labor law, philippines

7/28/2019 Labor Law, Philippines

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Faculty of Civil Law Digest Pool 2010

ARELLANO UNIVERSITY EMPLOYEES AND WORKERS UNION,et al. v. COURT OF APPEALS,et al.

502 SCRA 219 (2006), THIRD DIVISION (Carpio Morales, J .)

An ordinary striking worker may not be declared to have lost his employment status by mere participation illegal strike.

The Arellano University Employees and Workers Union (the Union), the exclusive bargaining representative of about 380 rank-and-file employees of Arellano University, Inc. (the University), filed

with the National Conciliation and Mediation Board (NCMB) a Notice of Strike charging the University with Unfair Labor Practice (ULP). After several controversies and petitions, a strike was staged.

Upon the lifting of the strike, the University filed a Petition to Declare the Strike Illegal beforethe National Labor Relations Commission (NLRC). The NLRC issued a Resolution holding that theUniversity was not guilty of ULP. Consequently, the strike was declared illegal. All the employees whoparticipated in the illegal strike were thereafter declared to have lost their employment status.

ISSUE:

Whether or not an employee is deemed to have lost his employment by mere participation in anillegal strike

HELD :

Under Article 264 of the Labor Code, an ordinary striking worker may not be declared to havelost his employment status by mere participation in an illegal strike. There must be proof that heknowingly participated in the commission of illegal acts during the strike. While the University adducedphotographs showing strikers picketing outside the university premises, it failed to identify who they

were. It thus failed to meet the substantiality of evidence testapplicable in dismissal cases.

With respect to the union officers, as already discussed, their mere participation in the illegalstrike warrants their dismissal.


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ASIA PACIFIC CHARTERING (PHILS.) INC.v. MARIA LINDA R. FAROLAN393 SCRA 454 (2002), THIRD DIVISION (Carpio Morales, J .)

The termination of a managerial employee on the ground of loss of confidence should have a basis andthe determination of the same cannot be left entirely to the employer.

Petitioner Asia Pacific Chartering (Phils.) Inc. (Asia) is tasked with the selling of passenger andcargo spaces for Scandinavian Airlines System. Petitioner Asia, through its Vice President CatalinoBondoc (Bondoc), offered Respondent Maria Linda R. Farolan (Farolan) the sales manager position to

which Farolan accepted.

Upon Vice President Bondocs request, Farolan submitted a detailed report attributing the dropof sales revenue to market forces beyond her control. Consequently, Asia directed Roberto Zozobrado(Zozobrado) to implement solutions. Zozobrado informally took over Farolans marketing and salesresponsibilities but she continued to receive her salary. Asia claims that the increase in sales revenue wasdue to Zozobrados management.

Asia then sent a letter of termination to Farolan on the ground of loss of confidence, forcing Farolan to file a complaint for illegal dismissal. The Labor Arbiter found that the dismissal was illegal forlack of just cause, however, such decision was reversed by the National Labor Relations Commission(NLRC) stating that the termination of employment due to loss of confidence is within managementprerogative. On appeal, the Court of Appeals upheld the labor arbiters decision. Hence, the filing of thispetition.

ISSUE: Whether or not Respondent Farolans dismissal was illegal

HELD:

A statement of the requisites for a valid dismissal of an employee is thus in order, to wit: (a) theemployee must be afforded due process, i.e., he must be given opportunity to be heard and to defendhimself; and (b) dismissal must be for a valid cause. The manner by which Respondent Farolan wasdismissed violated the basic precepts of fairness and due process - Respondent Farolan was dismissed,

without being afforded the opportunity to be heard and to present evidence in her defense. She wasnever given a written notice stating the particular acts or omission constituting the grounds for herdismissal as required by law.

With respect to rank and file personnel, loss of trust and confidence as ground for validdismissal requires proof of involvement in the alleged events in question and that mere uncorroboratedassertions and accusations by the employer will not be sufficient. But as regards a managerial employee,mere existence of a basis for believing that such employee has breached the trust of his employer would

suffice for his dismissal. Loss of trust and confidence to be a valid ground for an employees d ismissalmust be based on a willfulbreach and founded on clearly established facts. A breach is willful if it isdone intentionally, knowingly and purposely, without justifiable excuse.

It is not disputed that Farolans job description, and the terms and conditions of heremployment, with the exception of her salary and allowances, were never reduced to writing. Evenassuming, however, that Farolan was a managerial employee, the stated ground (in the letter of termination) for her dismissal, loss of confidence, should have a basis and determination thereof cannot be left entirely to the employer.


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BACOLOD-TALISAY REALTY AND DEVELOPMENT CORPORATION,et al.v. ROMEO DELA CRUZ

587 SCRA 304 (2009), SECOND DIVISION (Carpio Morales, J.)

The twin notice requirement provided by law should be observed in order for a dismissal to be valid.

Romeo dela Cruz (respondent) is an employee of Bacolod-Talisay Realty DevelopmentCorporation (Bacolod-Talisay) as an overseer. He was suspended for 30 days for payroll paddling, selling canepoints without the knowledge and consent of management and misappropriating the proceedsthereof, and renting out tractor for use in another farm. After 30 days, he received a letter informing himthat he was dismissed from his work.

Respondent dela Cruz and Bacolod-Talisay had a confrontation before the barangay council butthey did not reach any settlement. A case for illegal dismissal was filed by dela Cruz, and it was dismissedby the Labor Arbiter as well as the NLRC. On the other hand, the Court of Appeals reversed thedecision of the NLRC finding that the Bacolor-Dalisay did not comply with the guidelines for thedismissal of an employee.

ISSUE:

Whether or not petitioner, Bacolod-Talisay observed due process in dismissing Romeo dela Cruz

HELD:

The Court of Appeals correctly held though that Bacolod-Talisay did not comply with the properprocedure in dismissing respondent. In other words, Bacolod-Talisay failed to afford dela Cruz due processby failing to comply with the twin notice requirement in dismissing him, viz: 1) a first notice to apprise himof his fault, and 2) a second notice to him that his employment is being terminated.

The letter dated June 3, 1997 sent to dela Cruz was a letter of suspension. It did not comply with therequired first notice, the purpose of which is to apprise the employee of the cause for termination and to givehim reasonable opportunity to explain his side.

In fine, while the dismissal of dela Cruz was for a just cause, the procedure in effecting the same wasnot observed.


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BILFLEX PHIL. INC. LABOR UNION et al. v. FILFLEX INDUSTRIAL ANDMANUFACTURING CORPORATION AND BILFLEX (PHILS.), INC.

511 SCRA 247 (2006), THIRD DIVISION (Carpio Morales, J.)

Any union officer who knowingly participates in an illegal strike and any worker or union who know participates in the commission of illegal acts during a strike may be declared to have lost his employment status.

Biflex Philippines Inc. Labor Union and Filflex Industrial and Manufacturing Labor Union arethe respective collective bargaining agents of the employees of the sister companies Biflex and Filflex

which are engaged in the garment business. They are situated in one big compound and they have acommon entrance.

On October 24, 1990, the labor sector staged a welga ng bayan to protest against oil price hike; theunions staged a work stoppage which lasted for several days, prompting the companies to file a petitionto declare the work stoppage illegal for failure to comply with procedural requirements.

The Labor Arbiter held that the strike is illegal and declared the officers of the union to have losttheir employment status.ISSUE:

Whether or not the staged strike is illegal and a ground for the lost of employment status of theunion officersHELD:

Article 264 (a) of the Labor Code states that any union officer who knowinglyparticipates in anillegal strike and any worker or union who knowingly participates in the commission of illegal actsduring a strike may be declared to have lost his employment status.

Thus, a union officer may be declared to have lost his employment status if he knowingly participates in an illegal strike and in this case, the strike is declared illegal by the court because the meansemployed by the union are illegal.

Here, the unions blocked the egress and ingress of the company premises thus, a violation of Article 264 (e) of the Labor Code which would affect the strike as illegal even if assuming arguendothatthe unions had complied with legal formalities and thus, the termination of the employees was valid.

The court said that the legality of a strike is determined not only by compliance with its legal

formalities but also by means by which it is carried out.


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CABALEN MANAGEMENT CO., INC.,et al. v. JESUS P. QUIAMBAO, et al. 528 SCRA 153 (2007), SECOND DIVISION (Carpio Morales, J .)

