labor case digest

Abao, Gennelyn M. Arellano University School of Law20140405 Labor Law Review

MATLING INDUSTRIAL AND COMMERCIAL CORP., ET AL vs. COROSG.R. No. 157802, October 13, 2010

Bersamin, J.

FACTS: Respondent Ricardo Coros was dismissed by Petitioner Matling as its VP for Finance and Administratation. Coros then filed an illegal dismissal case with the NLRC, Sub-Regional Arbitration Branch XII, Iligan City. Petitioners moved to dismiss the case on the ground that the complaint pertained to the jurisdiction of the Securities and Exchange Commission (SEC) due to the controversy being intra-corporate inasmuch as the respondent was a member of Matlings Board of Directors aside from being its Vice-President for Finance and Administration prior to his termination. Coros opposed the same insisting that his status as a member of Matlings Board of Directors was doubtful, considering that he had not been formally elected as such; that he did not own a single share of stock in Matling, considering that he had been made to sign in blank an undated indorsement of the certificate of stock he had been given in 1992; that Matling had taken back and retained the certificate of stock in its custody; and that even assuming that he had been a Director of Matling, he had been removed as the Vice President for Finance and Administration, not as a Director, a fact that the notice of his termination dated April 10, 2000 showed.

The Labor Arbiter dismissed the case. On Appeal, the NLRC set aside the decision of the LA, stating that such VP position was not listed in the Company's Constitution and By-Laws; hence, Coros was not a corporate officer. The motion for reconsideration by petitioners was denied.

Petitioners filed a petition for certiorari with the CA, to which the latter dismissed: Coros' position was not a corporate office but an ordinary office. Hence, this petition

ISSUE: Whether the LA or the RTC had jurisdiction over his complaint for illegal dismissal.

HELD: Coros’ position was an ordinary office, not a corporate office. The Board of Directors of Matling could not validly delegate the power to create a corporate office to the President, in light of Section 25 of the Corporation Code requiring the Board of Directors itself to elect the corporate officers. Verily, the power to elect the corporate officers was a discretionary power that the law exclusively vested in the Board of Directors, and could not be delegated to subordinate officers or agents. The office of Vice President for Finance and Administration, created by Matling’s President pursuant to By Law No. V, was an ordinary, not a corporate, office.

Also, the LA has jurisdiction over the case. Even though he might have become a stockholder of Matling in 1992, his promotion to the position of Vice President for Finance and Administration in 1987 was by virtue of the length of quality service he had rendered as an employee of Matling. His subsequent acquisition of the status of Director/stockholder had no relation to his promotion. Besides, his status of Director/stockholder was unaffected by his dismissal from employment as Vice


President for Finance and Administration. The criteria for distinguishing between corporate officers who may be ousted from office at will, on one hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand, do not depend on the nature of the services performed, but on the manner of creation of the office. In the respondent’s case, he was supposedly at once an employee, a stockholder, and a Director of Matling.


GENERAL MILLING CORPORATION. vs. CA G.R. No. 146728, February 11, 2004

Quisumbing, J.:

FACTS: General Milling Corporation (GMC) and the General Milling Corporation Independent Labor Union concluded a collective bargaining agreement (CBA) which included the issue of representation effective for a term of three years. The CBA was effective for three years retroactive to December 1, 1988. Hence, it would expire on November 30, 1991. On November 29, 1991, the Union tried to renew the CBA after it expired but the Company did not recognize them to be existing due to alleged massive disaffiliation of members with it.

On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The Union protested and requested to have the matter submitted to the grievance procedure in the CBA, but the Company refused based on its previous letter stating that it felt there was no basis to negotiate with a union which no longer existed.

Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration Division, Cebu City. The complaint alleged unfair labor practice on the part of GMC. The labor arbiter dismissed the case with the recommendation that a petition for certification election be held to determine if the union still enjoyed the support of the workers. The union appealed to the NLRC.

NLRC set aside the decision of the LA, stating that the Company abide by the 1991-1993 CBA draft that the union proposed, being still the exclusive bargaining agent. Upon GMC’s Motion for Reconsideration, NLRC set aside its decision. CA however reversed the decision of the NLRC. Hence, this petition

ISSUE: Whether GMC is guilty of unfair labor practice for violating the duty to bargain collectively and/or interfering with the right of its employees to self-organization.

Whether the CA gravely abused its discretion in imposing upon GMC the draft CBA proposed by the union for two years to begin from the expiration of the original CBA.

HELD: GMC is guilty on the first issue. It is indisputable that when the union requested for a renegotiation of the economic terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent of the workers, because it was seeking said renegotiation within five (5) years. GMCs failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it turned out to be utterly baseless.

There is no abuse. SC was not inclined to gratify GMC with an extended term of the old CBA after it resorted to delaying tactics to prevent negotiations. Since it was


GMC which violated the duty to bargain collectively, based on Kiok Loy and Divine Word University of Tacloban, it had lost its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union. Article 253 of the Labor Code, as amended, mandates the parties to keep the status quo while they are still in the process of working out their respective proposal and counter proposal. The general rule is that when a CBA already exists, its provision shall continue to govern the relationship between the parties, until a new one is agreed upon. The rule necessarily presupposes that all other things are equal. That is, that neither party is guilty of bad faith. However, when one of the parties abuses the grace period by purposely delaying the bargaining process, a departure from the general rule is warranted.


COLEGIO DE SAN JUAN DE LETRAN vs. ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN

G.R. No. 141471, September 18, 2000Kapunan, J.

FACTS: On December 1992, Salvador Abtria, then President of respondent union initiated the renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San Juan de Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. Ambas, newly elected union president wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the union members, who eventually rejected the said CBA.

On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a new five-year CBA starting 1994-1999. During the course of the renegotiation, Ambas was dismissed on the ground of insubordination. Later on, the union held a strike. The Secretary of Labor and Employment assumed jurisdiction and ordered all striking employees including the union president to return to work and for petitioner to accept them back under the same terms and conditions before the actual strike. Petitioner readmitted the striking members except Ambas. The parties then submitted their pleadings including their position papers which were filed on July 17, 1996. Illegal dismissal case on 2 counts of unfair labor practice was filed against the School. The Secretary and the CA, on appeal to it, held in favor of the union. Hence this petition.

ISSUE: Whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for a new CBA upon mere information that a petition for certification has been filed by another legitimate labor organization?

Whether the termination of the union president amounts to an interference of the employees' right to self-organization?

HELD: The petition is without merit.

Article 252 of the Labor Code defines the meaning of the phrase "duty to bargain collectively," as follows:

Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession.

Noteworthy in the above definition is the requirement on both parties of the performance of the mutual obligation to meet and convene promptly and


expeditiously in good faith for the purpose of negotiating an agreement. Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL) (hereinafter, "union") lived up to this requisite when it presented its proposals for the CBA to petitioner on February 7, 1996. On the other hand, petitioner devised ways and means in order to prevent the negotiation.

Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply to the proposals presented by the latter and is an indication of bad faith. More than a month after the proposals were submitted by the union, petitioner still had not made any counter-proposals, in violation of the procedure in Article 250 of the Labor Code, as amended.

Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice.

In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the employer. The petition must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost is that a petition for certification election must be filed during the sixty-day freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides that: "If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement." The rule is based on Article 232, in relation to Articles 253, 253-A and 256 of the Labor Code. No petition for certification election for any representation issue may be filed after the lapse of the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed. Hence, the contract bar rule still applies. The purpose is to ensure stability in the relationship of the workers and the company by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period.

The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years her working schedule was from Monday to Friday. However, things began to change when she was elected as union president and when she started negotiating for a new CBA. Thus, it


was when she was the union president and during the period of tense and difficult negotiations when her work schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was changed, she was outrightly dismissed for alleged insubordination.

Admittedly, management has the prerogative to discipline its employees for insubordination. But when the exercise of such management right tends to interfere with the employees' right to self-organization, it amounts to union-busting and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly designed to frustrate the Union in its desire to forge a new CBA with the College that is reflective of the true wishes and aspirations of the Union members. Her dismissal was merely a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her from the premises of the College. It has the effect of busting the Union, stripping it of its strong-willed leadership. When management refused to treat the charge of insubordination as a grievance within the scope of the Grievance Machinery, the action of the College in finally dismissing her from the service became arbitrary, capricious and whimsical, and therefore violated Ms. Ambas' right to due process."


ST. LUKE’S MEDICAL CENTER, INC. vs. TORRES 223 SCRA 779, 1993

Melo, J.

FACTS: Private respondent SLMCEA-AFW brought to the attention of petitioner a letter dated July 4, 1990 that the 1987-1990 was about to expire, and manifested in the process that private respondent wanted to renew the CBA. This development triggered round-table talks on which occasions petitioner proposed, among other items, a maximum across-the-board monthly salary increase of P375.00 per employee, to which proposal private respondent demanded a P1,500.00 hike or 50% increase based on the latest salary rate of each employee, whichever is higher.

A deadlock on issues, especially that bearing on across-the-board monthly and meal allowances followed and to pre-empt the impending strike as voted upon by a majority of private respondent's membership, petitioner lodged the petition below. The Secretary of Labor immediately assumed jurisdiction and the parties submitted their respective pleadings.

On January 28, 1991, public respondent Secretary of Labor issued the Order now under challenge. Said Order contained a disposition on both the economic and non-economic issues raised in the petition. One of the rulings in the order is the granting of the retroactive effect to the enforceability of the CBA.

Petitioner argues that the Order of January 28, 1991 is violative of Article 253-A of the Labor Code, particularly its provisions on retroactivity. Said Article pertinently provides:

xxx Any agreement on such other provisions of the collective bargaining agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in the collective bargaining agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining agreement, the parties may exercise their rights under this Code.

Petitioner argues that in granting retroactive effect to the enforceability of the CBA, public respondent committed an act contrary to the above provision of law, pointing out that the old CBA expired on July 30, 1990 and the questioned order was issued on January 28, 1991.

