wilmer  Petitioner is the owner of Celkor Ad Sonicmix Recording Studio WON there is an employer-employee relationship between Petitioner
Genovia; GR 169757 (Celkor) and Respondent.
(2011) Affirmative.
 Respondent Wilmer Genovia alleged that in 2001, Petitioner hired
him as studio manager. He was employed to manage and operate Celkor Ruling:
and to promote and sell the recording studio's services to music
enthusiasts and other prospective clients. He received a monthly salary of  In this case, complainant's evidence is substantial enough to prove
₱7,000.00. They also agreed that he was entitled to an additional the employment relationship that on August 14, 2001, he was hired as
commission of ₱100.00 per hour as recording technician whenever a 'Studio manager' by respondent Lirio to manage and operate the
client uses the studio for recording, editing or any related work. He was recording studio and to promote and sell its services to music
made to report for work from Monday to Friday from 9:00 a.m. to 6 p.m. enthusiasts and clients, proven by his receipt for this purpose from said
On Saturdays, he was required to work half-day only, but most of the respondent a fixed monthly compensation of ₱7,000.00, with
time, he still rendered eight hours of work or more. All the employees of commission of ₱100.00 per hour when serving as recording technician,
petitioner, including respondent, rendered overtime work almost shown by the payroll from July 31, 2001-March 15, 2002. The said
everyday, but petitioner never kept a daily time record to avoid paying the evidence points to complainant's hiring as employee so that the case
employees overtime pay. comes within the purview of our jurisdiction on labor disputes between
an employer and an employee.
 After started to work in Celkor, Petitioner approached the  "If doubt exists between the evidence presented by the employer
Respopndent and told him about his project to produce an album for his and the employee, the scales of justice must be tilted in favor of the
15-year-old daughter, Celine Mei Lirio, a former talent of ABS-CBN Star latter," the Court of Appeals reversed the resolution of the NLRC and
Records. Petitioner asked respondent to compose and arrange songs for reinstated the decision of the Labor Arbiter with modification.
Celine and promised that he (Lirio) would draft a contract to assure  The elements to determine the existence of an employment
respondent of his compensation for such services. As agreed upon, the relationship are: (a) the selection and engagement of the employee; (b)
additional services that respondent would render included composing the payment of wages; (c) the power of dismissal; and (d) the employer’s
and arranging musical scores only, while the technical aspect in producing power to control the employee’s conduct. The most important element
the album, such as digital editing, mixing and sound engineering would be is the employer’s control of the employee’s conduct, not only as to the
performed by respondent in his capacity as studio manager for which he result of the work to be done, but also as to the means and methods to
was paid on a monthly basis. Petitioner instructed respondent that his accomplish it.
work on the album as composer and arranger would only be done during  It is settled that no particular form of evidence is required to prove
his spare time, since his other work as studio manager was the priority. the existence of an employer-employee relationship. Any competent and
Respondent then started working on the album. relevant evidence to prove the relationship may be admitted.
In this case, the documentary evidence presented by respondent to
 The album was released and sold to market. However, the agreed prove that he was an employee of petitioner are as follows: (a) a
compensation to Respondent did not fulfilled by Petitioner. In fact, document denominated as "payroll" (dated July 31, 2001 to March 15,
Petitioner dismissed Respondent when the latter insisted his 2002) certified correct by petitioner, which showed that respondent
compensation for the album. received a monthly salary of ₱7,000.00 (₱3,500.00 every 15th of the
month and another ₱3,500.00 every 30th of the month) with the
 According to Petitioner, that respondent was not hired as studio corresponding deductions due to absences incurred by respondent; and
manager, composer, technician or as an employee in any other capacity of (2) copies of petty cash vouchers, showing the amounts he received and
Celkor. Respondent could not have been hired as a studio manager, since signed for in the payrolls.