It is a well-established rule that the employer has the burden of proving a valid dismissal of an employee, foit must be for a just or authorized cause and with due process.

Jesus Quiambao, et al . were charged of tip pocketing and swapping of dining order slips with barorder slips, among others. They were dismissed from employment due to said acts. They filed a caseagainst Cabalen Management Co., Inc. (Cabalen) for illegal dismissal but the decision of the Labor

Arbiter and the National Labor Relations Commission was in favor of Cabalen. Quiambao, et al.elevatedthe case to the Court of Appeals and the CA ruled otherwise. Cabalen sought to set aside the decision of the CA which reversed the earlier rulings provided for by the Labor Arbiter and the NLRC. They alsoquestioned the Resolution given by CA which denied their Motion for Reconsideration.

The assailed CA decision held that except for respondents Vizier Inocencio and Vincent EdwardMapa whose petitions were dismissed pursuant to Section 5, Rule 7 of the Rules of the Rules of Courtand Section 4 (a) of the Rules of Procedure of the NLRC, herein Quiambao, et al. were illegally dismissedfrom their employment. The Supreme Court affirmed the CA decision, hence, Cabalen s Motion forReconsideration became subject of this Resolution. To the Motion, Quiambao, et al. filed theirOpposition.

ISSUES:

Whether or not Quiambao, et al. were illegally dismissed

HELD:

It is a well-established rule that the employer has the burden of proving a valid dismissal of anemployee, for which two requisites must concur: (a) the dismissal must be for any of the causes

expressed in the Labor Code; and (b) the employee must be accorded due process, basic of which is theopportunity to be heard and to defend himself.

To establish a just or authorized cause for dismissal, substantial evidence or "such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion" is required.Further required is that an employee sought to be dismissed must be served two written notices beforethe termination of his employment. The first notice must appraise him of the particular acts or omissionsupon which his dismissal is grounded; the second, to inform him of the employers decision to terminatehis employment. While the failure of the employer to comply with these notice requirements does notmake the dismissal illegal as long as a just or authorized cause has been proved, it renders the employerliable for payment of damages because of the violation of the workers right to statutory due process.

In the instant case, only photocopies of the statements of Balen and Malana form part of therecords despite Cabalens reliance thereon to prove respondents purported transgressions. JarciaMachine Shop and Auto Supply, Inc. v. NLRC held that the unsigned photocopies of daily time records(DTRs), which were presented by the therein employer to show that its employee was neglectful of hisduties, were of "doubtful or dubious probative value."

Cabalen, et al. did not even heed their own procedures on disciplinary actions. The only factsextant in the records are that respondents were issued above-said Corrective Action Report (CARE)Forms asking them to explain their alleged infractions within 48 hours; and they subsequently received


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notices of dismissal after they submitted their written explanations. There is, however,nothing to show that before their dismissal, Quimbao, et al. were informed of theirimmediate supervisors decision to terminate their services, or that they were thereafter invited to anadministrative investigation before the HRD manager or officer who is tasked to conduct theinvestigation in the presence of the employees immediate supervisor/s and the witnesses, if necessary, asprovided under Section IV of the companys Code of Conduct.

No record of any administrative investigation proceeding, which under the companys rules wasto be "minuted," had also been presented. Hence, only Cabalens allegation that the statements of the

witnesses were taken as part of the administrative investigation is before this Court. Allegations withoutproof do not deserve consideration.

Finally, on the dismissal of Quiambao allegedly on the ground of business losses, it wasincumbent upon Cabe to len, et al. to prove it by substantial evidence. It did not, however. In fact,Quiambao presented documents to disprove the validity of his retrenchment on that ground. Forpetitioners failure to discharge its burden then, this Court is constrained to hold that Quiambaosdismissal was not valid.


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CAPITOL WIRELESS, INC.v. CARLOS ANTONIO BALAGOT513 SCRA 672 (2007), SECOND DIVISION (Carpio Morales, J .)

Double job per se is not illegal according to Labor Code.Capitol Wireless, Inc. (Capwire) hired Carlos Antonio Balagot (Balagot) as collector on

September 16, 1987. Carlos is required to work outside the office and Capwire assigned to him amotorcycle as a service vehicle, for which it shouldered expenses for gasoline and maintenance.

Balagot was discovered to have been rendering services to China Bank and that since 1992,Carlos had been concurrently employed with Contractual Concepts, Inc. (CCI), a local manpowercompany, which assigned him to render messengerial services to China Bank in the same year.

Capwire terminated his services on the ground of grave misconduct and willful breach of trustand confidence. Capwire contends that the time of work of Balagot to other companies overlaps with his

work at Capwire. Balagot admitted the charge but he filed a complaint for illegal dismissal againstCapwire and its President Epifanio Marquez.ISSUE:

Whether or not Balagot was illegally dismissedHELD:

Verily, jurisprudence recognizes as a valid ground for dismissal of an employees unauthorizeduse of company time. And from the evidence presented, Balagot used the company vehicle in pursuing his own interests, on company time and deviating from his authorized route without permission.

Capwire has all the right and reason to cry foul as this is a clear case of moonlighting and using the companys time, money, and equipment to render service to another company.

The court said that there is no denying that taking on double job per se is not illegal according tothe Labor Code, as extra income would go a long way for an ordinary worker like Balagot. The only limitation is where one job overlaps with the other in terms of time and/or poses a clear case of conflictof interest as to the nature of business of complainants two employers.

The contention of Balagot that he is working for China Bank after 5:00 pm is untenable becausehe was sighted by the HR director within the premises of the bank at 3:35 pm and as general knowledge,the banking industry follows the ordinary working hours from 8:00 am to 5:00 pm and a bank has no use

for an employee who can only be of service to it after 5:00 pm.


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CHUAYUCO STEEL MANUFACTURING CORPORATION AND/OR EDWINCHUA v. BUKLOD NG MANGGAGAWA SA CHUAYUCO

STEEL MANUFACTURING CORPORATION513 SCRA 621 (2007),SECOND DIVISION , (Carpio Morales, J.)

A union officer who knowingly participates in an illegal strike and a worker who knowingly participates icommission of an illegal strike are deemed to have lost their employment status.

Buklod ng Manggagawa sa Chuayuco Steel Manufacturing Corporation (the union), a legitimatelabor organization, is the recognized bargaining agent of Chuayuco Steel Manufacturing Corporation (thecorporation) of which its co-petitioner Edwin Chua is the President.

In the election of the union officers, Camilo Lenizo (Lenizo) emerged as President. Thecorporation however refused to recognize the newly elected officers for the reason that there is an intra-union conflict between the factions of Lenizo and Romeo Ibanez, the former acting union president.

The union staged a strike which causes illegal acts that intimidated and harassed the corporationand non-striking employees. The strikers use physical violence and harass those employees who are noton their side by shouting and threatening them not to go to work anymore. The Labor Arbiter declaredthe strike illegal and thus, some of the members who participated in the mass action lost theiremployment status.ISSUE:

Whether or not some of the employees who participated in the strike should be reinstated without loss of seniority rightsHELD:

Article 264 (a) of the Labor Code states that any union officer who knowinglyparticipates in anillegal strike and any worker or union who knowingly participates in the commission of illegal actsduring a strike may be declared to have lost his employment status.

Thus, a union officer may be declared to have lost his employment status if he knowingly participates in an illegal strike and in this case, the strike is declared illegal by the court because the meansemployed by the union are illegal.


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CITIBANK N.A.v. NATIONAL LABOR RELATIONS COMMISSION andROSITA TAN PARAGAS

563 SCRA 87 (2008), SECOND DIVISION, (Carpio Morales, J.)

The general prayer of other reliefs is applicable only to such other reliefs warranted by law and facts.

Rosita Tan Paragas (Paragas) worked as a filing clerk of Citibank, N.A. (Citibank) for eighteen(18) years. She was terminated by Citibank for serious misconduct, willful disobedience, gross andhabitual neglect of duties and gross inefficiency. Paragas filed a complaint for illegal dismissal which wasdismissed for lack of merit, finding that the dismissal on the ground of work inefficiency was valid. TheNational Labor Relations Commission (NLRC) affirmed the decision of the Labor Arbiter with themodification that Paragas should be paid separation pay as a form of equitable relief in view of herlength of service with Citibank.