ISSUE: Whether the CBA should be given retroactive effect

HELD: The effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the previous CBA, contrary to the position of petitioner. Under the circumstances of the case, Article 253-A cannot be property applied to herein case. As


correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing petitioner's Motion for Reconsideration —

Anent the alleged lack of basis for the retroactivity provisions awarded, we would stress that the provision of law invoked by the Hospital, Article 253-A of the Labor Code, speak of agreements by and between the parties, and not arbitral awards . . . (p. 818, Rollo.)

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263 (g) of the Labor Code, such as herein involved, public respondent is deemed vested with plenary and discretionary powers to determine the effectivity thereof.


PIER 8 ARRASTRE & STEVEDORING SERVICES, INC. vs. ROLDAN-CONFESSOR G.R. No. 110854, February 13, 1995

Puno, J.

FACTS: Petitioner corporation and private respondent labor union entered into a three-year Collective Bargaining Agreement (CBA) with expiry date on November 27, 1991. During the freedom period, the National Federation of Labor Unions (NAFLU) questioned the majority status of Private respondent through a petition for certification election. The election conducted on February 27, 1992 was won by private respondent. On March 19 19912, private respondent was certified as the sole and exclusive bargaining agent of petitioner’s rank and file employees.

On June 22, 1992, private respondent’s CBA proposals were received by petitioner. Counter-proposals were made by petitioner. Negotiations collapsed, and on August 24, 1992, private-respondent filed a notice of strike with the NCMB. The NCMB tried but failed to settle the parties’ controversy. On September 30, 1992, the Secretary of Labor assumed jurisdiction over the dispute. She resolved the bargaining deadlock between the parties through an Order, dated March 4, 1993.

On her order with regard to the effectivity of the CBA, she held that the CBA shall be effective from the time she assumed jurisdiction over the dispute, that is, on 22 September 1992, and shall remain effective for five (5) years thereafter. Petitioner sought partial reconsideration of the order. On June 8, 1993, public respondent affirmed her findings, except for the date of effectivity of the CBA which was changed to September 30, 1992. This is the date when she assumed jurisdiction over the deadlock.

ISSUE: When should the new CBA be given effect?

HELD: The applicable laws are Articles 253 and 253- A of the Labor Code, thus:

Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. — When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.

and;

Art. 253-A. Terms of a collective bargaining agreement. — Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside the sixty-day period immediately before the date of expiry of such five year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement on such


other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of collective bargaining agreement, the parties may exercise their rights under this Code.

In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this court interpreted the above law as follows:

In light of the foregoing, this Court upholds the pronouncement of the NLRC holding the CBA to be signed by the parties effective upon the promulgation of the assailed resolution. It is clear and explicit from Article 253-A that any agreement on such other provisions of the CBA shall be given retroactive effect only when it is entered into within six (6) months from its expiry date. If the agreement was entered into outside the six (6) month period, then the parties shall agree on the duration of the retroactivity thereof.

The assailed resolution which incorporated the CBA to be signed by the parties was promulgated June 5, 1989, the expiry date of the past CBA. Based on the provision of Section 253-A, its retroactivity should be agreed upon by the parties. But since no agreement to that effect was made, public respondent did not abuse its discretion in giving the said CBA a prospective effect. The action of the public respondent is within the ambit of its authority vested by existing law.

In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179 (1991), this Court reiterated the rule that although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. It is the duty of both parties to keep the status quo, and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day freedom period and/or until a new agreement is reached by the parties. Applied to the case at bench, the legal effects of the immediate past CBA between petitioner and private respondent terminated, and the effectivity of the new CBA began, only on March 4, 1993 when public respondent resolved their dispute.


MERALCO vs. QUISUMBING G.R. No. 127598, January 27, 1999

Martinez, J.

FACTS: On September 7, 1995, Meralco Employees and Workers Association (MEWA) informed MERALCO of its intention to re-negotiate the terms and conditions of their existing 1992-1997 Collective Bargaining Agreement (CBA) covering the remaining period of two years starting from December 1, 1995 to November 30, 1997. However, despite the series of meetings between the negotiating panels of MERALCO and MEWA, the parties failed to arrive at terms and conditions acceptable to both of them. On April 23, 1996, MEWA filed a Notice of Strike with the NCMB. The NCMB then conducted a series of conciliation meetings but the parties failed to reach an amicable settlement.

The Secretary assumed jurisdiction and made a Return-To-Work Order. The Secretary resolved and awarded to respondents an alleged grossly exorbitant package and others, and also making the CBA effective not on the time the Secretary resolved such matter exercising its discretion.

ISSUE: Whether the retroactivity of arbitral awards shall commence at such time as granted by Secretary.

HELD: Article 253-A serves as the guide in determining when the effectivity of the CBA at bar is to take effect. It provides that the representation aspect of the CBA is to be for a term of 5 years, while

x x x [A]ll other provisions of the Collective Bargaining Agreement shall be re-negotiated not later than 3 years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within 6 months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement shall retroact to the day immediately following such date. If such agreement is entered into beyond 6 months, the parties shall agree on the duration of the effectivity thereof. x x x.

Under these terms, it is clear that the 5-year term requirement is specific to the representation aspect. What the law additionally requires is that a CBA must be re-negotiated within 3 years after its execution. It is in this re-negotiation that gives rise to the present CBA deadlock. If no agreement is reached within 6 months from the expiry date of the 3 years that follow the CBA execution, the law expressly gives the parties - not anybody else - the discretion to fix the effectivity of the agreement.

Significantly, the law does not specifically cover the situation where 6 months have elapsed but no agreement has been reached with respect to effectivity. In this


eventuality, we hold that any provision of law should then apply for the law abhors a vacuum.

One such provision is the principle of hold over, i.e., that in the absence of a new CBA, the parties must maintain the status quo and must continue in full force and effect the terms and conditions of the existing agreement until a new agreement is reached. In this manner, the law prevents the existence of a gap in the relationship between the collective bargaining parties. Another legal principle that should apply is that in the absence of an agreement between the parties, then, an arbitrated CBA takes on the nature of any judicial or quasi-judicial award; it operates and may be executed only respectively unless there are legal justifications for its retroactive application.

Consequently, we find no sufficient legal ground on the other justification for the retroactive application of the disputed CBA, and therefore hold that the CBA should be effective for a term of 2 years counted from December 28, 1996 (the date of the Secretary of Labors disputed order on the parties motion for reconsideration) up to December 27, 1999.

HELD: (February 22, 2000)

Labor laws are silent as to when an arbitral award in a labor dispute where the Secretary had assumed jurisdiction by virtue of Article 263 (g) of the Labor Code shall retroact. In general, a CBA negotiated within six months after the expiration of the existing CBA retroacts to the day immediately following such date and if agreed thereafter, the effectivity depends on the agreement of the parties. On the other hand, the law is silent as to the retroactivity of a CBA arbitral award or that granted not by virtue of the mutual agreement of the parties but by intervention of the government. Despite the silence of the law, the Court rules herein that CBA arbitral awards granted after six months from the expiration of the last CBA shall retroact to such time agreed upon by both employer and the employees or their union. Absent such an agreement as to retroactivity, the award shall retroact to the first day after the six-month period following the expiration of the last day of the CBA should there be one. In the absence of a CBA, the Secretarys determination of the date of retroactivity as part of his discretionary powers over arbitral awards shall control.

By petitioners own actions, the Court sees no reason to retroact the subject CBA awards to a different date. The period is herein set at two (2) years from December 1, 1995 to November 30, 1997.

(August 1, 2000)

Upon a reconsideration of the Decision, this Court issued the assailed Resolution which ruled that where an arbitral award granted beyond six months after the expiration of the existing CBA, and there is no agreement between the parties as to the date of effectivity thereof, the arbitral award shall retroact to the first day


after the six-month period following the expiration of the last day of the CBA . In the dispositive portion, however, the period to which the award shall retroact was inadvertently stated as beginning on December 1, 1995 up to November 30, 1997.

This Court turned to the dictates of fairness and equitable justice and thus arrived at a formula that would address the concerns of both sides. Hence, this Court held that the arbitral award in this case be made to retroact to the first day after the six-month period following the expiration of the last day of the CBA, i.e., from June 1, 1996 to May 31, 1998. This Court, therefore, maintains the foregoing rule in the assailed Resolution pro hac vice. It must be clarified, however, that consonant with this rule, the two-year effectivity period must start from June 1, 1996 up to May 31, 1998, not December 1, 1995 to November 30, 1997.

During the interregnum between the expiration of the economic provisions of the CBA and the date of effectivity of the arbitral award, it is understood that the hold-over principle shall govern, viz:

"[I]t shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day freedom period and/or until a new agreement is reached by the parties." Despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed


LMG CHEMICALS CORPORATION vs. SECRETARY OF DOLE G.R. No. 127422, April 17, 2001

Sandoval-Gutierrez, J.

FACTS: LMG Chemicals Corp, (petitioner) is a domestic corporation engaged in the manufacture and sale of various kinds of chemical substances, including aluminum sulfate which is essential in purifying water, and technical grade sulfuric acid used in thermal power plants. Petitioner has three divisions, namely: the Organic Division, Inorganic Division and the Pinamucan Bulk Carriers. There are two unions within petitioner’s Inorganic Division. One union represents the daily paid employees and the other union represents the monthly paid employees. Chemical Workers Union, respondent, is a duly registered labor organization acting as the collective bargaining agent of all the daily paid employees of petitioner’s Inorganic Division.

Sometime in December 1995, the petitioner and the respondent started negotiation for a new CBA as their old CBA was about to expire. They were able to agree on the political provisions of the new CBA, but no agreement was reached on the issue of wage increase With the CBA negotiations at a deadlock, on March 6, 1996, respondent union filed a Notice of Strike with the National Conciliation and Mediation Board, National Capital Region. Despite several conferences and efforts of the designated conciliator-mediator, the parties failed to reach an amicable settlement. The Secretary of Labor and Employment assumed jurisdiction over the dispute and issued the disputed orders.

ISSUE: Whether the Secretary abused its discretion in setting the effectivity of the arbitral awards

HELD: It is well settled in our jurisprudence that the authority of the Secretary of Labor to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest includes and extends to all questions and controversies arising therefrom. The power is plenary and discretionary in nature to enable him to effectively and efficiently dispose of the primary dispute.