the recording studio has no personnel except petitioner.  The power of control refers merely to the existence of the power. It
is not essential for the employer to actually supervise the performance
 According to petitioner, they arrived at sharing of profits based on of duties of the employee, as it is sufficient that the former has a right to
the mutual understanding that respondent was just an amateur composer wield the power. Nevertheless, petitioner stated in his Position Paper
with no track record whatsoever in the music industry, had no definite that it was agreed that he would help and teach respondent how to use
source of income, had limited experience as an arranger, had no the studio equipment. In such case, petitioner certainly had the power
knowledge of the use of sound mixers or digital arranger and that to check on the progress and work of respondent.
petitioner would help and teach him how to use the studio equipment;  On the other hand, petitioner failed to prove that his relationship
that petitioner would shoulder all the expenses of production and provide with respondent was one of partnership. Such claim was not supported
the studio and equipment as well as his knowledge in the use thereof; by any written agreement. The Court notes that in the payroll dated July
and Celine Mei Lirio would sing the songs. 31, 2001 to March 15, 2002, there were deductions from the wages of
respondent for his absence from work, which negates petitioner’s claim
 Petitioner asserted that from the aforesaid terms and conditions, his that the wages paid were advances for respondent’s work in the
relationship with respondent is one of an informal partnership under partnership.
Article 1767 of the New Civil Code, since they agreed to contribute  In termination cases, the burden is upon the employer to show by
money, property or industry to a common fund with the intention of substantial evidence that the termination was for lawful cause and
dividing the profits among themselves. Petitioner had no control over the validly made. Article 277 (b) of the Labor Code puts the burden of
time and manner by which respondent composed or arranged the songs, proving that the dismissal of an employee was for a valid or authorized
except on the result thereof. Respondent reported to the recording studio cause on the employer, without distinction whether the employer
between 10:00 a.m. and 12:00 noon. Hence, petitioner contended that no admits or does not admit the dismissal.40 For an employee’s dismissal to
employer-employee relationship existed between him and the be valid, (a) the dismissal must be for a valid cause, and (b) the
respondent, and there was no illegal dismissal to speak of. employee must be afforded due process. Procedural due process
requires the employer to furnish an employee with two written notices
before the latter is dismissed: (1) the notice to apprise the employee of
the particular acts or omissions for which his dismissal is sought, which is
28 Marticio Semblante Summary: This case involves a dispute between petitioners Marticio Whether or not respondents' appeal was properly perfected. - YES MENDOZA
and Dubrick Pilar v. Semblante and Dubrick Pilar, who claim to be employees of The Court finds that although respondents failed to post an appeal bond
CA, Gallera de respondents-spouses Vicente and Maria Luisa Loot, the owners of Gallera within the 10-day period, the substantial merits of the case and the fact
Mandaue and de Mandaue (the cockpit). Petitioners were hired as the official masiador that petitioners were not employees of respondents justify the
Spouses Loot; GR and sentenciador, respectively, of the cockpit. However, respondents relaxation of the rule on appeal bond posting.
196426 (2011) denied that petitioners were their employees and argued that they were
associates of an independent contractor. The labor arbiter ruled in favor Whether or not petitioners were employees of respondents. - NO
of petitioners, finding them to be regular employees and ordering The Court agrees with the findings of the NLRC and the Court of Appeals
respondents to pay backwages and separation pay. The NLRC initially that petitioners were akin to independent contractors. They possessed
denied respondents' appeal for failure to post an appeal bond, but later unique skills, expertise, and talent that distinguished them from ordinary
reversed its decision. The Court of Appeals affirmed the NLRC's ruling, employees. Respondents had no part in their selection and engagement,
finding that petitioners were akin to independent contractors and not did not control their work, and did not provide them with tools or
employees of respondents. instrumentalities for their work.

Facts:
Petitioners were hired by respondents as the official masiador and
sentenciador of Gallera deMandaue. Petitioners received weekly
compensation for their services.
They worked on specific days and hours each week.Petitioners were
issued employees' identification cards.
On November 14, 2003, petitioners were denied entry into the cockpit
and informed of thetermination of their services. Petitioners filed a
complaint for illegal dismissal against respondents.
The labor arbiter ruled in favor of petitioners, finding them to be regular
employees and orderingrespondents to pay backwages and separation
pay.