Paragas filed a Motion for Partial Reconsideration of the NLRC Resolution. She no longerchallenged her dismissal on the ground of work inefficiency, but prayed that Citibank be ordered to pay her the Provident Fund benefits under its retirement plan for which she claimed to be qualified pursuantto Citibanks Working Together Manual. The said manual provides that an employee discharged forreasons other the misconduct will be paid a percentage of her share in the Fund.

Finding that Paragas dismissal was for causes other than misconduct, the NLRC grantedParagas Motion. On appeal, the Court of Appeals dismissed the petition for lack of merit andaffirmed in totothe challenged NLRC Resolution.

ISSUE:

Whether or not the CA erred in affirming the NLRCs decision despite the latters lack of authority to pass upon and resolve issues and grant claims not pleaded and proved before the Labor

Arbiter

HELD:

Paragas indeed prayed for "other just and equitable relief," but the same may not be interpreted sobroadly as to include even those which are not warranted by the factual premises alleged by a party. Thusthe January 24, 2003 Decision of the Court of Appeals correctly stated: "It has been ruled in thisjurisdiction that the general prayer for 'other reliefs' is applicable to such other reliefs which are

warranted by the law and facts alleged by the respondent in her basic pleadings and not on a newly created issue."

Paragas assertion that she mentioned the matter regarding the Provident Fund even prior to her Motionfor Partial Reconsideration on page 14 of her position paper and again on pages 2 and 7 of her

"Notice of Appeal and Appeal Memorandum" is unavailing.

Her "Notice of Appeal and Appeal Memorandum" was filed after she had already submitted her positionpaper. Thus, any mention of the Provident Fund therein would fail to adhere to the above-ruling inMaebo, the thrust of which was precisely that all facts, evidence, and causes of action should already beproffered in the position papers and the supporting documents thereto, not in any later pleading.

As to Paragas position paper, there was only the mere mention of "Provident A & C," with thecorresponding amount of P1,086,335.43, among the actual damages that she was allegedly suffering from


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her continued severance from employment. Paragas made no attempt to define what this"Provident A & C" was, nor offer any substantiation for including it to be among heractual damages. She did not even hint how "Provident A & C" had a bearing on retirement benefits.

Thus, while Paragas did refer to the Provident Fund in her position paper, such reference was too vagueto be a basis for any court or administrative body to grant her retirement benefits.

Paragas justifies her failure to claim for retirement benefits before the labor arbiter by alleging that it would be inconsistent with her prayer for reinstatement. Paragas, however, could have easily claimedsuch benefits as an alternative relief.

In any event, Paragas is not entitled to retirement benefits as this Court finds that she was validly dismissed for serious misconduct and not merely for work inefficiency.


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DYNO NOBEL PHILIPPINES, INC. v. DWPI SUPERVISORY UNION535 SCRA 466 (2007), SECOND DIVISION (CARPIO MORALES, J.)

When a Collective Bargaining Agreement provides for a mandated increase in salary, which was voluntarilyupon by the parties, the same shall be complied with.

Edgar Ausejo (Ausejo) was hired by Dyno Noble Philippines, Inc. (DYNO-NOBEL) as a StoreClerk. Having joined the DWPI Union (DWPIU) of the rank and file, his salary was increased by P500per month effective January 1, 1996. Ausejo was then promoted to the position of General StoresSupervisor. As per company and union regulations Ausejo ceased to be a member of the rank and fileunion and joined th e DWPI Supervisory Union (DWPSU). At the same time, DYNO-NOBEL started itsSalary Scaling Program which was intended to structure and align the salary scales of its employees.

Ausejo was evaluated to have no increase as per union regulations.

Ausejo and his former union filed a request for increase in salary to DYNO-NOBEL. Ausejo andDWPIU invoked the provisions of the Collective Bargaining Agreement (CBA), contending that he isentitled to a mandated increase of P1,150. In its reply, DYNO-NOBEL denied the motion contending that Ausejo is not anymore a member of the rank and file union. DYNO-NOBEL also contended thatthe increase in salary of Ausejo was reflected in his higher salary as a General Stores Supervisor.

ISSUES: Whether or not the mandated increase of P1,150 under the CBA forged by DWPIU was already

integrated into the salary of Ausejo when he assumed the position of General Stores Supervisor

HELD: An examination of Ausejos Position Paper shows that he, just like the two other supervisors,

received the same monthly salary for the year 1997 and 1998. Logically, in accordance with the 1996CBA, for the year 1997, an increase of P1,050 was added to the salary of each of the three, to thereby amount to a total salary.

Clearly, the Salary Scaling Program implemented by DYNO-NOBEL was primarily intended "torestructure and align the salary scales of the employees on the basis of fairness and reasonableclassification of jobs.

It is hard to believe that, considering the closeness in the time between the implementation of the Salary Scaling Program and the execution of the CBA a difference of eighteen days thenegotiating panel of the Union would not have known the rather substantial benefits and advantagesaccruing to the Supervisors under the Salary Scaling Program. The purpose of the Salary Scaling Program was intended to structure the salary scales of the employees on the basis of fairness andreasonable classification of jobs. There is every reason to uphold the Program, and, to uphold the claimof Ausejo that he is entitled to the [P]1,150.00 mandated increase for 1996 upon his appointment.


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EAGLE STAR SECURITY SERVICES, INC.v. BONOFACIO L. MIRANDO594 SCRA 450 (2009), SECOND DIVISION (Carpio Morales, J.)

For off - detail to be valid, the employer must show and prove that there was lack of available posts.

Bonifacio Mirando was hired by Eagle Star Security Services, Inc. (Eagle Star) as a security guard. When he reported for work, he was told by the detachment commander not to report for duty asinstructed by the head office. Mirando called the head office and was told that he was removed fromduty by Eagle Stars operations manager Ernesto Agodilla. As Mirando was thereafter no longer asked toreport for duty, he filed a complaint for illegal dismissal against Eagle Star before the National LaborRelations Commission (NLRC).

Eagle Star alleged that Mirando went on absence without official leave (AWOL) and had notthereafter reported for work drawing it to send him a notice to explain his absence but Mirando failed torespond. It further alleged that in a Memorandum sent to Agodilla, the detachment commander reportedthat Mirando pulled out his uniform and that according to him, he would render voluntary resignation.

The labor arbiter found that Mirando was illegally dismissed. On appeal, the NLRC affirmed thelabor arbiters decision. On appeals, the CA affirmed the judgment of the NLRC.

ISSUES:

Whether or not the Court of Appeals erred in holding the dismissal illegal

HELD:

The persistence of Mirando to resume his duties, not to mention his immediate filing of the

illegal dismissal complaint, should dissipate any doubt that he did not abandon his job.Clutching at straws, Eagle Star argues that Mirando was on temporary off -detail, the period of

time a security guard is made to wait until he is transferred or assigned to a new post or client; and sinceEagle Stars business is primarily dependent on contracts entered into with third parties, the temporary off -detail of Mirando does not amount to dismissal as long as the period does not exceed 6 months,following Art. 286 of the Labor Code.

Eagle Stars citation of Article 286 of the Labor Code is misplaced . In the present case, there isno showing that there was lack of available posts at Eagle Star s clients or that there was a request fromthe client-bank, where Mirando was last posted and which continued to hire Eagle Star s services, toreplace Mirando with another. Eagle Star suddenly prevented him from reporting on his tour of duty at

the bank on December 15, 2001 and had not thereafter asked him to report for duty.


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ABELARDO P. ABELv . PHILEX MINING CORPORATION594 SCRA 683 (2009), SECOND DIVISION (Carpio Morales, J.)

Loss of trust and confidence, to be a valid ground for dismissal, must be based on willful breach of trust andbe founded on clearly established facts.

Abelardo P. Abel, an employee of the Philex Mining Corporation, was implicated in anirregularity occurring in the subsidence area of Philexs mine site. An investigation was promptly launched by the corporation s officers by conducting several fact-finding meetings. Philex found Abelguilty of (1) fraud resulting in loss of trust and confidence and (2) gross neglect of duty, and was metedout the penalty of dismissal from employment. Abel thus filed a complaint for illegal dismissal with theNational Labor Relations Commission (NLRC) with claims for annual vacation leave pay.