In St. Lukes Medical Center, Inc. vs. Torres, a deadlock developed during the CBA negotiations between the management and the union. The Secretary of Labor assumed jurisdiction and ordered that their CBA shall retroact to the date of the expiration of the previous CBA. The management claimed that the Secretary of Labor gravely abused his discretion. This Court held:

xxx

Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the previous CBA, contrary to the position of the petitioner. Under the circumstances of the case, Art. 253-A cannot be properly applied to herein case. As correctly stated by public respondent in his assailed Order of April 12, 1991 -


Anent the alleged lack of basis for retroactivity provisions awarded, We would stress that the provision of law invoked by the Hospital, Article 253-A of the Labor Code, speaks of agreement by and between the parties, and not arbitral awards.

Therefore in the absence of the specific provision of law prohibiting retroactivity of the effectivity of the arbitral awards issued by the Secretary of Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public respondent is deemed vested with plenary powers to determine the effectivity thereof.

Finally, to deprive respondent Secretary of such power and discretion would run counter to the well-established rule that all doubts in the interpretation of labor laws should be resolved in favor of labor. In upholding the assailed orders of respondent Secretary, this Court is only giving meaning to this rule. Indeed, the Court should help labor authorities in providing workers immediate benefits, without being hampered by arbitration or litigation processes that prove to be not only nerve-wracking but financially burdensome in the long run.

As we said in Maternity Childrens Hospital vs. Secretary of Labor:

Social Justice Legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long winded-arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. Labor laws are meant to promote, not to defeat, social justice.


NATIONAL UNION OF BANK EMPLOYEES (NUBE) vs.PHILNABANK EMPLOYEES ASSOCIATION (PEMA) AND PNB

G.R. No.174287, August 12, 2013Peralta, J.

FACTS: Respondent Philippine National Bank (PNB) used to be a government-owned and controlled banking institution established under Public Act 2612, as amended by Executive Order No. 80 dated December 3, 1986 (otherwise known as The 1986 Revised Charter of the Philippine National Bank). Its rank-and-file employees, being government personnel, were represented for collective negotiation by the Philnabank Employees Association (PEMA), a public sector union.

In 1996, the Securities and Exchange Commission approved PNB’s new Articles of Incorporation and By-laws and its changed status as a private corporation. PEMA affiliated with petitioner National Union of Bank Employees (NUBE), which is a labor federation composed of unions in the banking industry, adopting the name NUBE-PNB Employees Chapter (NUBE-PEC). Later, NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB rank-and-file employees. A collective bargaining agreement (CBA) was subsequently signed between NUBE-PEC and PNB covering the period of January 1, 1997 to December 31, 2001.

Following the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-FFW) filed on January 2, 2002 a petition for certification election among the rank-and-file employees of PNB. The petition sought the conduct of a certification election to be participated in by PEMA-FFW and NUBE-PEC.

While the petition for certification election was still pending, two significant events transpired – the independent union registration of NUBE- PEC and its disaffiliation with NUBE.

PEMA sent a letter to the PNB management informing its disaffiliation from NUBE and requesting to stop, effective immediately, the check-off of the P15.00 due for NUBE. Acting thereon, on July 4, 2003, PNB informed NUBE of PEMA’s letter and its decision to continue the deduction of the P15.00 fees, but stop its remittance to NUBE effective July 2003. PNB also notified NUBE that the amounts collected would be held in a trust account pending the resolution of the issue on PEMA’s disaffiliation.

Alleging unfair labor practice (ULP) for non-implementation of the grievance machinery and procedure, NUBE brought the matter to the National Conciliation and Mediation Board (NCMB) for preventive mediation.

ISSUE: Whether PEMA validly disaffiliated itself from NUBE, the resolution of which, in turn, inevitably affects the latter’s right to collect the union dues held in trust by PNB.

HELD: The right of the local members to withdraw from the federation and to form a new local union depends upon the provisions of the union's constitution, by-laws and


charter and, in the absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local union, a local may sever its relationship with its parent.

In the case at bar, there is nothing shown in the records nor is it claimed by NUBE that PEMA was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. This being so, PEMA is not precluded to disaffiliate from NUBE after acquiring the status of an independent labor organization duly registered before the DOLE.

Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously bound the two entities was completely severed. As NUBE was divested of any and all power to act in representation of PEMA, any act performed by the former that affects the interests and affairs of the latter, including the supposed expulsion of Serrana et al., is rendered without force and effect.

Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. The moment that PEMA separated from and left NUBE and exists as an independent labor organization with a certificate of registration, the former is no longer obliged to pay dues and assessments to the latter; naturally, there would be no longer any reason or occasion for PNB to continue making deductions.


HOLY CHILD CATHOLIC SCHOOL vs. HON. PATRICIA STO. TOMASG.R. No. 179146, July 23, 2013

Peralta, J.

FACTS: On May 31, 2002, a petition for certification election was filed by private respondent Pinag-Isang Tinig at Lakas ng Anakpawis – Holy Child Catholic School Teachers and Employees Labor Union (HCCS-TELUPIGLAS), alleging that: PIGLAS is a legitimate labor organization duly registered with the Department of Labor and Employment (DOLE) representing HCCS-TELU-PIGLAS; HCCS is a private educational institution duly registered and operating under Philippine laws; there are approximately one hundred twenty (120) teachers and employees comprising the proposed appropriate bargaining unit; and HCCS is unorganized, there is no collective bargaining agreement or a duly certified bargaining agent or a labor organization certified as the sole and exclusive bargaining agent of the proposed bargaining unit within one year prior to the filing of the petition.

Petitioner school assails the petition for certification election filed by private respondent. Among the 120 members, some are vice-principals, department heads, coordinators, supervisors, and other non-teaching personnel along with regular teaching staff. It insisted that, for not being in accord with Article 245 of the Labor Code, private respondent is an illegitimate labor organization lacking in personality to file a petition for certification election, as held in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union; and an inappropriate bargaining unit for want of community or mutuality of interest, as ruled in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and Employment and De La Salle University Medical Center and College of Medicine v. Laguesma.

ISSUE: Whether a petition for certification election is dismissible on the ground that the labor organization’s membership allegedly consists of supervisory and rank-and-file employees.

HELD: Following the doctrine laid down in Kawashima and SMCC-Super, it must be stressed that petitioner cannot collaterally attack the legitimacy of private respondent by praying for the dismissal of the petition for certification election:

Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election. The employer's only right in the proceeding is to be notified or informed thereof.


Article 212(g) of the Labor Code defines a labor organization as "any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment."

On the other hand, a bargaining unit has been defined as a "group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicated to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law

The teaching and non-teaching personnel of petitioner school must form separate bargaining units. Thus, the order for the conduct of two separate certification elections, one involving teaching personnel and the other involving non-teaching personnel. It should be stressed that in the subject petition, private respondent union sought the conduct of a certification election among all the rank-and-file personnel of petitioner school.


GOYA, INC. vs. GOYA, INC. EMPLOYEES UNION-FFWG.R. No. 170054, January 21, 2013

Peralta, J. FACTS: Petitioner Goya Inc. (Goya) hired contractual employees from PESO Resources Development Corporation (PESO). This prompted Goya, Inc. Employees Union-FFW (Union) to request for a grievance conference on the ground that the contractual workers do not belong to the categories of employees stipulated in their CBA. The Union also argued that hiring contractual employees is contrary to the union security clause embodied in the CBA.

When the matter remained unresolved, the grievance was referred to the NCMB for voluntary arbitration. The Union argued that Goya is guilty of ULP for gross violation of the CBA. The voluntary arbitrator dismissed the Unions charge of ULP but Goya was directed to observe and comply with the CBA. While the Union moved for partial consideration of the VA decision, Goya immediately filed a petition for review before the Court of Appeals to set aside the VAs directive to observe and comply with the CBA commitment pertaining to the hiring of casual employees. Goya argued that hiring contractual employees is a valid management prerogative. The Court of Appeals dismissed the petition. ISSUE: Whether the act of hiring contractual employees is a valid exercise of management prerogative? HELD: The CA did not commit serious error when it sustained the ruling “that the hiring of contractual employees from PESO was not in keeping with the intent and spirit of the CBA. The said ruling is interrelated and intertwined with the sole issue to be resolved that is, "Whether or not the Company is guilty of unfair labor practice in engaging the services of PESO, a third party service provider, under existing CBA, laws, and jurisprudence." Both issues concern the engagement of PESO by the Company which is perceived as a violation of the CBA and which constitutes as unfair labor practice on the part of the Company.”

On the jurisdiction of the Voluntary Arbitrator

In the case of Ludo & Luym Corporation v. Saornido, the court ruled that:

Generally, the arbitrator is expected to decide only those questions expressly delineated by the submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to make a final settlement since arbitration is the final resort for the adjudication of disputes. The succinct reasoning enunciated by the CA in support of its holding, that the Voluntary Arbitrator in a labor controversy has jurisdiction to render the questioned arbitral awards, deserves our concurrence.


MZR INDUSTRIES vs. MAJEN COLAMBOTG.R. No. 179001, August 28, 2013

Peralta, J.

FACTS: On Feb. 8, 2000, petitioner Marilou Quiroz, Owner and Vice-President for Finance and Marketing of MZR, hired respondent Majen Colambot as messenger. Colambot's duties and responsibilities included field, messengerial and other liaison work.

However, beginning 2002, Colambot's work performance started to deteriorate. Petitioners issued several memoranda to Colambot for habitual tardiness, negligence, and violations of office policies. He was also given written warnings for insubordination committed, for negligence caused by careless handling of confidential office documents, for leaving his post without proper turnover and insubordination.

Colambot was thereafter suspended from November 26, 2004 until December 6, 2004 for insubordination. Petitioners claimed they waited for Colambot to report back for work on December 7, 2004, but they never heard from him anymore. Later, petitioners were surprised to find out that Colambot had filed a complaint for illegal suspension, underpayment of salaries, overtime pay, holiday pay, rest day, service incentive leave and 13th month pay. The complaint was later on amended to illegal dismissal.