Respondents appealed the decision but failed to post an appeal bond
within the 10-day period.- The NLRC initially denied the appeal for
non-perfection but later reversed its decision, considering the appeal
meritorious. The Court of Appeals affirmed the NLRC's ruling, finding that
petitioners were akin to independentcontractors and not employees of
respondents.
29 9. Management De Lassale University Facts: WON the “First in, first out” method being proposed by the Union is CLAVERIA
Prerogatives vs De la Salle Dela Salle University (hereinafter referred to as UNIVERSITY) and Dela valid to be included in the CBA. - NO.
University Employees Salle University Employees Association — National Federation of Teachers The voluntary arbitrator upheld the ". . . elementary right and
Association 330 SCRA and Employees Union (DLSUEA-NAFTEU), which is composed of regular prerogative of the management of the University to select and/or
363 (2000) non-academic rank and file employees, (hereinafter referred to as UNION) choose its employees, a right equally recognized by the Constitution and
entered into a collective bargaining agreement with a life span of three (3) the law. The employer, in the exercise of this right, can adopt valid and
years, that is, from December 23, 1986 to December 22, 1989. equitable grounds as basis for lay-off or separation, like performance,
During the freedom period, or 60 days before the expiration of the said qualifications, competence, etc. Similarly, the right to transfer or reassign
collective bargaining agreement, the Union initiated negotiations with the an employee is an employer's exclusive right and prerogative."
University for a new collective bargaining agreement which, however, The SC agree with the voluntary arbitrator that as an exercise of
turned out to be unsuccessful. management prerogative, the University has the right to adopt valid and
After several conciliation-mediation meetings, five (5) out of the eleven equitable grounds as basis for terminating or transferring employees. As
(11) issues raised in the Notice of Strike were resolved by the parties. A we ruled in the case of Autobus Workers' Union (AWU) and Ricardo
partial collective bargaining agreement was thereafter executed by the Escanlar vs. National Labor Relations Commission, "[a] valid exercise of
parties. management prerogative is one which, among others, covers: work
On March 18, 1991, the parties entered into a Submission Agreement, assignment, working methods, time, supervision of workers, transfer of
identifying the remaining six (6) unresolved issues for arbitration. employees, work supervision, and the discipline, dismissal and recall of
One of those unresolved issues is proposal of the Union of the use of workers. Except as provided for, or limited by special laws, an employer
"last-in-first-out" method in case of retrenchment and transfer to other is free to regulate, according to his own discretion and judgment, all
schools or units. The Union relies on social justice and equity to support aspects of employment."
its proposition, and submits that the University's prerogative to select
and/or choose the employees it will hire is limited, either by law or
agreement, especially where the exercise of this prerogative might result
in the loss of employment. The Union further insists that its proposal is ". .
. in keeping with the avowed State policy '(q) To ensure the participation
of workers in decision and policy-making processes affecting their rights,
duties and welfare' (Art. 211, Labor Code, as amended)."
On the other hand, the University asserts its management prerogative
and counters that "[w]hile it is recognized that this right of employees and
workers to 'participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law' has been enshrined in
the Constitution (Article III, [should be Article XIII], Section 3, par. 2), said
participation, however, does not automatically entitle the Union to dictate
as to how an employer should choose the employees to be affected by a
retrenchment program. The employer still retains the prerogative to
determine the reasonable basis for selecting such employees."
30 San Miguel Brewery FACTS: ISSUE: W/N the CDS is a valid exercise of management prerogatives. ADARNA
Sales Force Union • On April 17, 1978, a collective bargaining agreement (effective on May
(PTGWO) vs Ople GR 1, 1978 until January 31, 1981) was entered into by petitioner San Miguel RULING: YES.