The Labor Arbiter ruled that Abel was dismissed illegally. He found that Philex failed to proveby substantial evidence the alleged fraud committed by Abel, explaining that the suggestively incriminating telephone conversations would not suffice to lay the basis for Philex s loss of trust andconfidence. On the charge of gross negligence, the Labor Arbiter held that no negligence was present asPhilex itself admitted that Abel reported the underloading to Tabogader, who was then in charge of thesubsidence area where the alleged anomaly was happening.

The NLRC reversed the decision of the Labor Arbiter finding that Abel was guilty of gross andhabitual neglect of duty as he approved the operations even with the gross underloading; and that he didnot act on Lupegas report con cerning certain irregularities. Abels failure to perform his duty of inspecting ANSECAs operations and vacillation on certain matters during the company investigation,among other things, constituted sufficient basis for Philex s loss of trust and confidence. Abel appealedto the Court of Appeals via certiorari which dismissed the motion. Hence, this petition.

ISSUE:

Whether or not the dismissal of Abel is validHELD:

The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide legal justification for dismissing employees. In case of doubt, such casesshould be resolved in favor of labor pursuant to the social justice policy of labor laws and theConstitution.

The first requisite for dismissal on the ground of loss of trust and confidence is that the

employee concerned must be holding a position of trust and confidence. Verily, the Court must firstdetermine if Abel holds such a position.

The second requisite is that there must be an act that would justify the loss of trust andconfidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willfulbreach of trust and founded on clearly established facts. The basis for the dismissal must be clearly andconvincingly established but proof beyond reasonable doubt is not necessary. Philex Mining Corporations evidence against Abel fails to meet this standard.


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The Labor Arbiter correctly found that the alleged telephone conversationsbetween Abel and Didith Caballero of ANSECA would not suffice to lay the basis forPhilex Mining Corporations loss of trust and confidence in Abel.


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ALABANG COUNTRY CLUB,et al. v. NATIONAL LABOR RELATIONS COMMISSION,et al.

466 SCRA 329 (2005), THIRD DIVISION, (Carpio Morales, J .)

The court cannot interfere with manag ements prerogative to close or cease its business operation just because the business is not suffering from any loss or because of the desire to provide the workers continued employment.

Petitioner Alabang Country Club, Inc. (ACCI) requested its Internal Auditor Irene Campos-Ugaldeto conduct a study on the profitability of its Food and Beverage Department (F & B Department). Irenefound out that the business had been incurring substantial losses. Consequently, the managementdecided to transfer the operation of the department to La Tasca Restaurant Inc. (La Tasca). ACCI thensent its F & B Department employees individual letters informing them that their services were being terminated and that they would receive separation pay.

The private respondent Alabang Country Club Independent Employees Union (Union) filed beforethe National Labor Relations Commission (NLRC) a complaint for illegal dismissal, unfair labor practice,regularization and damages with prayer for the issuance of a writ of preliminary injunction against ACCI.

The Labor Arbiter (LA) dismissed the complaint for illegal dismissal which was upheld by the NLRC. The Court of Appeals (CA) reversed the decisions of the LA and NLRC.

ISSUE:

Whether or not the ACCI can terminate its business operation

HELD:

One of the prerogatives of management is the decision to close the entire establishment or to closeor abolish a department or section thereof for economic reasons, such as to minimize expenses andreduce capitalization. While the Labor Code provides for the payment of separation package in case of

retrenchment to prevent losses, it does not obligate the employer for the payment thereof if there isclosure of business due to serious losses.

As in the case of retrenchment, however, for the closure of a business or a department due toserious business losses to be regarded as an authorized cause for terminating employees, it must beproven that the losses incurred are substantial and actual or reasonably imminent; that the sameincreased through a period of time; and that the condition of the company is not likely to improve in thenear future.

The closure of operation of an establishment or undertaking not due to serious business losses orfinancial reverses includes both the complete cessation of operations and the cessation of only part of acompanys activities.

For any bona fide reason, an employer can lawfully close shop anytime. Just as no law forcesanyone to go into business, no law can compel anybody to continue the same. It would be stretching theintent and spirit of the law if a court interferes with managements prerogative to close or cease itsbusiness operations just because the business is not suffering from any loss or because of the desire toprovide the workers continued employment.


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JERRY E. ACEDERA,et al. v . INTERNATIONALCONTAINER TERMINAL SERVICES INC.

395 SCRA 103 (2003), THIRD DIVISION (Carpio Morales, J .)Ordinarily, a person whose interests are already represented will not be permitted to do the same except whe

is a suggestion of fraud or collusion or that the representative will not act in good faith. Jerry Acedera,et al.are employees of International Container Terminal Services, Inc. (ICTSI) and

are members of Associated Port Checkers & Workers Union-International Container Terminal Services,Inc. (APCWU-ICTSI), a duly registered labor organization. ICTSI entered into a five-year CollectiveBargaining Agreement (CBA) with APCWU which reduced the employees work days from 304 to 250days a year.

The Wage Board decreed wage increases in NCR which affected ICTSI. Upon the request of APCWU to compute the actual monthly increase in the employees salary by multiplying the mandatedincrease by 365 days and dividing by 12 months, ICTSI stopped using 304 days as divisor and startedusing 365 days to determine the daily wage.

Later on, ICTSI entered into a retrenchment program which prompted APCWU to file acomplaint before the Labor Arbiter (LA) for ICTSIs use of 365 days, instead of 250 days, as divisor inthe computation of wages. Acedera et al. filed a Motion to Intervene which was denied by the LA. Onappeal, National Labor Relations Commission (NLRC) affirmed LAs decision. Acedera et al. filed a petition for certiorari to the Court of Appeals (CA) which was dismissed.ISSUE:

Whether or not Acedera et al. have no legal right to intervene in the case as their intervention was a superfluity

HELD: Acedera et al.stress that they have complied with the requisites for intervention because (1) they

are the ones who stand to gain or lose by the direct legal operation and effect of any judgment that may be rendered in this case, (2) no undue delay or prejudice would result from their intervention since theirComplaint-in-Intervention with Motion for Intervention was filed while the Labor Arbiter was stillhearing the case and before any decision thereon was rendered, and (3) it was not possible for them to

file a separate case as they would be guilty of forum shopping because the only forum available for them was the Labor Arbiter. Acedera et al., however, failed to consider, in addition to the rule on intervention, the rule on

representation. A labor union is one such party authorized to represent its members under Article 242(a)of the Labor Code which provides that a union may act as the representative of its members for thepurpose of collective bargaining. This authority includes the power to represent its members for thepurpose of enforcing the provisions of the CBA. That APCWU acted in a representative capacity "forand in behalf of its Union members and other employees similarly situated, the title of the case filed by itat the Labor Arbiters Office so expressly states.

While a party acting in a representative capacity, such as a union, may be permitted to intervenein a case, ordinarily, a person whose interests are already represented will not be permitted to do thesame except when there is a suggestion of fraud or collusion or that the representative will not act in

good faith for the protection of all interests represented by him. Acedera et al.cite the dismissal of the case filed by ICTSI, first by the Labor Arbiter, and later by the Court of Appeals. The dismissal of the case does not, however, by itself show the existence of fraudor collusion or a lack of good faith on the part of APCWU. There must be clear and convincing evidenceof fraud or collusion or lack of good faith independently of the dismissal. This, Acedera et al. failed toproffer.

Acedera et al. likewise express their fear that APCWU would not prosecute the case diligently because of its "sweetheart relationship" with ICTSI. There is nothing on record, however, to supportthis alleged relationship which allegation surfaces as a mere afterthought because it was never raised early


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on. It was raised only in petitioners-appellants reply to ICTSIs comment in the petition atbar, the last pleading submitted to this Court, which was filed on June 20, 2001 or morethan 42 months after petitioners-appellants filed their Complaint-in-Intervention with Motion toIntervene with the Labor Arbiter.

To reiterate, for a member of a class to be permitted to intervene in a representative action,fraud or collusion or lack of good faith on the part of the representative must be proven. It must bebased on facts borne on record. Mere assertions, as what petitioners-appellants proffer, do not suffice.


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ALDEGUER & CO., INC. /LOALDE BOUTIQUE v. HONEYLINE TOMBOC560 SCRA 49 (2008), SECOND DIVISION (Carpio Morales, J.)

Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorepresentative is a just cause for his dismissal from employment.

Petitioner Aldeguer and Co., Inc./Loalde Boutique promoted respondent Honeyline Tomboc(Tomboc) as Officer-in-Charge (OIC) of its Loalde Ayala Boutique (Loalde Ayala) in the Ayala Center,Cebu City. After conducting an audit of sales, Loalde Boutique concluded that Tomboc misappropriatedcertain amount which is a just cause for termination. Consequently, Tombo was notified of thetermination of her services.

Tomboc subsequently filed a complaint in the National Labor Relations Commission (NLRC)for illegal dismissal, illegal salary deductions, underpayment of wages, non-payment of 13th month pay and damages. The Labor Arbiter dismissed the complaint which was upheld by the NLRC. On appeal,the Court of Appeals reversed the NLRC decision and ordered her reinstatement with full payment of back wages and without loss of seniority rights. The CA held Tomboc was illegally dismissed and wasdenied of due process as she was not afforded a chance to refute the charge of misappropriation againsther.

ISSUES:

Whether or not the termination of Tomboc was for just cause

HELD:

Aldeguer and Co., Inc./Loalde Boutique has shown just cause for the termination of Tombocsemployment under Art. 282 of the Labor Code on the ground of fraud or willful breach by theemployee of the trust rep osed in him by his employer or duly authorized representative.

The claim of Jinky, a cashier, in her affidavit that it was Tomboc who turned over the deposits tothe bank representative on May 13, 1997 was corroborated by Kay, the branch head of the Solidbank-Gorordo Branch who personally picked up the deposits from Loalde Ayala on May 13 and 14, 1997.

Aldeguer and Co., Inc./Loalde Boutique in fact presented deposit slips showing that, contrary to itspolicy, cash sales for the day were on several occasions not deposited on the next banking day.

Tomboc s contention that the Labor Arbiter and the NLRC ignored the Memorandum issued by Aldeguer and Co., Inc./Loalde Boutique on February 29, 1997 indicating her duties and responsibilities which do not include handling cash collection of sales and making deposits with the bank does not lie.It has been established that while a boutique-in-charge is ordinarily not allowed to handle cashiering, shemay do so, however, if the need arises. At any rate, Jinky and some of the affiants stated in theiraffidavits that Tomboc interfered with cashiering tasks, in violation of company policy.


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CORAZON ALMIREZv. INFINITE LOOP TECHNOLOGY CORPORATION,et al.

481 SCRA 364 (2006), THIRD DIVISION (Carpio Morales, J.) Under the control test, an employer-employee relationship exists where the person for whom the serv

performed reserves the right to control not only the end achieved, but also the manner and means to be used in reacend.

Petitioner Corazon Almirez was hired by respondent Infinite Loop Technology Corporation(Infinite Loop) to be a Refinery Senior Process Design Engineer for a specific project starting October18, 1999 with a guaranty of 12 continuous months of service or until a mutually agreed date. However,

Almirez was later on suspended. Hence, she filed an action before the National Labor RelationsCommission (NLRC) against Infinite Loop and its General Manager/President/co-petitioner Edwin R.Rabino on the ground of breach of contract of employment.

Both the Labor Arbiter and the NLRC ruled that there is an existing employer-employeerelationship between Almirez and Infinite Loop since the latter exercises control over the means andmethods used by Almirez in the performance of her duties.

The Court of Appeals ruled that there was no existing employer-employee relationship betweenthe parties since Almirez was hired to render her professional service only for a specific project.ISSUE:

Whether or not there is employee-employer relationship between Almirez and Infinite LoopHELD :

To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the four-fold test, to wit: (1) the manner of selection and engagement; (2) the payment of wages;(3) the presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. Of these four, the last one, the so called "control test" is commonly regarded as the most crucialand determinative indicator of the presence or absence of an employer-employee relationship.

Under the control test, an employer-employee relationship exists where the person for whom theservices are performed reserves the right to control not only the end achieved, but also the manner andmeans to be used in reaching that end.

From the earlier-quoted scope of Almirez professional services, there is no showing of a power

of control over petitioner. The services to be performed by her specified what she needed to achieve butnot on how she was to go about it.Contrary to the finding of the Labor Arbiter, as affirmed by the NLRC, paragraph No. 6 of the

"Scope of [Almirez ] Professional Services" requiring her to "[m]ake reports and recommendations to thecompany management team regarding work progress, revisions and improvement of process design on aregular basis as required by company management team" d oes not "show that the companysmanagement team exercises control over the means and methods in the performance of her duties asRefinery Process Design Engineer." Having h ired Almirez professional services on account of her"expertise and qualifications" as Almirez herself proffers in her Position Paper, the company naturally expected to be updated regularly of her "work progress," if any, on the project for which she wasspecifically hired.

The deduction from Almirez remuneration of amounts representing SSS premiums, Philhealth

contributions and withholding tax, was made in the only pay slip issued to Almirez, that for the period of January 16-31, 2000, the other amounts of remuneration having been documented by cash vouchers.Such pay slip cannot prove the existence of an employer-employee relationship between the parties.

As for the designation of the payments to Almirez as "salaries," it is not determinative of theexistence of an employer-employee relationship. "Salary" is a general term defined as "a remuneration forservices given." It is the above-quoted contract of engagement of services-letter dated September 30,1999, together with its attachments, which is the law between the parties. Even Almirez concedesrendering service "based on the contract," which, as reflected earlier, is bereft of a showing of power of


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control, the most crucial and determinative indicator of the presence of an employer-employee relationship.


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SPOUSES PONCIANO AYA-AY, SR. and CLEMENCIA AYA-AY v. ARPAPHILSHIPPING CORP., and MAGNA MARINE INC.

481 SCRA 282 (2006), THIRD DIVISION (Carpio Morales, J.) Death benefits shall be awarded only when the cause of death of the employee was proved by substantial ev

be reasonably connected with his work or his working conditions.Ponciano Aya-ay Jr. is a seaman engaged by Arpaphil Shipping Corporation to work under an

11-month contract of employment for co-respondent Magna Marine Inc. On board the vessel and whileperforming his work, Aya-ay met an eye injury thereby requiring him to undergo a corneal transplant.Upon mutual consent of Magna Marine and Aya-ay, Aya-ay was repatriated to Manila. While waiting foran eye donor, Aya-ay died. The death certificate indicates that the immediate cause of his death iscerebro-vascular accident (CVA) commonly known as stroke.

Petitioners Ponciano Aya-ay Sr. and Clemencia Aya-ay, parents of Aya-ay, now claims for deathcompensation benefits from Arpaphil and Magna Marine, which the latter rejected.

Both the National Labor Relations Commission (NLRC) and the Court of Appeals (CA) deniedtheir claims. Hence, this appeal.ISSUE:

Whether or not the heirs of Aya-ay are entitled to claim death benefits under POEA StandardEmployment ContractHELD :

Part II, Section C, Nos. 1 and 3 of the POEA Standard Employment Contract Governing theEmployment of All Filipino Seamen on Board Ocean-Going Vessels provide, among other things thatcompensation and benefits may be availed of by the worker provided he/she dies during the term of thecontract or he/she has died as a result of injury or illness during the term of the employment.

Upon mutual consent of Aya-ay and Arpaphil and Magna Marine, he was on July 5, 1995repatriated on account of his eye injury. Thus his employment had been effectively terminated on thatparticular date. At all events, under the October 15, 1994 Contract of Employment, Aya-ay ceased to bean employee on September 26, 1995, hence, he was no longer an employee when he died on December1, 1995.

It is, therefore, crucial to determine whether Aya-ay died as a result of, or in relation to, the eyeinjury he suffered during the term of his employment. If the injury is the proximate cause, or at leastincreased the risk, of his death for which compensation is sought, recovery may be had for said death.

Unless there is substantial evidence showing that: (a) the cause of Aya- ays death was reasonably connected with his work; or (b) the sickness/ailment for which he died is an accepted occupationaldisease; or (c) his working conditions increased the risk of contracting the disease for which he died,death compensation benefits cannot be awarded.