ISSUE: Whether there was abandonment.

HELD: In a number of cases, this Court consistently held that to constitute abandonment of work, two elements must be present: first, the employee must have failed to report for work or must have been absent without valid or justifiable reason; and second, there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act.

In the instant case, other than Colambot's failure to report back to work after suspension, petitioners failed to present any evidence which tend to show his intent to abandon his work. It is a settled rule that mere absence or failure to report for work is not enough to amount to abandonment of work. There must be a concurrence of the intention to abandon and some overt acts from which an employee may be deduced as having no more intention to work. On this point, the CA was correct when it held that:

Mere absence or failure to report for work, even after notice to return, is not tantamount to abandonment. The burden of proof to show that there was unjustified refusal to go back to work rests on the employer. Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever the employer-employee relationship. Clearly, the operative act is still the employee’s ultimate act of putting an end to his employment. Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. An employee who takes steps to protest his dismissal cannot logically be


said to have abandoned his work. the filing of such complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment.

Suffice it to say that, it is the employer who has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment without any intention of returning. It is therefore incumbent upon petitioners to ascertain the respondents’ interest or non-interest in the continuance of their employment. This, petitioners failed to do so.


ALILEM CREDIT COOPERATIVE, INC. vs. SALVADOR M. BANDIOLA, JR.G.R. No. 173489, February 25, 2013

PERALTA, J.

FACTS: Respondent was employed by petitioner as bookkeeper. Petitioner's Board of Directors received a letter from a certain Napoleon Gao-ay reporting the alleged immoral conduct and unbecoming behavior of respondent by having an illicit relationship with Napoleon’s sister, Thelma G. Palma. A preliminary investigation was therefore conducted. On June 7, 1997, the Board received a petition from about fifty members of the cooperative asking the relief of respondent due to his illicit affair with Thelma. In a Memorandum, respondent was informed of the Board’s decision to terminate his services. Thus, a complaint for Illegal Dismissal was filed.

ISSUE: Whether the dismissal was valid.

HELD: It is undisputed that respondent was dismissed from employment for engaging in extramarital affairs, a ground for termination of employment stated in petitioner’s Personnel Policy. This basis of termination was made known to respondent as early as the first communication made by petitioner. In its June 20, 1997 letter, petitioner directed respondent to explain in writing or personal confrontation why he should not be terminated for violation of Section 4.1.4 of the Personnel Policy. Respondent merely denied the accusation against him and did not question the basis of such termination. When the LA was called upon to decide the illegal dismissal case, it ruled in favor of petitioner and upheld the basis of such dismissal which is the cited Personnel Policy.

To be sure, an employer is free to regulate all aspects of employment. It may make reasonable rules and regulations for the government of its employees which become part of the contract of employment provided they are made known to the employee. In the event of a violation, an employee may be validly terminated from employment on the ground that an employer cannot rationally be expected to retain the employment of a person whose lack of morals, respect and loyalty to his employer, regard for his employer’s rules and application of the dignity and responsibility, has so plainly and completely been bared.

While respondent’s act of engaging in extra--marital affairs may be considered personal to him and does not directly affect the performance of his assigned task as bookkeeper, aside from the fact that the act was specifically provided for by petitioner’s Personnel Policy as one of the grounds for termination of employment, said act raised concerns to petitioner as the Board received numerous complaints and petitions from the cooperative members themselves asking for the removal of respondent because of his immoral conduct.


PICOP RESOURCES INC vs. TANECAG.R. No. 160828, August 9, 2010

PERALTA, J.

FACTS: On February 13, 2001, respondents filed a Complaint for unfair labor practice, illegal dismissal and money claims against petitioner PICOP Resources, Incorporated (PRI). Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file employees of petitioner PRI. PRI has a CBA with NAMAPRI-SPFL. On May 16, 2000, Atty. Fuentes, President of Southern Philippines Federation of Labor (SPFL), sent a letter to the management of PRI demanding the termination of employees who allegedly campaigned for, supported and signed the Petition for Certification Election of the Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL considered said act of campaigning for and signing the petition for certification election of FFW as an act of disloyalty and a valid basis for termination for a cause in accordance with its Constitution and By-Laws, and the terms and conditions of the CBA, specifically Article II, Sections 6.1 and 6.2 on Union Security Clause.

On October 16, 2000, PRI served notices of termination for causes to employees whom NAMAPRIL-SPFL sought to be terminated on the ground of “acts of disloyalty” committed against it when respondents allegedly supported and signed the Petition for Certification Election of FFW before the “freedom period” during the effectivity of the CBA. A Notice dated October 21, 2000 was also served on the DOLE, Caraga Region.

The Labor Arbiter declared the respondents’ dismissal to be illegal. The NLRC, on appeal, reversed the decision of the Labor Arbiter. The CA however reversed the decision of the NLRC and reinstated the decision of the Labor Arbiter. Hence, this petition.

ISSUE: Whether the Union Security Clause may be a ground for termination of employment. HELD: Union security" is a generic term, which is applied to and comprehends "closed shop," union shop," "maintenance of membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement,


remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part.

However, in terminating the employment of an employee by enforcing the union security clause, the employer needs to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA.

As to the first requisite, there is no question that the CBA between PRI and respondents included a union security clause, specifically, a maintenance of membership as stipulated in Sections 6 of Article II, Union Security and Check-Off. Following the same provision, PRI, upon written request from the Union, can indeed terminate the employment of the employee who failed to maintain its good standing as a union member.

Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters dated May 16 and 23, 2000, to terminate the employment of respondents due to their acts of disloyalty to the Union.

However, as to the third requisite, we find that there is no sufficient evidence to support the decision of PRI to terminate the employment of the respondents.


ERECTOR ADVERTSING SIGN GROUP, INC. vs. NLRCG.R. No. 167218, July 2, 2010

Peralta, J.

FACTS: Petitioner Erector Advertising Sign Group, Inc. is a domestic corporation engaged in the business of constructing billboards and advertising signs. Sometime in the middle of 1996, petitioner engaged the services of ExpeditoCloma (Cloma) as company driver and the latter had served as such until his dismissal from service in May 2000. Cloma filed a Complaint with the NLRC for alleged illegal suspension and thereafter dismissal from his employment without due process of law.

The Labor Arbiter dismissed the Complaint for lack of merit but was reversed by the NLRC. The CA affirmed the decision of the NLRC. Hence, this petition.

ISSUE: Whether Cloma was dismissed with just cause and with due process of law.

HELD: We find no merit in the petition.

The validity of an employee’s dismissal from service hinges on the satisfaction of the two substantive requirements for a lawful termination. These are, first, whether the employee was accorded due process the basic components of which are the opportunity to be heard and to defend himself. This is the procedural aspect. And second, whether the dismissal is for any of the causes provided in the Labor Code of the Philippines. This constitutes the substantive aspect.

With respect to due process requirement, the employer is bound to furnish

the employee concerned with two (2) written notices before termination of employment can be legally effected. One is the notice apprising the employee of the particular acts or omissions for which his dismissal is sought and this may loosely be considered as the proper charge. The other is the notice informing the employee of the management’s decision to sever his employment. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge, thereby giving him ample opportunity to be heard and defend himself with the assistance of his representative should he so desire. The requirement of notice, it has been stressed, is not a mere technicality but a requirement of due process to which every employee is entitled.

In this case, we find that Clomas dismissal from service did not comply with this

basic precept.


MA. ANA M. TAMONTE and EDILBERTO A. TAMONTE vs.HONGKONG and SHANGHAI BANKING CORPORATION LTD.

G.R. No. 166970, August 17, 2011Peralta, J.

FACTS: Petitioner Ma. Ana M. Tamonte was a regular employee of the Hongkong and Shanghai Banking Corporation Ltd. and a member of the Hongkong and Shanghai Banking Corporation Staff Retirement Plan (HSBC SRP). Petitioner Ana applied for a housing loan with the HSBC SRP secured by a real estate mortgage contract over their property covered by TCT No. 17169 of the Register of Deeds of Parañaque. The monthly amortizations of the loan were paid by petitioner Ana through automatic payroll deductions. Ana was however included in those who were dismissed from service for abandonment after a labor dispute arose between the bank and the union which culminated in a strike. The Labor Arbiter dismissed the case for illegal dismissal stating that the strike was illegal.

On November 28, 1994 HSBC SRP demanded for the payment of Ana’s unpaid accounts which included her housing loan. Petitioners failed to settle their obligation; thus, the real estate mortgage was foreclosed. A Complaint for Annulment of the Entire Proceedings in Foreclosure was thereafter filed with the RTC which dismissed the same. The CA, on appeal, affirmed the RTC decision. Hence, this petition.

ISSUE: Whether the petitioners had cause of action.

HELD: Petitioners were already in default in the payment of their loan obligations; thus, foreclosure of the mortgage property was resorted to by respondents. Respondents were only enforcing the civil obligation of petitioners under their mortgage contract. There is no labor aspect involved in the enforcement of petitioners' obligation.

In Nestle Philippines, Inc. v. National Labor Relations Commission (NLRC), the Court held that:

Nestl's demand for payment of the private respondents' amortizations on their car loans, or, in the alternative, the return of the cars to the company, is not a labor, but a civil, dispute. It involves debtor-creditor relations, rather than employee-employer relations.

As noted, the options given to the private respondents are civil in nature arising from contractual obligations. There is no labor aspect involved in the enforcement of those obligations.

The NLRC gravely abused its discretion and exceeded its jurisdiction by issuing the writ of injunction to stop the company from enforcing the civil obligation of the private respondents under the car loan agreements and from protecting its interest in the cars which, by the terms of those agreements, belong to it (the company) until their purchase price shall have been fully paid by the employee. The terms of the car loan agreements are not in issue in the labor case. The rights and obligations of the parties under


those contracts may be enforced by a separate civil action in the regular courts, not in the NLRC.