No. 53515 (1989) 170 Corporation Sales Force Union (PTGWO), and the private respondent, San • Public respondent was correct in holding that the CDS is a valid
SCRA 25 (1989) Miguel Corporation, Section 1, of Article IV of which provided as follows: exercise of management prerogatives: "Except as limited by special laws,
"Employees within the appropriate bargaining unit shall be entitled to a an employer is free to regulate, according to his own discretion and
basic monthly compensation plus commission based on their respective judgment, all aspects of employment, including hiring, work
sales." In September 1979, the company introduced a marketing scheme assignments, working methods, time, place and manner of work, tools to
known as the "Complementary Distribution System" (CDS) whereby its be used, processes to be followed, supervision of workers, working
beer products were offered for sale directly to wholesalers through San regulations, transfer of employees, work supervision, lay-off of workers
Miguel's sales offices. and the discipline, dismissal and recall of work. . . . (NLU vs. Insular La
• Petitioner filed a complaint for unfair labor practice in the Ministry of Yebana Co., 2 SCRA 924; Republic Savings Bank vs. CIR, 21 SCRA 226,
Labor, with a notice of strike on the ground that the CDS was contrary to 235.)" (Perfecto V. Hernandez, Labor Relations Law, 1985 Ed., p. 44.)
the existing marketing scheme whereby the Route Salesmen were • Every business enterprise endeavors to increase its profits. In the
assigned specific territories within which to sell their stocks of beer, and process, it may adopt or devise means designed towards that goal.
wholesalers had to buy beer products from them, not from the company. • So long as a company's management prerogatives are exercised in
It was alleged that the new marketing scheme violates Section 1, Article IV good faith for the advancement of the employer's interest and not for
of the collective bargaining agreement because the introduction of the the purpose of defeating or circumventing the rights of the employees
CDS would reduce the take-home pay of the salesmen and their truck under special laws or under valid agreements, this Court will uphold
helpers for the company would be unfairly competing with them. them (LVN Pictures Workers vs. LVN, 35 SCRA 147; Phil. American
• MINISTER OF LABOR: approved the private respondent's CDS and Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634; Phil.
dismissed the petitioner's complaint for unfair labor practice. Refining Co. vs. Garcia, 18 SCRA 110). San Miguel Corporation's offer to
compensate the members of its sales force who will be adversely
affected by the implementation of the CDS, by paying them a so-called
"back adjustment commission" to make up for the commissions they
might lose as a result of the CDS, proves the company's good faith and
lack of intention to bust their union.
31 Capitol Medical On January 1974, petitioner Capitol Medical Center, Inc. (Capitol) hired Dr. Whether or not the CA unduly interfered with Capitol's exercise of its TAN
Center vs Meris GR Cesar Meris (Dr. Meris) as head of its Industrial Service Unit (ISU). Dr. management prerogative (No)
No. 155098 (2005) Meris performed dual functions of providing medical services to Capitol’s
470 SCRA 125 (2005) more than 500 employees and health workers as well as to employees Work is a necessity that has economic significance deserving legal
and workers of companies having retainer contracts with it. On March protection. The social justice and protection to labor provisions in the
1992, he received from Capitol’s president and chairman of the board, Dr. Constitution dictate so.
Thelma Navarette-Clemente (Dr. Clemente), a notice advising him of the
management’s decision to close or abolish the ISU. The letter also Employers are also accorded rights and privileges to assure their
informed Dr. Meris of the termination of his services. He then filed a self-determination and independence and reasonable return of capital.
complaint for illegal dismissal against Capitol and Dr. Clemente. This mass of privileges comprises the so-called management
prerogatives. Although they may be broad and unlimited in scope, the
The LA found for the petitioner. The LA held that the abolition of the ISU State has the right to determine whether an employer’s privilege is
was a valid and lawful exercise of management prerogatives and based on exercised in a manner that complies with the legal requirements and
the document provided by the petitioner, the LA was convinced that the does not offend the protected rights of labor. One of the rights accorded
petitioner was operating at a loss. The NLRC modified the decision of the an employer is the right to close an establishment or undertaking.