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ARLYN D. BAGOv. NATIONAL LABOR RELATIONS COMMISSION andSTANDARD INSURANCE CO. INC. AND/OR ERNESTO ECHAUS

520 SCRA 644 (2007), SECOND DIVISION (Carpio-Morales, J .)

As a general rule, employers are given a wide latitude of discretion in terminating the employment of man personnel or those who, while not of similar rank, perform functions which by thei r nature require the employers full trust and confidence.

Arlyn Bago (Bago) and five other employees were dismissed by Celia P. Abordo (Abordo), headof the Tuguegarao Branch of Standard Insurance Company Incorporated (SICI) for manipulating thecompany funds and spreading damaging rumors. Bago, the auditor of the company, and the five otheremployees apologized for spreading the rumors. Abordo issued a memo to the employees requiring anexplanation for the charges. Thinking that Abordo had already forgiven them, the employees did notrespond to the memo.

Not receiving any reply, the Human Resource Department of SICI proceeded with theirinvestigation and found all the employees guilty and dismissed them for loss of confidence and seriousmisconduct. Bago filed a complaint for illegal dismissal. She contended that there was no due process inthe investigation and that dismissal is a severe penalty for the offenses charged.

The Labor Arbiter found that Bago was illegally dismissed but the National Labor RelationsCommission (NLRC), reversed the Labor Arbiter's decision and declared valid the termination of Arlynsservices on the grounds of loss of trust and confidence and dishonesty.

ISSUE:

Whether or not Bago was illegally dismissed by Standard Insurance Company IncorporatedHELD:

As a general rule, employers are allowed a wide latitude of discretion in terminating the

employment of managerial personnel or those who, while not of similar rank, perform functions whichby their nature require the employers full trust and confidence. Proof beyond reasonable doubt is notrequired. It is sufficient that there is some basis for loss of confidence, such as when the employer hasreasonable ground to believe that the employee concerned is responsible for the purported misconduct,and the nature of his participation therein renders him unworthy of the trust and confidence demandedby his position.

This must be distinguished from the case of ordinary rank-and-file employees, whosetermination on the basis of these same grounds requires a higher proof of involvement in the events inquestion; mere uncorroborated assertions and accusations by the employer will not suffice.

Even assuming that Arlyn may be considered a rank and file employee, sufficient evidence of herinvolvement in the dishonest scheme of SICIs accountant and cashier who were also charged and foundguilty exists. Not only was her participation established by the internal audit conducted; the cashier

identified her as part of the scheme, and she herself admitted her involvement.


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CALAMBA MEDICAL CENTER v . NATIONAL LABOR RELATIONSCOMMISSION,et al.

571 SCRA 585 (2008), SECOND DIVISION (Carpio Morales, J .)

An employment relationship exists between a physician and a hospital if the hospital controls both the meanthe details of the process by which the physician is to accomplish his task.

Petitioner Calamba Medical Center (CMC), engaged the services of medical doctors-spousesRonaldo Lanzanas (Dr. Ronaldo) and Merceditha Lanzanas (Dr. Merceditha) as part of its team of resident physicians. They were given, among others, identification cards and work schedules; and werepaid a monthly retainer. They were likewise enrolled in the Social Security System (SSS). Subsequently,CMCs medical director issued a Memorandum to Dr. Ronaldo after a resident physician overheard Dr.Ronaldo and a fellow employee discussing the low admission in the hospital. After the incident involving her husband, Dr. Merceditha was no longer given any work assignments.

Afterwards, the rank and file employees union of Calamba Medical Center went on a strike. Dr.Ronaldo and Dr. Merceditha meanwhile filed a complaint for illegal suspension and illegal dismissal,respectively before the National Labor Relations Commission Regional Arbitration Board (NLRC-RAB).Consequently, the Department of Labor and Employment (DOLE) issued a return to work order. Dr.Ronaldo, on the other hand, received a notice of termination indicating his failure to return for work. Dr.Ronaldo thus amended his complaint to illegal dismissal. The CMC contends that the doctors-spousesare not employees of the same, so that they cannot be illegally dismissed.

ISSUES:

Whether or not an employee-employer relationship does not exist between Calamba MedicalCenter and the doctors-spouses Lanzanas

HELD:

Under the control test, an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is toaccomplish his task.

Where a person who works for another does so more or less at his own pleasure and is notsubject to definite hours or conditions of work, and is compensated according to the result of his effortsand not the amount thereof, the element of control is absent.

As priorly stated, the spouses-doctors maintained specific work-schedules, as determined by petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight hours each

week and which were strictly to be observed under pain of administrative sanctions.

That CMC exercised control over spouses-doctors gains light from the undisputed fact that inthe emergency room, the operating room, or any department or ward for that matter, spouses- doctors

work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval orconsent of CMC or its medical director, no operations can be undertaken in those areas. For control testto apply, it is not essential for the employer to actually supervise the performance of duties of theemployee, it being enough that it has the right to wield the power.


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With respect to spouses-doctors sharing in some hospital fees, this scheme doesnot sever the employment tie between them and CMC as this merely mirrors additionalform or another form of compensation or incentive similar to what commission-based employeesreceive as contemplated in Article 97 (f) of the Labor Code.

The spouses-doctors were in fact made subject to petitioner-hospital s Code of Ethics, theprovisions of which cover administrative and disciplinary measures on negligence of duties, personnelconduct and behavior, and offenses against persons, property and the hospitals interest.

More importantly, the CMC itself provided incontrovertible proof of the employment status of respondents, namely, the identification cards it issued them, the payslips and BIR W-2 (now 2316)Forms which reflect their status as employees, and the classification as salary of their remuneration.Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program. It bears noting at thisjuncture that mandatory coverage under the SSS Law is premised on the existence of an employer-employee relationship,[35] except in cases of compulsory coverage of the self-employed. It would bepreposterous for an employer to report certain persons as employees and pay their SSS premiums as wellas their wages if they are not its employees.

And if the spouses-doctors were not CMCs employees, how does it account for its issuance of the earlier-quoted March 7, 1998 memorandum explicitly stating that respondent is employed in it andof the subsequent termination letter indicating Dr. Ronaldo s employment status.

Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, anemployer-employee relationship exists between the resident physicians and the training hospitals, unlessthere is a training agreement between them, and the training program is duly accredited or approved by the appropriate government agency. In the spouses- doctors case, they were not undergoing any specialization training. They were considered non-training general practitioners, assigned at theemergency rooms and ward sections.


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CLARION PRINTING HOUSE, INC. et al. v . NATIONAL LABOR RELATIONS COMMISSIONet al.


Retrenchment is a valid ground for the dismissal of an employee.

Clarion Printing House (Clarion), a company owned by EYCO Group of Companies (EYCO)hired Michelle Miclat (Miclat) as marketing assistant on a probationary basis. During that time, she wasnot informed of the standards that she should meet to qualify as a regular employee.

EYCO subsequently filed a petition for petition for suspension of payment as well as anappointment of a rehabilitation receivership committee before SEC on the ground that they are suffering financial difficulty. Pursuant to this, a retrenchment occurred, thus terminating Miclat.

Conversely, Miclat filed a complaint for illegal dismissal before the NLRC. Miclat contends thatassuming her termination is necessary, it was not done in a proper manner; there was no notice that wasgiven to her. On the other hand, Clarion contends that they are not liable for retrenching someemployees because EYCO is being placed under receivership, and a memorandum was given toemployees, hence they substantially complied with the notice requirement. NLRC rendered its decisionin favor of Miclat and found that she was illegally dismissed. On appeal, the Court of Appeals held thatClarion failed to prove its ground for retrenchment as well as compliance with the mandated procedure.It further ruled that Miclat should be reinstated and paid backwages. Hence, this petition.

Issue:

Whether or not Miclat was illegally dismissed

Held:

It is likewise well-settled that for retrenchment to be justified, any claim of actual or potentialbusiness losses must satisfy the following standards: (1) the losses are substantial and not de minimis ; (2)the losses are actual or reasonably imminent; (3) the retrenchment is reasonably necessary and is likely tobe effective in preventing expected losses; and (4) the alleged losses, if already incurred, or the expectedimminent losses sought to be forestalled, are proven by sufficient and convincing evidence.

From the provisions of P.D. No. 902-A, as amended, the appointment of a receiver ormanagement committee by the SEC presupposes a finding that, inter alia , a company possesses sufficientproperty to cover all its debts but "foresees the impossibility of meeting them when they respectively falldue" and "there is imminent danger of dissipation, loss, wastage or destruction of assets of otherproperties or paralization of business operations."