In Hongkong and Shanghai Banking Corporation, Ltd. Staff Retirement Plan (HSBC SRP) v. Spouses Broqueza, which involved the dismissed co-employees of herein petitioner Ana who were also unable to pay the monthly amortizations of their respective loans, and despite HSBC SRP's demand for them to pay their loan, they still failed to pay their loan obligations, We said, among others, that the enforcement of a loan agreement involves debtor-creditor relations founded on contracts and does not in any way concern employee relations.

To reiterate, respondent HSBC SRP and petitioners agreed in their mortgage contract that HSBC SRP as mortgagee was authorized to foreclose the mortgaged property in the event that the petitioners-mortgagors failed to pay the sum of money secured by the mortgage. After petitioners failed to pay upon demand, the civil obligation of the petitioners under the mortgage contract must be enforced to protect HSBC SRP's interest in the housing loan. The dismissal of petitioners' complaint for the annulment of the foreclosure proceedings is, therefore, valid and proper.


Varorient Shipping Co., INC. vs. Gil A. FloresG.R. No. 161934, October 6, 2010

Peralta, J.

FACTS: On April 7, 1997, petitioners employed respondent for the position of Chief Officer on board M/V Aria per Contract of Employment duly approved by the Philippine Overseas Employment Administration (POEA) for a period of 12 months.

On April 16, 1997, he was deployed aboard M/V Aria in Bangkok, Thailand. During his employment, the master of the vessel sent respondent to the Centre Medical de Ngodi at Doula, Cameroon, where he was treated for three days due to the shooting pain in the lower extremities, particularly on his right foot. In the Medical Certificate dated June 19, 1997, the attending physician, Dr. R. Mongou Tchouakẻ, stated that he diagnosed respondent's pain on the right foot as sciatic neuralgia and administered [drips], injection, and acupuncture. Respondent was declared not fit to work. The doctor recommended respondent’s repatriation to the Philippines for continuing treatment. Thus, he was repatriated on June 21, 1997.

Respondent then underwent several medical examinations and treatment. On September 19, 1997, respondent filed a Complaint against petitioner for the reimbursement of his medical expenses. Petitioners however countered that respondent can no longer seek continuation of his medical treatment and claim for sickness wages and reimbursement of medical expenses because upon his repatriation, he had received the amount of US$1,010.00 (or the equivalent then of about P40,400.00) as settlement for his sickness wages and other benefits, as evidenced by the Receipt and Quitclaim dated June 25, 1997, executed by respondent. The Labor Arbiter dismissed the complaint, but was reversed by the NLRC deducting however, the US$1,010.00 from the award of sickness wages. The CA affirmed the decision of the NLRC, hence this petition.

ISSUES: Whether the “quitclaim” was valid.

HELD: The Receipt and Quitclaim executed by respondent lacks the elements of voluntariness and free will and, therefore, does not absolve petitioners from liability in paying him the sickness wages and other monetary claims.

In More Maritime Agencies, Inc. v. NLRC, the Court ruled that the law does not consider as valid any agreement to receive less compensation than what a worker is entitled to recover nor prevent him from demanding benefits to which he is entitled. Quitclaims executed by the employees are thus commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the workers legal rights, considering the economic disadvantage of the employee and the inevitable pressure upon him by financial necessity. Thus, it is never enough to assert that the parties have voluntarily entered into such a quitclaim. There are other requisites, to wit: (a) that there was no fraud or deceit on the part of any of the parties; (b) that the consideration of the quitclaim is credible and reasonable; and


(c) that the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law.

A perusal of the provisions of the Receipt and Quitclaim shows that respondent

would be releasing and discharging petitioners from all claims, demands, causes of action, and the like in an all-encompassing manner, including the fact that he had not contracted or suffered any illness or injury in the course of his employment and that he was discharged in good and perfect health. These stipulations clearly placed respondent in a disadvantageous position vis--vis the petitioners.


BRIGHT MARITIME CORPORATION vs. FANTONIALGR No. 165935, February 08, 2012

Peralta, J.

FACTS: A Contract of Employment was executed by petitioner Bright Maritime Corporation (BMC), a manning agent and respondent Ricardo B. Fantonial, which contract was verified and approved by the Philippine Overseas Employment Administration (POEA) on January 17, 2000. The employment contract provided that respondent shall be employed as boatswain of the foreign vessel M/V AUK for one year, with a basic monthly salary of US$450, plus an allowance of US$220.

Respondent was made to undergo a medical examination at the Christian Medical Clinic, which was petitioner’s accredited medical clinic. Respondent was issued a Medical Certificate dated January 17, 2000, which certificate had the phrase FIT TO WORK stamped on its lower and upper portion.

On the day of his departure however, respondent was told by the liaison officer of the petitioner that he could not leave due to some defects in his medical certificate. He went back to the clinic and learned that there was nothing wrong with his medical certificate, thus he proceeded to petitioner’s office for explanation, but he was merely told to wait for their call, as he was being lined-up for a flight to the ship's next port of call. However, respondent never got a call from petitioners.

On May 16, 2000, respondent filed a complaint against petitioners for illegal dismissal, payment of salaries for the unexpired portion of the employment contract and for the award of moral, exemplary, and actual damages as well as attorney’s fees before the Regional Arbitration Branch No. 7 of the NLRC in Cebu City.

ISSUE: Whether the employment contract was perfected.

HELD: An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause of the obligation. The object of the contract was the rendition of service by respondent on board the vessel for which service he would be paid the salary agreed upon.

Hence, in this case, the employment contract was perfected on January 15, 2000 when it was signed by the parties, respondent and petitioners, who entered into the contract in behalf of their principal, Ranger Marine S.A., thereby signifying their consent to the terms and conditions of employment embodied in the contract, and the contract was approved by the POEA on January 17, 2000. However, the employment contract did not commence, since petitioners did not allow respondent to leave on January 17, 2000 to embark the vessel M/V AUK in Germany on the ground that he was not yet declared fit to work on the day of departure, although his Medical Certificate dated January 17, 2000 proved that respondent was fit to work.


In Santiago v. CF Sharp Crew Management, Inc., the Court held that the

employment contract did not commence when the petitioner therein, a hired seaman, was not able to depart from the airport or seaport in the point of hire; thus, no employer-employee relationship was created between the parties.

Nevertheless, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. If the reverse happened, that is, the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages.


LIRIO vs. GENOVIAG.R. No. 168757, November 23, 2011

Peralta, J.

FACTS: On July 9, 2002, respondent Wilmer D. Genovia filed a complaint against petitioner Cesar Lirio and/or Celkor Ad Sonicmix Recording Studio for illegal dismissal, non-payment of commission and award of moral and exemplary damages.

In his Position Paper, respondent Genovia alleged, among others, that on August 15, 2001, he was hired as studio manager by petitioner Lirio, owner of Celkor Ad Sonicmix Recording Studio (Celkor). He was employed to manage and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other prospective clients.

Respondent stated that a few days after he started working as a studio manager, petitioner approached him and told him about his project to produce an album for his 15-year-old daughter, Celine Mei Lirio, a former talent of ABS-CBN Star Records. Petitioner asked respondent to compose and arrange songs for Celine and promised that he (Lirio) would draft a contract to assure respondent of his compensation for such services.

For several occasions, respondent reminded petitioner about the contract on his compensation as composer and arranger of the album. Petitioner however informed respondent that he was entitled only to 20% of the net profit, and not of the gross sales of the album, and that the salaries he received and would continue to receive as studio manager of Celkor would be deducted from the said 20% net profit share. Respondent objected and insisted that he be properly compensated. On March 14, 2002, petitioner verbally terminated respondent’s services, and he was instructed not to report for work. Petitioner asserted that he was illegally dismissed and that having worked for more than 6 months, he was already a regular employee.

ISSUE: Whether there is an employer-employee relationship between petitioner and respondent.

HELD: The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employees conduct. The most important element is the employer's control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.

It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted.

In this case, the documentary evidence presented by respondent to prove that he was an employee of petitioner are as follows: (a) a document denominated as "payroll"


(dated July 31, 2001 to March 15, 2002) certified correct by petitioner, which showed that respondent received a monthly salary of P7,000.00 (P3,500.00 every 15th of the month and another P3,500.00 every 30th of the month) with the corresponding deductions due to absences incurred by respondent; and (2) copies of petty cash vouchers, showing the amounts he received and signed for in the payrolls.

The said documents showed that petitioner hired respondent as an employee and he was paid monthly wages of P7,000.00. Petitioner wielded the power to dismiss as respondent stated that he was verbally dismissed by petitioner, and respondent, thereafter, filed an action for illegal dismissal against 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 of duties of the employee, as it is sufficient that the former has a right to wield the power. Nevertheless, petitioner stated in his Position Paper that it was agreed that he would help and teach respondent how to use the studio equipment. In such case, petitioner certainly had the power to check on the progress and work of respondent.

Based on the foregoing, the Court agrees with the Court of Appeals that the evidence presented by the parties showed that an employer-employee relationship existed between petitioner and respondent.


NISSAN MOTORS PHILIPPINES vs. VICTORINO ANGELOGR No. 164181, September 14, 2011

Peralta, J.

FACTS: Respondent Victorino Angelo was employed by Nissan on March 11, 1989 as one of its payroll staff. On April 7 to 17, 2000, respondent was on sick leave, thus, he was not able to prepare the payroll for the said period. Again, on April 27 and 28, 2000, respondent was on an approved vacation leave which again resulted in the non-preparation of the payroll for that particular period.

On May 8, 2000, respondent received a Memorandum from Petitioner informing him that the Company is considering his dismissal from employment on the grounds of serious misconduct, willful disobedience and gross neglect of duties and that a preventive suspension is imposed against him. After the investigation, petitioner issued a notice of termination. Thus, a complaint for illegal dismissal was filed.

ISSUE: Whether the termination of the respondent is one of the authorized just causes of NLRC.

HELD: The Labor Code provides that an employer may terminate the services of an employee for a just cause. Petitioner, the employer in the present case, dismissed respondent based on allegations of serious miscounduct, willful disobedience and gross neglect.