LA. It held that in the exercise of Capitol’s management prerogatives, it
had the right to close the ISU even if it was not suffering business losses in The right to close the operation of an establishment or undertaking is
light of Article 283 of the Labor Code and jurisprudence. explicitly recognized under the Labor Code as one of the authorized
causes in terminating employment of workers, the only limitation being
The CA, however, found that the document submitted by the petitioner that the closure must not be for the purpose of circumventing the
was prepared long after the dismissal of Dr. Meris. Thus, it was not provisions on termination of employment embodied in the Labor Code.
available when Dr. Meris was dismissed. The CA also found that the
document was tainted with irregular entries. According to the CA, In this case,
Capitol’s evidence failed to meet the standard of a sufficient and
adequate proof of loss necessary to justify the abolition of the ISU. The
appellate court went on to hold that the ISU was not in fact abolished, its
operation and management having merely changed hands from Dr. Meris
to Dr. Clemente; and that there was a procedural lapse in terminating the
services of Dr. Meris, no written notice to the Department of Labor and
Employment (DOLE) of the ISU abolition having been made, thereby
violating the requirement embodied in Article 283. The appellate court,
concluding that Capitol failed to strictly comply with both procedural and
substantive due process, a condition sine qua non for the validity of a case
of termination, held that Dr. Meris was illegally dismissed.
32 Manila Pavillion vs FACTS: "Whether MPH retained the authority to continue with the CAMPOSUE
Delada GR No. This stemmed from a grievance filed by respondent Henry Delada against administrative case against Delada for insubordination and willful LO CERENO
189947 [G.R. No. petitioner Manila Pavilion Hotel (MPH). Delada was the Union President disobedience of the transfer order backup)
189947. January 25, of the Manila Pavilion Supervisors Association at MPH originally assigned
2012.] as Head Waiter of Rotisserie then reassigned him as Head Waiter of YES.
Seasons Coffee Shop but respondent declined the inter-outlet transfer When the issue of whether he could validly refuse to obey the transfer
and instead asked for a grievance meeting on the matter, pursuant to orders was brought before the Court in the case Allied Banking
their Collective Bargaining Agreement (CBA). He also requested his Corporation, it held that the refusal to obey a valid transfer order
retention as Head Waiter of Rotisserie while the grievance procedure was constitutes willful disobedience of a lawful order of an employer.
ongoing. PMH denied the request and he kept on reporting to Employees may object to, negotiate and seek redress against employers
Rotisserie.MPH sent him several memoranda requiring him to explain in for rules or orders that they regard as unjust or illegal. However, until
writing why he should not be penalized for the following offenses: serious and unless these rules or orders are declared illegal or improper by
misconduct; willful disobedience of the lawful orders of the employer; competent authority, the employees ignore or disobey them at their
gross insubordination; gross and habitual neglect of duties; and willful peril. =In Allied Banking case, Galanida's continued refusal to obey Allied
breach of trust. Delada persistently rebuffed orders for him to report to Bank's transfer orders, we hold that the bank dismissed Galanida for just
his new assignment. cause in accordance with Article 282(a) of the Labor Code. Galanida is
thus not entitled to reinstatement or to separation pay.
Despite the notices from MPH, Delada persistently rebuffed orders for
him to report to his new assignment. According to him, since the Pursuant to Allied Banking, unless the order of MPH is rendered invalid,
grievance there is a presumption of the validity of that order. Since the PVA
machinery under their CBA had already been initiated, his transfer must eventually ruled that the transfer order was a valid exercise of
be held in abeyance. Thus, on 9 May 2007, MPH initiated administrative management prerogative, we hereby reverse the Decision and the
proceedings against him. Resolution of the CA affirming the Decision of the PVA in this respect.
On 14 December 2007, the PVA issued a Decision and ruled that the MPH had the authority to continue with the administrative proceedings
transfer of Delada was a valid exercise of management prerogative. for insubordination and willful disobedience against Delada and to
According to the panel, the transfer order was done in the interest of the impose on him the penalty of suspension. As a consequence, petitioner
efficient and economic operations of MPH, and that there was no malice, is not liable to pay back wages and other benefits for the period
bad corresponding to the penalty of 90-day suspension.