That the SEC, mandated by law to have regulatory functions over corporations, partnerships or

associations, appointed an interim receiver for the EYCO Group of Companies on its petition in lightof, as quoted above, the therein enumerated "factors beyond the control and anticipation of themanagement" rendering it unable to meet its obligation as they fall due, and thus resulting to"complications and problems . . . to arise that would impair and affect [its] operations . . ." shows thatCLARION, together with the other member-companies of the EYCO Group of Companies, wassuffering business reverses justifying, among other things, the retrenchment of its employees.


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ERIC DELA CRUZet al. v. COCA-COLA BOTTLERS PHILS. INC.594 SCRA 761 (2009), SECOND DIVISION (Carpio Morales, J.)

Acts by employees which are inimical to the employers interest are deemed willful breach of the trust and confidence reposed in them.

Raymund Sales, a salesman of Coca-Cola Bottlers Phils. Inc (Coca-Cola), figured an accident whiledriving a vehicle he was not authorized to use. Sales was hospitalized and was observed that he was under theinfluence of liquor at the time of the accident and was included in the police blotter.

Respondent Coca-Cola discovered that Sales co-employees secured a police report and medicalcertificate which omitted the fact that Sales was under the influence of alcohol. Coca- Cola required SalesSupervisors John Espina, Raul M. Lacuata (Lacuata), and Eric dela Cruz (dela Cruz), to explain why nodisciplinary action be taken against them. Espina denied the fact that he altered the documents. PetitionerDela Cruz said that he just asked for a copy of the police report one Melvin Asuncion. And lastly, PetitionerLacuata said that he has no participation in the alleged alteration because he only picked-up the medicalcertificate from the Hospital. Further investigation shows that they conspired to alter the medical certificateand the police report. After such finding they were dismissed from employment. Espina, Lacuata and dela

Cruz filed separate complaints for illegal dismissal with the contention that the alleged altering of documentsis work related and is a willful breach of confidence.

The Labor Arbiter dismissed Espinas complaint for lack of merit. Dela Cruz was found to beillegally dismissed. Lacuata was found to be at fault for doing nothing to stop Espina from obtaining falsepolice and medical reports. The respondent Coca-Cola was ordered to reinstate dela Cruz and pay bothpetitioners dela Cruz and Lacuata their respective back wages, 13th month pay and separation pay. On appeal,the National Labor Relations Commission (NLRC) affirmed the Labor Arbiters decision but deleted theaward of moral damages in favor of dela Cruz. Its motion for reconsideration having been denied, respondentfiled a Petition for Certiorari before the Court of Appeals (CA). The CA set aside the NLRC decision andheld that petitioners Lacuata and dela Cruz were validly dismissed.

ISSUE: Whether or not Lacuata and dela Cruz were validly dismissed on the grounds of altering the medical

certificate and police report of Sales

HELD:

Dela Cruz et al. contend, however, that for loss of trust and confidence to be a ground fortermination of employment, it must be willful and must be connected with the employees work.

By obtaining an altered police report and medical certificate, Dela Cruz et al. deliberately attempted to cover up the fact that Sales was under the influence of liquor at the time the accident took place. In so doing, they committed acts inimical to respondents interests. They thus committed a work-related willful breach of the trust and confidence reposed in them.


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PHILIPPINE DIAMOND HOTEL AND RESORT, INC. (MANILA DIAMONDHOTEL) v . MANILA DIAMOND HOTEL EMPLOYEES UNION


An ordinary striking worker cannot be dismissed for mere participation in an illegal strike unless there be a that he committed illegal acts during a strike.

The Diamond Hotel Employee's Union (the union) filed a petition for Certification Electionbefore the DOLE-National Capital Region (NCR) seeking certification as the exclusive bargaining representative of its members. The DOLE-NCR denied said petition as it failed to comply with the legalrequirements.

The Union later notified petitioner hotel of its intention to negotiate for collective bargaining agreement (CBA). The Human Resource Department of Diamond Hotel rejected the notice and advisedthe union since it was not certified by the DOLE as the exclusive bargaining agent, it could not berecognized as such. Since there was a failure to settle the dispute regarding the bargaining capability of the union, the union went on to file a notice of strike due to unfair labor pracritce (ULP) in that the

hotel refused to bargain with it and the rank-and-file employees were being harassed and prevented fromjoining it. In the meantime, Kimpo filed a complaint for ULP against petitioner hotel.

After several conferences, the union suddenly went on strike. The following day, the NationalUnion of Workers in the Hotel, Restaurant and Allied Industries (NUWHRAIN) joined the strike andopenly extended its support to the union. The some of the entrances were blocked by the striking employees. The National Labour Relations Commission (NLRC) representative who conducted anocular inspection of the Hotel premises confirmed in his Report that the strikers obstructed the freeingress to and egress from the Hotel. The NLRC thus issued a Temporary Restraining Order (TRO)directing the strikers to immediately "cease and desist from obstructing the free ingress and egress fromthe Hotel premises. During the implementation of the order, the striking employees resisted and someof the guards tasked to remove the barricades were injured. The NLRC declared that the strike was

illegal and that the union officers and members who participated were terminated on the grounds of participating in an illegal strike.

The union contended that the strike was premised on valid ground and that it had the capacity tonegotiate the CBA as the representatives of the employees of Diamond Hotel. The union contendedthat their dismissal is tantamount to an unfair labour practice and union busting.On appeal, the Court of Appeals affirmed the NLRC Resolution dismissing the complaints of Mary

Grace, Agustin and Rowena and of the union. It modified the NLRC Resolution, however, by ordering the reinstatement with back wages of union members.

ISSUE:

Whether or not the dismissal of the union members is valid on the grounds of participating in anillegal strike

HELD:

Even if the purpose of a strike is valid, the strike may still be held illegal where the meansemployed are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are injurious to the rights to property renders a strike illegal. And so is


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picketing or the obstruction to the free use of property or the comfortable enjoyment of life or property, when accompanied by intimidation, threats, violence, and coercion as toconstitute nuisance.

As the appellate court correctly held, the union officers should be dismissed for staging andparticipating in the illegal strike, following paragraph 3, Article 264(a) of the Labor Code which providesthat ". . .any union officer who knowingly participates in an illegal strike and any worker or union officer

who knowingly participates in the commission of illegal acts during strike may be declared to have losthis employment status . . ."

An ordinary striking worker cannot, thus be dismissed for mere participation in an illegal strike. There must be proof that he committed illegal acts during a strike, unlike a union officer who may bedismissed by mere knowingly participating in an illegal strike and/or committing an illegal act during astrike.


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DIGITEL TELECOMMUNICATIONS PHILIPPINES, INC.,et al. v . MARIQUIT SORIANO

492 SCRA 704 (2006), THIRD DIVISION (Carpio Morales, J.) Forced resignation must be sufficiently established by substantial, concrete and credible evidence.

Mariquit Soriano (Soriano) was hired as Director of Marketing by Digitel TelecommunicationsPhilippines, Inc. (Digitel). Soriano worked under Vice President for Business Division Eric J. Severino(Severino) and Senior Executive Vice President Johnson Robert L. Go (Go). Following a professionaldispute against Severino and Go, Soriano filed a resignation letter which was accepted by her superiors.

After her resignation, Soriano filed a suit for illegal termination alleging that she was forced toresign due to professional and sexual harassment. She alleged that her superiors are preventing herformer colleagues in testifying to the sexual harassment. She produced an affidavit by one of the personsinvolved with Digitel stating that the employees of the company were being forced not to testify againstGo and Severino. In defense, Go and Severino provided witnesses that testified that the acts alleged by Soriano din not happen.

The Labor Arbiter held that Mariquit voluntarily resigned, thus dismissing the complaint. Onappeal, the NLRC affirmed the findings of the Labor Arbiter. The Court of Appeals reversed thedecision of NLRC. Hence,this petition.

ISSUE:

Whether or not the Soriano was forced to resign, due to professional and sexual harassment,thus amounting to constructive dismissal.

HELD:

Soriano's own allegation, although they are so detailed, appear incredible if not downright puny.