One of the just causes enumerated in the Labor Code is serious misconduct. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. Such misconduct, however serious, must nevertheless be in connection with the employee's work to constitute just cause for his separation. Thus, for misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the performance of the employees duties; and (c) it must show that the employee has become unfit to continue working for the employer. Going through the records, this Court found evidence to support the allegation of serious misconduct or insubordination.

Another just cause cited by the petitioner is wilful disobedience. One of the fundamental duties of an employee is to obey all reasonable rules, orders and instructions of the employer. Disobedience, to be a just cause for termination, must be wilful or intentional, wilfulness being characterized by a wrongful and perverse mental attitude rendering the employees act inconsistent with proper subordination. A wilful or intentional disobedience of such rule, order or instruction justifies dismissal only where such rule, order or instruction is (1) reasonable and lawful, (2) sufficiently known to the employee, and (3) connected with the duties which the employee has been engaged to discharge.


Petitioner also dismissed respondent because of gross or habitual negligence. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. In finding that petitioner was able to adduce evidence that would justify its dismissal of respondent, the NLRC correctly ruled that the latter's failure to turn over his functions to someone capable of performing the vital tasks which he could not effectively perform or undertake because of his heart ailment or condition constitutes gross neglect.

Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. On the other hand, fraud and willful neglect of duties imply bad faith on the part of the employee in failing to perform his job to the detriment of the employer and the latter's business.

It must be emphasized at this point that the onus probandi to prove the

lawfulness of the dismissal rests with the employer. In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid cause. Failure to do so would necessarily mean that the dismissal was not justified and, therefore, was illegal. In this case, both the Labor Arbiter and the NLRC were not amiss in finding that the dismissal of respondent was legal or for a just cause based on substantial evidence presented by petitioner. Substantial evidence, which is the quantum of proof required in labor cases, is that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.


ST. PAUL COLLEGE QUEZON CITY vs. REMIGIO MICHAEL ANCHETA II and CYNTHIA ANCHETA

G.R. No. 169905, September 7, 2011Peralta, J.

FACTS: Respondents Remigio Michael Ancheta II and Cynthia Ancheta were hired in the School Year (SY) 1996-1997 by the St. Paul College Quezon City as a General Education teacher with probationary rank and as a part time Mass Communication teacher, respectively. Their appointments were renewed for SY 1997-1998. On February 13, 1998, the spouses wrote a letter to SPCQC President, Sr. Lilia Tolentino signifying their intention to renew their contract for SY 1998-1999. College Dean Sr. Bernadette responded through two letters dated March 9, 1998 informing the spouses that the school is extending to them new contracts for SY 1998-1999. On April 30, 1998, however, Sr. Bernadette wrote a letter to Sr. Lilia, endorsing the immediate termination of the teaching services of the spouses on the following grounds:

1. Non-compliance with the departmental policy to submit their final test questions to their respective program coordinators for checking/comments (violating par. 7.1, p. 65 of the Faculty Manual). This policy was formulated to ensure the validity and reliability of test questions of teachers for the good of the students. This in effect can minimize if not prevent unnecessary failure of students. 2. Non-compliance with the standard format (multiple choice) of final test questions as agreed upon in the department. Mr. Ancheta prepared purely essay questions for the students.Well-prepared multiple choice questions are more objective, and develop critical thinking among students. 3. Failure to encode their modular grade reports as required (violating par. H. 8, p. 66 of our Faculty manual). 4. Failure to submit and update required modules (syllabi) of their subject despite reminders (violating D, 1.5, p. 40 of our Faculty Manual). 5. Both spouses have a gross number of failure in their class.

The spouses were given an opportunity to comment. Subsequently, they received their respective letters of termination on May 14, 1998. Their letter for reconsideration was denied. Their complaint for illegal dismissal was dismissed by the Labor Arbiter on November 20, 2000 and was affirmed by the NLRC on February 28, 2003. The CA however, in a petition for certiorari, reversed the decision of the Labor Arbiter and the NLRC. Hence, this petition.

ISSUE: Whether there was illegal dismissal.

HELD: Employment on probationary status of teaching personnel is not governed purely by the Labor Code. The Labor Code is supplemented with respect to


the period of probation by special rules found in the Manual of Regulations for Private Schools. On the matter of probationary period, Section 92 of these regulations provides:

Section 92. Probationary Period. - Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis.

For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract.

Section 91 of the Manual of Regulations for Private Schools, states that:

Section 91. Employment Contract. Every contract of employment shall specify the designation, qualification, salary rate, the period and nature of service and its date of effectivity, and such other terms and condition of employment as may be consistent with laws and rules, regulations and standards of the school. A copy of the contract shall be furnished the personnel concerned

It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period. Therefore, the letters sent by petitioner Sr. Racadio, which were void of any specifics cannot be considered as contracts. The closest they can resemble to are that of informal correspondence among the said individuals. As such, petitioner school has the right not to renew the contracts of the respondents, the old ones having been expired at the end of their terms.


SAN MIGUEL FOODS, INC. vs. SAN MIGUEL CORP. SUPERVISORS AND EXEMPT UNION

G.R. No. 146206, August 1, 2011Peralta, J.

FACTS: The Court, in G.R. No. 110399 entitled San Miguel Corporation Supervisors and Exempt Union v. Laguesma, held that supervisory employees 3 and 4 and the exempt employees of San Miguel Foods, Inc. are not to be considered confidential employees because the confidential data they handle do not pertain to labor relations, particularly, negotiation and settlement of grievances, thus they were allowed to form an appropriate bargaining unit for the purpose of collective bargaining. The Court also declared that the employees belonging to the three different plants of San Miguel Corporation Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis, having community or mutuality of interests, constitute a single bargaining unit. They perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities.

Pursuant to such ruling, the DOLE-NCR conducted pre-election conferences. On September 30, 1998, a certification election was conducted. On the same date, petitioner filed the Omnibus Objections and Challenge to Voters, questioning the eligibility to vote by some of its employees on the grounds that some employees do not belong to the bargaining unit which respondent seeks to represent or that there is no existence of employer-employee relationship with petitioner.

The Med-Arbiter issued an order, based on the results of the certification election, stating that respondent is certified to be the exclusive bargaining agent of the supervisors and exempt employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis. The DOLE Undersecretary affirmed the said Order with modification excluding four employees from the bargaining unit. The CA affirmed the decision of the DOLE Undersecretary with modification excluding those holding the positions of Human Resource Assistant and Personnel Assistant from the bargaining unit. Hence, this petition.

ISSUE: 1. Whether the CA departed from jurisprudence when it expanded the scope of the bargaining unit defined by the ruling in G.R. No. 110399.

2. Whether the CA departed from jurisprudence on the Court’s definition of a confidential employee.

3. Whether the Employer has personality to question a certification election.

HELD: 1. In G.R. No. 110399, the Court explained that the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single bargaining unit, which is not contrary to the one-company, one-union policy. An appropriate bargaining unit is defined as a group of employees of a given employer, comprised of all or less than all of the entire body of


employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.

There should be only one bargaining unit for the employees in Cabuyao, San Fernando, and Otis of Magnolia Poultry Products Plant involved in dressed chicken processing and Magnolia Poultry Farms engaged in live chicken operations. Certain factors, such as specific line of work, working conditions, location of work, mode of compensation, and other relevant conditions do not affect or impede their commonality of interest. Although they seem separate and distinct from each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit.

2. Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee - that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the confidential employee rule.

The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. Since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.

3. It bears stressing that a certification election is the sole concern of the workers; hence, an employer lacks the personality to dispute the same. The general rule is that an employer has no standing to question the process of certification election, since this is the sole concern of the workers. Law and policy demand that employers take a strict, hands-off stance in certification elections. The bargaining representative of employees should be chosen free from any extraneous influence of management. A labor bargaining representative, to be effective, must owe its loyalty to the employees alone and to no other. The only exception is where the employer itself has to file the petition pursuant to Article 258 of the Labor Code because of a request to bargain collectively.


INSULAR HOTEL EMPLOYEES UNION-NFL vs. WATERFRONT INSULAR HOTEL DAVAOG.R. Nos. 174040-41, September 22, 2010

Peralta, J.

FACTS: On November 6, 2000, respondent Waterfront Insular Hotel Davao sent the DOLE, Region XI, Davao City, a Notice of Suspension of Operations notifying the same that it will suspend its operations for a period of six months due to severe and serious business losses. In said notice, respondent assured the DOLE that if the company could not resume its operations within the six-month period, the company would pay the affected employees all the benefits legally due to them.

During the period of the suspension, Domy R. Rojas, the President of Davao Insular Hotel Free Employees Union (DIHFEU-NFL), the recognized labor organization in Waterfront Davao, sent respondent a number of letters asking management to reconsider its decision. After series of negotiations, respondent and DIHFEU-NFL signed a Memorandum of Agreement wherein respondent agreed to re-open the hotel subject to certain concessions offered by DIHFEU-NFL in its Manifesto. Accordingly, respondent downsized its manpower structure to 100 rank-and-file employees as set forth in the terms of the MOA. Moreover, as agreed upon in the MOA, a new pay scale was also prepared by respondent. On June 15, 2001, respondent resumed its business operations.

On August 22, 2002, Darius Joves and Debbie Planas, claiming to be local officers of the National Federation of Labor (NFL), filed a Notice of Mediation before the National Conciliation and Mediation Board (NCMB), Region XI, Davao City. In said Notice, it was stated that the Union involved was DARIUS JOVES/DEBBIE PLANAS ET. AL, National Federation of Labor. The issue raised in said Notice was the Diminution of wages and other benefits through unlawful Memorandum of Agreement.

The Respondent maintained that the NCMB had no the jurisdiction over the Notice of Mediation and manifested its intention to withdraw from the proceedings. The Voluntary Arbitrator, however, ruled in favor of petitioner. The CA ruled in favor of respondent. Hence, this petition.

ISSUE: Whether the NCMB has jurisdiction over the Notice of Mediation.

HELD: While it is undisputed that a submission agreement was signed by respondent and IHEU-NFL, then represented by Joves and Cullo, this Court finds that there are two circumstances which affect its validity: first, the Notice of Mediation was filed by a party who had no authority to do so; second, that respondent had persistently voiced out its objection questioning the authority of Joves, Cullo and the individual members of the Union to file the complaint before the NCMB.