faith, or improper motive attendant upon the transfer of Delada to
Seasons Coffee Shop

33 Blue Dairy FACTS: ISSUE: WHETHER OR NOT RECALDE’S TRANSFER WAS UNREASONABLE.? JUAN
Corporation vs NLRC Blue Dairy Corporation was, engaged in the processing of dairy and
314 SCRA 401 (1999) chocolate products, juices and vegetable hired Elvira R. Recalde as a food HELD: YES. The Transfer of Recalde was unreasonable. Management
technologist in its laboratory. Recalde accompanied Production Manager prerogative cannot be used as a subterfuge by the employer to rid
Editha N. Nicolas in conducting a sensory evaluation of vanilla syrup in himself of an undesirable worker. In particular, the employer must be
one of the outlets of a client. While on their way back to the office a post able to show that the transfer is not unreasonable, inconvenient or
fell on the company vehicle they were riding due to a raging typhoon prejudicial to the employee; nor does it involve a demotion in rank or a
damaging the vehicle's windshield and side mirror. Later, Recalde was diminution of his salaries, privileges and other benefits.
transferred from the laboratory to the vegetable processing section where
she cored lettuce, minced and repacked garlic and performed similar Should the employer fail to overcome this burden of proof, the
work, and was restricted from entering the laboratory. She was unhappy. employees transfer shall be tantamount to constructive dismissal, which
has been defined as a quitting because continued employment is
She considered her new job humiliating and menial. She later stopped rendered impossible, unreasonable or unlikely; as an offer involving a
reporting for work. She sent a letter to Blue Dairy Corporation that she demotion in rank and diminution in pay. Likewise, constructive dismissal
will no longer report for work because of their drastic and oppressive exists when an act of clear discrimination, insensibility or disdain by an
action. Recalde then filed a complaint against Blue Dairy Corporation for employer has become so unbearable to the employee leaving him with
constructive dismissal and non-payment of premium pay. Petitioners no option but to forego with his continued employment.
contended that Recalde was given a less sensitive assignment outside of
the laboratory on account of her dishonesty which resulted in loss of trust In the present case, petitioners failed to justify Recaldes transfer from
and confidence. They seriously took into account the result of the the position of food technologist in the laboratory to a worker in the
investigation that Recalde was actually scouting for a new residence using vegetable processing section. In petitioners view, she was dishonest such
company vehicle without prior permission from the General Manager and that they lost their trust and confidence in her. Yet, it does not appear
during office hours, in violation of company's General Rules and that Recalde was provided an opportunity to refute the reason for the
Regulation, to that effect such act of dishonesty could even have merited transfer. Nor was Recalde notified in advance of her impending transfer
dismissal from employment had they adhered simply to jurisprudential which was, as we shall elucidate later, a demotion in rank.
rule but took into account instead the spirit of the approaching Christmas
season.
34 Almodiel vs NLRC FACTS ISSUE WON the termination of the petitioner on the ground of CISTER
223 SCRA 341 (1993) Petitioner is a CPA hired as Cost Accounting Manager of Respondent redundancy was tainted with malice, bad faith and irregularity
Raytheon Philippines, Inc. As such, his major duties were (1) plan,
coordinate, and carry out year-end physical inventory; (2) formulate and HELD An employer has no legal obligation to keep more employees that
issue out hard copies of standard product costing and other cost/pricing are necessary for the operation of the business. Considering further that
analysis if needed and required; and set up the written cost accounting petitioner held a managerial position, Raytheon had a broad latitude of
system for the whole company. However, when the standard cost discretion in abolishing the position. The reason obviously is that officers
accounting system for Raytheon plans worldwide was adopted and in such key positions perform not only functions which by nature require
installed in the Philippine operations, the services of the petitioner was the employer’s full trust and confidence but also functions that spell the
reduced to only the submission of period reports that would use success or failure of an enterprise. Likewise destitute of merit is
computerized forms prescribed and designed by the international head petitioner’s imputation of unlawful discrimination when Raytheon
office of the company in California, USA. On January 27, 1989, petitioner caused corollary functions appertaining to cost accounting to be
was told of the abolition of his position on the ground of redundance. He absorbed by a resident alien without working permit. Article 40 of the
was constrained to file the complaint for illegal dismissal after his request Labor Code which requires employment permit refers to non-resident
to have him transferred to another department was denied. He also aliens.
alleged that the functions of his position were absorbed by the
Payroll/MIS/Finance Department which is headed by a resident alien
without working permit from the DOLE. The NLRC ruled for Raytheon and
directed the latter to pay the petitioner P100,000.00 as separation pay.