Procedurally, the first step to submit a case for mediation is to file a notice of preventive mediation with the NCMB. It is only after this step that a submission agreement may be entered into by the parties concerned.

Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive mediation, to wit:

Who may file a notice or declare a strike or lockout or request preventive mediation. -Any certified or duly recognized bargaining representative may file a notice or declare a strike or request for preventive mediation in cases of bargaining deadlocks and unfair labor practices. The employer may file a notice or declare a lockout or request for preventive mediation in the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may file a notice, request preventive mediation or declare a strike, but only on grounds of unfair labor practice.

From the foregoing, it is clear that only a certified or duly recognized bargaining agent may file a notice or request for preventive mediation. It is curious that even Cullo himself admitted, in a number of pleadings, that the case was filed not by the Union but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the notice filed before it.


PHARMACIA and UPJOHN, INC. vs. RICARDO P. ALBAYDA, JR.G.R. No. 172724, August 23, 2010

Peralta, J.

FACTS: Respondent Ricardo Albayda, Jr. was an employee of Upjohn, Inc. in 1978 and continued working there until 1996 when a merger between Pharmacia and Upjohn was created. After the merger, respondent was designated by petitioner Pharmacia and Upjohn as District Sales Manager assigned to District XI in the Western Visayas area. During the period of his assignment, respondent settled in Bacolod City. In December 1999, respondent received a memorandum reassigning him as District Sales Manager to District XII in the Northern Mindanao area. In several letters, respondent requested that he be reassigned in Western Visayas area but such was denied. Later on, he was given an option to be assigned in Metro Manila, however respondent reiterated the concerns he previously raised in his previous letters.

Due to the failure of respondent to report for work, a memorandum, dated June 15, 2000, was sent to him directing him to report for work within 5 working days from receipt thereof. Another Memorandum was sent on June 26, 2000. Respondent was warned that the same would be a final notice for him to report for work in Manila within 5 working days from receipt of the memo; otherwise, his services will be terminated on the basis of being absent without official leave (AWOL). On July 13, 2000 another memorandum was sent to respondent notifying him of their decision to terminate his services after he repeatedly refused to report for work despite due notice.

The respondent filed a complaint with the NLRC for constructive dismissal. The Labor Arbiter dismissed the case. On appeal, the NLRC affirmed the decision of the Labor Arbiter. Motion for reconsideration was likewise denied. In a petition for Certiorari, the CA ruled in favor of respondent and denied the motion for reconsideration. Hence, this petition.

ISSUE: Whether there was valid dismissal.

HELD: The petition is meritorious.

On petitioners exercise of management prerogative

Jurisprudence recognizes the exercise of management prerogative to transfer or assign employees from one office or area of operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. To determine the validity of the transfer of employees, the employer must show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this


burden of proof, the employee's transfer shall be tantamount to constructive dismissal. Both the LA and the NLRC ruled that the reassignment of respondent was a valid exercise of petitioner’s management prerogative. The rule in our jurisdiction is that findings of fact of the NLRC, affirming those of the LA, are entitled to great weight and will not be disturbed if they are supported by substantial evidence. Substantial evidence is an amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Based on the foregoing, this Court rules that the CA had overstepped its legal mandate by reversing the findings of fact of the LA and the NLRC as it appears that both decisions were based on substantial evidence. There is no proof of arbitrariness or abuse of discretion in the process by which each body arrived at its own conclusions. Thus, the CA should have deferred to such specialized agencies which are considered experts in matters within their jurisdictions.

On the existence of grounds to dismiss respondent from the service

This Court has long stated that the objection to the transfer being grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer. Such being the case, respondent cannot adamantly refuse to abide by the order of transfer without exposing himself to the risk of being dismissed. Hence, his dismissal was for just cause in accordance with Article 282(a) of the Labor Code.

Lastly, while it is understandable that respondent does not want to relocate his family, this Court agrees with the NLRC when it observed that such inconvenience is considered an employment or professional hazard which forms part of the concessions an employee is deemed to have offered or sacrificed in the view of his acceptance of a position in sales.

On the observance of due process

In termination proceedings of employees, procedural due process consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employers decision to dismiss him. The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. While no actual hearing was conducted before petitioners dismissed respondent, the same is not fatal as only an ample opportunity to be heard is what is required in order to satisfy the requirements of due process. The reassignment of respondent to another territory was a valid exercise of petitioners management prerogative and, consequently, his dismissal was for cause and in accordance with the due process requirement of law.

On the payment of separation pay


An employee who is dismissed for cause is generally not entitled to any financial assistance. Equity considerations, however, provide an exception. Equity has been defined as justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law. It is grounded on the precepts of conscience and not on any sanction of positive law, for equity finds no room for application where there is law.

In the instant case, this Court rules that an award to respondent of separation pay by way of financial assistance, equivalent to one-half (1/2) months pay for every year of service, is equitable. Although respondent's actions constituted a valid ground to terminate his services, the same is to this Court's mind not so reprehensible as to warrant complete disregard of his long years of service. It also appears that the same is respondent's first offense. While it may be expected that petitioners will argue that respondent has only been in their service for four years since the merger of Pharmacia and Upjohn took place in 1996, equity considerations dictate that respondent's tenure be computed from 1978, the year when respondent started working for Upjohn.


DUTY FREE PHILIPPINES SERVICES, INC. vs. MANOLITO TRIAG.R. No. 174809, June 27, 2012

Peralta, J.

FACTS: Petitioner Duty Free Philippines Services, Inc. is a manpower agency that provides personnel to Duty Free Philippines(DFP). Manolo Tria was employed by Petitioner and was seconded to DFP as a Warehouse Supervisor. In an Audit Report it was found out that there were glaring discrepancies in the documents of its products which indicate a malicious attempt to conceal an anomalous irregularity. It was found to have been fabricated and all signatories therein, namely, Ed Garcia, Stockkeeper; Catherino A. Bero, DIU Supervisor; and Constantino L. Cruz, were held accountable for the irregular loss of the unaccounted Marlboro KS Pack of 5.

Garcia disclosed that it was respondent Manolito Tria who ordered him to look for a van for the supposed direct condemnation of the subject merchandise. Respondent denied his participation in the illegal transaction. DFP Discipline Committee issued a Joint Resolution holding respondent GUILTY OF DISHONESTY for (his) direct participation in the fake condemnation and pilferage of the missing 1,020 Marlboro Pack of 5s cigarettes and orders (his) DISMISSAL from the service. Petitioner sent respondent a memorandum terminating his employment with Petitioner. Respondent filed a Complaint against Petitioner for Illegal Dismissal and for payment of backwages, attorneys fees and damages. Labor Arbiter rendered a Decision finding respondent to have been illegally dismissed from employment. NLRC affirmed the LA decision. When petitioner elevated the case to the CA, it denied for the first time the existence of employer-employee relationship and pointed to DFP as respondent’s real employer. The appellate court, however, considered said defense barred by estoppel for its failure to raise the defense before the LA and the NLRC. Petitioner elevates the case before the Court in this petition for review on certiorari. ISSUE: Whether the absence of employer - employee relationship cannot be raised for the first time on appeal and is barred by estoppel.

HELD: Yes. It is a matter of law that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal. The case will be reviewed and decided on that theory and not approached and resolved from a different point of view.

The review of labor cases is confined to questions of jurisdiction or grave abuse of discretion. The alleged absence of employer-employee relationship cannot be raised for the first time on appeal. The resolution of this issue requires the admission and calibration of evidence and the LA and the NLRC did not pass upon it in their decisions. We cannot permit petitioner to change its theory on appeal. It would be unfair to the adverse party who would have no more opportunity to present further evidence, material to the new theory, which it could have done had it been aware earlier of the new theory before the LA and the NLRC. More so in this case as the supposed employer of respondent which is DFP was not and is not a party to the present case.


In this case, petitioner insisted that respondent was dismissed from employment for cause and after the observance of the proper procedure for termination. Consequently, petitioner cannot now deny that respondent is its employee. While indeed, jurisdiction cannot be conferred by acts or omission of the parties, petitioners belated denial that it is the employer of respondent is obviously an afterthought, a devise to defeat the law and evade its obligations. We agree with the appellate court that DFPDCs conclusions are not supported by clear and convincing evidence to warrant the dismissal of respondent. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution.

The petition is DENIED for lack of merit. The Court of Appeals Decision is AFFIRMED.


ESTATE OF NELSON R. DULAY vs.ABOITIZ JEBSEN MARITIME, INC. and GENERAL CHARTERERS, INC.

G.R. No. 172642, June 13, 2012Peralta, J.

FACTS: Nelson R. Dulay was employed by respondent General Charterers Inc. (GCI), a subsidiary of Aboitiz Jebsen Maritime Inc. since 1986. On August 13, 2000, or 25 days after the completion of his employment contract, Nelson died due to acute renal failure secondary to septicemia. At the time of his death, Nelson was a bona fide member of the Associated Marine Officers and Seaman’s Union of the Philippines (AMOSUP), GCI’s collective bargaining agent. Nelson’s widow, Merridy Jane, thereafter claimed for death benefits through the grievance procedure of the Collective Bargaining Agreement (CBA) between AMOSUP and GCI. However, on January 29, 2001, the grievance procedure was "declared deadlocked" as petitioners refused to grant the benefits sought by the widow.

Merridy Jane filed a complaint with the NLRC Sub-Regional Arbitration Board against GCI for death and medical benefits and damages. Joven Mar, Nelson’s brother, received P20,000.00 from respondents pursuant to the CBA and signed a "Certification" acknowledging receipt of the amount and releasing AMOSUP from further liability. Merridy Jane contended that she is entitled to the aggregate sum $90,000. Merridy Jane averred that the P20,000.00 already received by Joven Mar should be considered advance payment of the total claim of US$90,000. Respondents, on the other hand, asserted that the NLRC had no jurisdiction over the action on account of the absence of employer-employee relationship between GCI and Nelson at the time of the latter’s death.

The Labor Arbiter ruled in favor of private respondent. It ordered the petitioner to pay P4,621,300.00, the equivalent of US$90,000.00 less P20,000.00. NLRC affirmed. Appeal to the CA. The CA ruled that while the suit filed by Merridy Jane is a money claim, the same basically involves the interpretation and application of the provisions in the subject CBA. As such, jurisdiction belongs to the voluntary arbitrator and not the labor arbiter. Petitioner contends that Section 10 of R.A. 8042 vests jurisdiction on the appropriate branches of the NLRC to entertain disputes regarding the interpretation of a collective bargaining agreement involving migrant or overseas Filipino workers. Petitioner argues that the abovementioned Section amended Article 217 (c) of the Labor Code which, in turn, confers jurisdiction upon voluntary arbitrators over interpretation or implementation of collective bargaining agreements and interpretation or enforcement of company personnel policies. Hence, the instant petition.

ISSUE: Whether the CA committed error in ruling that the Labor Arbiter has no jurisdiction over the case.

HELD: The petition is without merit. It is true that R.A. 8042 is a special law governing overseas Filipino workers. However, a careful reading of this special law would readily show that there is no specific provision thereunder which provides for jurisdiction over


disputes or unresolved grievances regarding the interpretation or implementation of a CBA. Section 10 of R.A. 8042, which is cited by petitioner, simply speaks, in general, of "claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages."

On the other hand, Articles 217(c) and 261 of the Labor Code are very specific in stating that voluntary arbitrators have jurisdiction over cases arising from the interpretation or implementation of collective bargaining agreements. Stated differently, the instant case involves a situation where the special statute (R.A. 8042) refers to a subject in general, which the general statute (Labor Code) treats in particular. In the present case, the basic issue raised by Merridy Jane in her complaint filed with the NLRC is: which provision of the subject CBA applies insofar as death benefits due to the heirs of Nelson are concerned. The Court agrees with the CA in holding that this issue clearly involves the interpretation or implementation of the said CBA. Thus, the specific or special provisions of the Labor Code govern.

In any case, the Court agrees with petitioner's contention that the CBA is the law or contract between the parties. Article 13.1 of the CBA entered into by and between respondent GCI and AMOSUP, the union to which petitioner belongs, provides as follows:

The Company and the Union agree that in case of dispute or conflict in the interpretation or application of any of the provisions of this Agreement, or enforcement of Company policies, the same shall be settled through negotiation, conciliation or voluntary arbitration. It is only in the absence of a collective bargaining agreement that parties may opt to submit the dispute to either the NLRC or to voluntary arbitration.


HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA vs.HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA

EMPLOYEES ASSOCIATION-AFW and EDNA R. DE CASTROG.R. No. 176287, January 31, 2011

Peralta, J.

FACTS: Respondent De Castro started working as a staff nurse at petitioner hospital since September 28, 1990, until she was dismissed on July 20, 1999. While respondent De Castro and ward-clerk orientee Gina Guillergan were at the nurse station on night, one Rufina Causaren, an 81-year-old patient of petitioner hospital for "gangrenous wound on her right anterior leg and right forefoot" scheduled for operation fell from the right side of the bed as she was trying to reach for the bedpan. Instead of personally seeing the patient, respondent De Castro directed ward-clerk orientee Guillergan to check the patient. The vital signs of the patient were normal. Later, the physician on duty and the nursing staff on duty for the next shift again attended to patient Causaren.

Chief Nurse Josefina M. Villanueva informed Dr. Asuncion Abaya-Morido, president and hospital director, about the incident and requested for a formal investigation. The legal counsel of petitioner hospital directed respondent De Castro and three other nurses on duty, Staff Nurse Janith V. Paderes and Nursing Assistants Marilou Respicio and Bertilla T. Tatad, to appear before the Investigation Committee. The committee recommended that despite her more than seven years of service, respondent De Castro should be terminated from employment for her lapse in responding to the incident and for trying to manipulate and influence her staff to cover-up the incident.

HRD Officer of petitioner hospital, issued a notice of termination for alleged violation of company rules and regulations, particularly:(1) negligence to follow company policy on what to do with patient Rufina Causaren who fell from a hospital bed; (2) failure to record and refer the incident to the physician-[on- duty and allowing a significant lapse of time before reporting the incident; (3) deliberately instructing the staff to follow her version of the incident in order to cover up the lapse; and (4) negligence and carelessness in carrying out her duty as staff nurse-on-duty when the incident happened. Respondent De Castro, with the assistance of respondent Hospital Management Services Inc.-Medical Center Manila Employees Association-AFW, filed a Complaint7 for illegal dismissal against petitioners with prayer for reinstatement and payment of full backwages without loss of seniority rights, P20,000.00 moral damages, P10,000.00 exemplary damages, and 10% of the total monetary award as attorney's fees.

Labor Arbiter rendered a Decision, ordering petitioner hospital to reinstate respondent De Castro to her former position or by payroll reinstatement, at the option of the former, without loss of seniority rights, but without backwages. NLRC reversed the findings of the Labor Arbiter. It observed that respondent De Castro lacked diligence and prudence in carrying out her duty when, instead of personally checking on the condition of patient Causaren after she fell from the bed, she merely sent ward-clerk

http://lawphil.net/judjuris/juri2011/jan2011/gr_176287_2011.html#fnt7


orientee Guillergan to do the same in her behalf and for influencing her staff to conceal the incident. CA reversed and set aside the Decision of the NLRC and reinstated the Decision of the Labor Arbiter. CA ruled that while respondent De Castro's failure to personally attend to patient Causeran amounted to misconduct, however, being her first offense, such misconduct could not be categorized as serious or grave that would warrant the extreme penalty of termination. Hence, this present petition.

ISSUE: Whether the deliberate refusal to attend to patient Causaren after the latter fell from the bed justifies respondent De Castro's termination from employment due to serious misconduct.

HELD: No. Article 282 (b) of the Labor Code provides that an employer may terminate an employment for gross and habitual neglect by the employee of his duties.

Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Despite our finding of culpability against respondent De Castro; however, we do not see any wrongful intent, deliberate refusal, or bad faith on her part when, instead of personally attending to patient Causaren, she requested Nursing Assistant Tatad and ward-clerk orientee Guillergan to see the patient, as she was then attending to a newly-admitted patient at Room 710. It was her judgment call, albeit an error of judgment, being the staff nurse with presumably more work experience and better learning curve, to send Nursing Assistant Tatad and ward-clerk orientee Guillergan to check on the health condition of the patient, as she deemed it best, under the given situation, to attend to a newly-admitted patient who had more concerns that needed to be addressed accordingly. Being her first offense, respondent De Castro cannot be said to be grossly negligent so as to justify her termination of employment.

The Court emphasizes that the nature of the business of a hospital requires a higher degree of caution and exacting standard of diligence in patient management and health care as what is involved are lives of patients who seek urgent medical assistance. However, in some cases, the Court had ruled that sanctioning an erring employee with suspension would suffice as the extreme penalty of dismissal would be too harsh. Considering that this was the first offense of respondent De Castro in her nine (9) years of employment with petitioner hospital as a staff nurse without any previous derogatory record and, further, as her lapse was not characterized by any wrongful motive or deceitful conduct, the Court deems it appropriate that, instead of the harsh penalty of dismissal, she would be suspended for a period of six (6) months without pay, inclusive of the suspension for a period of 14 days which she had earlier served. Thereafter, petitioner hospital should reinstate respondent Edna R. De Castro to her former position without loss of seniority rights, full backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the expiration of her suspension of six (6) months up to the time of actual reinstatement.


SARGASSO CONSTRUCTION and DEVELOPMENT CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION (4th Division) and GORGONIO

MONGCALG.R. No. 164118, February 9, 2010

Peralta, J.

FACTS: Respondent Mongcal alleged that on May 7, 1993, he was employed as a payloader operator by the respondent company. That on June 29, 1995, a dump truck driver of the respondent company for truck No. 25, requested respondent to load his dump truck with construction materials at the crusher site. He willingly obliged to do his job; that it was later on discovered that said Aldrin Rasote had diverted the delivery of said materials loaded to another person; that as a result of this incident, complainant was dismissed from his job effective 30 June 1995. Respondent denies having a hand nor was he involved in the act committed by truck driver Aldrin Rasote.

Mongcal alleged that his dismissal from work was effected without any valid ground and violative of the rules on due process; that he was not informed of the reasons for his termination from the service nor was he given an opportunity to explain his side, and hence, he was deprived of his means of livelihood without due process of law. Hence, he prays for reinstatement, backwages, and separation pay if reinstatement is no longer feasible.

The Labor Arbiter ruled in favor of petitioner by dismissing the complaint but ordered petitioner to pay herein private respondent P1,000.00 for failure to observe due process requirements of law. On appeal, the NLRC overturned the Labor Arbiter's ruling ordering Sargasso Construction and Development Corporation to pay Gorgonio Mongcal separation pay and backwages. CA affirmed NLRC with modification: the separation pay should be computed from the date of private respondent's employment until the finality of this decision while his backwages should be computed from the time of his alleged dismissal up to the finality of this decision, and in both cases, using his monthly salary of P3,380.00 as basis of computation

ISSUE: Whether the Honorable Court Of Appeals committed grave error in sustaining the award of separation pay and backwages to private respondent.

HELD: No. Under Article 279 of the Labor Code, an illegally dismissed employee "shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement." In addition to full backwages, the Court has also repeatedly ruled that in cases where reinstatement is no longer feasible due to strained relations, then separation pay may be awarded instead of reinstatement. In Mt. Carmel College v. Resuena, the Court reiterated that the separation pay, as an alternative to reinstatement, should be equivalent to one (1) month salary for every year of service. The Decision and Resolution of the Court of Appeals are affirmed. Petitioner is ordered


to pay respondent Gorgonio Mongcal (a) separation pay in the amount equivalent to one (1) month pay for every year of service; and (b) backwages, computed from the time compensation of respondent Mongcal was withheld from him when he was unjustly terminated, up to the time of payment thereof. For this purpose, the records of this case are hereby REMANDED to the Labor Arbiter for proper computation of said awards. Costs against petitioner.

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