Hence, this petition.
35 Interphil Laboratories FACTS: Petitioner is the sole and exclusive bargaining agent of the ISSUE: W/N the respondents have engaged in "overtime boycott" and MICALLER
(FFW) vs Interphil – rank-and-file employees of Respondent. They had a CBA. "work slowdown" both amounting to illegal strike.
372 SCRA 658 (2001)
Prior to the expiration of the CBA, respondent company was approached RULING: YES, the evidence presented is equally crystal clear that the
by the petitioner, through its officers. The Union inquired about the stand "overtime boycott" and "work slowdown" committed by the
of the company regarding the duration of the CBA which was set to expire respondents amounted to illegal strike.
in a few months. Salazar told the union officers that the matter could be
best discussed during the formal negotiations which would start soon. In any event, the parties stipulated: Section 1. Regular Working Hours —
A normal workday shall consist of not more than eight (8) hours. The
All the rank-and-file employees of the company refused to follow their regular working hours for the Company shall be from 7:30 A.M. to 4:30
regular two-shift work schedule. The employees stopped working and left P.M. The schedule of shift work shall be maintained; however the
their workplace without sealing the containers and securing the raw company may change the prevailing work time at its discretion, should
materials they were working on. such change be necessary in the operations of the Company. All
employees shall observe such rules as have been laid down by the
To minimize the damage the overtime boycott was causing the company, company for the purpose of effecting control over working hours.
Salazar immediately asked for a meeting with the union officers. In the
meeting, Enrico Gonzales, a union director, told Salazar that the It is evident from the foregoing provision that the working hours may be
employees would only return to their normal work schedule if the changed, at the discretion of the company, should such change be
company would agree to their demands as to the effectivity and duration necessary for its operations, and that the employees shall observe such
of the new CBA. Salazar again told the union officers that the matter could rules as have been laid down by the company. In the case before us,
be better discussed during the formal renegotiations of the CBA. Since the Labor Arbiter Caday found that respondent company had to adopt a
union was apparently unsatisfied with the answer of the company, the continuous 24-hour work daily schedule by reason of the nature of its
overtime boycott continued. In addition, the employees started to engage business and the demands of its clients. It was established that the
in a work slowdown campaign during the time they were working, thus employees adhered to the said work schedule since 1988. The
substantially delaying the production of the company. employees are deemed to have waived the eight-hour schedule since
they followed, without any question or complaint, the two-shift schedule
Respondent company filed with the National NLRC a petition to declare while their CBA was still in force and even prior thereto. The two-shift
illegal petitioner union’s “overtime boycott” and “work slowdown” which, schedule effectively changed the working hours stipulated in the CBA. As
according to respondent company, amounted to illegal strike. It also filed the employees assented by practice to this arrangement, they cannot
with Office Secretary of Labor a petition for assumption of jurisdiction. now be heard to claim that the overtime boycott is justified because
Secretary of Labor Nieves Confesor issued an assumption order over the they were not obliged to work beyond eight hours.
labor dispute.
It is thus undisputed that members of the union by their own volition
Labor Arbiter Caday submitted his recommendation to the then Secretary decided not to render overtime services in April 1993. Petitioner union
of Labor Leonardo A. Quisumbing. Then Secretary Quisumbing approved even admitted this in its Memorandum, dated 12 April 1999, filed with
and adopted the report in his Order, finding illegal strike on the part of the Court of Appeals, as well as in the petition before this Court, which
petitioner Union. both stated that "(s)ometime in April 1993, members of herein
petitioner, on their own volition and in keeping with the regular working
hours in the Company x x x decided not to render overtime". Such
admission confirmed the allegation of respondent company that
petitioner engaged in "overtime boycott" and "work slowdown" which,
to use the words of Labor Arbiter Caday, was taken as a means to coerce
respondent company to yield to its unreasonable demands.

More importantly, the "overtime boycott" or "work slowdown" by the

employees constituted a violation of their CBA, which prohibits the
union or employee, during the existence of the CBA, to stage a strike or
engage in slowdown or interruption of work.