An analysis of her statements shows that her own conclusion that she was being sexually andprofessionally harassed was on the basis of her own suppositions, conjectures, and surmises.

She could not satisfactorily explain her allegation that she was consistently professionally harassed by respondent Severino. The latter's alleged words: "How come you claim you know so muchyet nothing ever gets done in your department?" do not jurisprudentially constitute nor clearly establish"professional harassment." Aside from these words, the complainant could only venture to allegeinstances in general and vague terms. As to the facts allegedly constituting "sexual harassment" advancedby Go and Severino, after an objective analysis over their assertions as stated in their respective counter-affidavits and further considering the other supporting documents attached to the respondents'pleadings, it is found that these far out weigh the Soriano's own evidence

A reading of the affidavit of the witness, who was never an employee nor present at the party of Digitel, reveals, however, that she merely "concluded" that the employees of Digitel were instructed orharassed not to testify in favor of Soriano when they failed to meet one Matet Ruiz, a Digitel employee"who kept avoiding to meet

With such tendency to threaten resignation everytime higher management would refuse herdemand to transfer subordinates who had administrative differences with her, we therefore have nodoubt that complainant voluntarily resigned when respondent Severino refused to heed her demand that


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Ms. Arnedo and Ms. Inductivo, her subordinates, be transferred to other departments. Wealso have no doubt that such resignation does not constitute constructive dismissal, muchless an illegal one.


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DE LA SALLE UNIVERSITY and DR. CARMELITA I. QUEBENGCOv. DE LA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSU-NAFTEU)

584 SCRA 592 (2009), SECOND DIVISION (Carpio Morales, J .)

It is axiomatic in labor relations that a Collective Bargaining Agreement entered into by a legitimate lorganization and an employer becomes the law between the parties, compliance with which is mandated by expressthe law.

In 2001, a splinter group of the De La Salle University Employees Association (DLSU-NAFTEU) led by one Belen Aliazas (Aliazas group) filed a petition for conduct of elections with theDepartment of Labor and Employment (DOLE), alleging that the then incumbent officers of DLSU-NAFTEU had failed to call for a regular election since 1985. DOLE-NCR held that the holdoverauthority of DLSU-NAFTEU s incumbent set of officers had been extinguished by virt ue of theexecution of the CBA. It accordingly ordered the conduct of elections to be placed under the controland supervision of its Labor Relations Division and subject to pre-election conferences. Even with theconditions for the conduct of election imposed by the DOLE-NCR, DLSU-NAFTEU called for aregular election without prior notice to the DOLE and without the conduct of pre-election conference.

The incident prompted the Aliazas group to file an Urgent Motion for Intervention with the Bureau of Labor Relations (BLR) of the DOLE. The BLR granted the Aliaza s groups motion for interventionthree days before the intended date of election.

The Aliazas group requested the University toescrow all union dues/agency fees and whatevermoney considerations deducted from salaries of concerned co-academic personnel until such time thatan election of union officials has been scheduled and subsequent elections has been held. DLSU andQuebengco s move prompted DLSU-NAFTEU to file a complaint for Unfair Labor Practice (ULPcomplaint), claiming that they unduly interfered with its internal affairs and discriminated against itsmembers.

The Labor Arbiter dismissed DLSU- NAFTEUs ULP complaint. The Court of Appeals reversed

the said Order of the NLRC with respect to the subsuming of ULPs complaint under the certifiedcase, the ULP complaint having been, at the time the NLRC Third Division O rder was issued, already disposed of by the Arbiter and was in fact pending appeal before the NLRC Second Division.

ISSUE:

Whether or not DLSU and Quebengco is guilty of unfair labor practice

HELD:

On the other matter raised by DLSU and Quebengco that their acts of withholding union andagency dues and suspension of normal relations with respondents incumbent set of officers pending the

intra-union dispute did not constitute interference, the Court finds for DLSU-NAFTEU.

Pending the final resolution of the intra-union dispute, DLSU-NAFTEU s officers remainedduly authorized to conduct union affairs. It bears noting that at the time DLSU and Quebengco squestioned moves were adopted, a valid and existing CBA had been entered between the parties. It thusbehooved DLSU to observe the terms and conditions thereof bearing on union dues and representation.It is axiomatic in labor relations that a CBA entered into by a legitimate labor organization and an

employer becomes the law between the parties, compliance with which is mandated by express policy of the law.


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Respecting the issue of damages, DLSU-NAFTEU, in its Position Paper beforethe Labor Arbiter, prayed for the award of exemplary damages, nominal damages, and a ttorneys fees.

Exemplary or corrective damages are imposed by way of example or correction for the publicgood in addition to the moral, temperate, liquidated or compensatory damages. While the amount of exemplary damages need not be proved, respondent must show proof of entitlement to moral, temperateor compensatory damages before the Court may consider awarding exemplary damages. No suchdamages were prayed for, however, hence, the Court finds no basis to grant the prayer for exemplary damages.


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CARMEN B. DY-DUMALASA v. DOMINGO SABADO S. FERNANDEZ,et al. 593 SCRA 656, (2009), SECOND DIVISION (Carpio Morales, J .)

Procedural rules governing service of summons, in quasi-judicial proceedings, are not strictly construe

Domingo Fernandez, et al., former employees of Helios Manufacturing Corporation (HELIOS),filed a complaint for illegal dismissal or illegal closure of business, non-payment of salaries and othermoney claims against HELIOS. The Labor Arbiter found that the closure of the Muntinlupaoffice/plant was a sham, as HELIOS simply relocated its operations to a new plant in Carmona, Caviteunder the new name of Pat & Suzara, in response to the newly-established local union. HELIOS and itBoard of Directors and stockholders were held liable.

The NLRC modified the Labor Arbiters Order, holding that Dumalasa is not jointly andseverally liable with HELIOS for Fernandez, et al.s claim, there being no showing that she acted in badfaith nor that HELIOS cannot pay its obligations. Dumalasa moved for reconsideration, but this wasdenied, hence, she appealed to the Court of Appeals.

The appellate court reversed and set aside the NLRC Resolution, holding that what the NLRC,in effect, modified was not the Order denying the Motion to Quash the Writ of Execution, but theLabor Arbiters Decision itself. This is an impermissible act since the Decision has become final andexecutor; hence, it could no longer be reversed or modified.

Respecting NLRCs pronouncement that Dumalasa was not jointly and severally liable, theappellate court held that the same is a superfluity since there was no statement, either in the main case orin the Writ, that the liability is solidary. Therefore, Dumalasa is merely jointly liable for the judgmentaward. Dumalasa moved for reconsideration of the appellate courts Decision, which was denied. Hence,this petition.

ISSUES:

1.) Whether or not the Labor Arbiter acquired jurisdiction over Dumalasa

2.) Whether or not Dumalasa is solidarily liable with HELIOS for the judgment award

HELD:

Contrary to Dumalasa s contention, the Labor Arbiter acquired jurisdiction over her personregardless of the fact that there was allegedly no valid service of summons. It bears noting that, in quasi-judicial proceedings, procedural rules governing service of summons are not strictly construed.Substantial compliance therewith is sufficient. In the cases at bar, Dumalasa, her husband and threeother relatives, were all individually impleaded in the complaint. The Labor Arbiter furnished her with

notices of the scheduled hearings and other processes. It is undisputed that HELIOS, of which she andher therein co-respondents in the subject cases were the stockholders and managers, was in fact heard,proof of which is the attendance of her husband, President-General Manager of HELIOS, together withcounsel in one such scheduled hearing and the Labor Arbiters consideration of their position paper inarriving at the Decision, albeit the same position paper was belatedly filed.

Clearly, Dumalasa was adequately represented in the proceedings conducted by the Labor Arbiter by the lawyer retained by HELIOS.


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Taking into account the peculiar circumstances of the cases, HELIOS knowledgeof the pendency thereof and its efforts to resist them are deemed to be knowledge andaction of petitioner. That Dumalasa and her fellow members of the Board refused to heed the summonsand avail of the opportunity to defend themselves as they instead opted to hide behind the corporate veildoes not shield them from the application of labor laws.

Dumalasa cannot now thus question the implementation of the Writ of Execution on her on thepretext that jurisdiction was not validly acquired over her person or that HELIOS has a separate anddistinct personality as a corporate entity. To apply the normal precepts on corporate fiction and thetechnical rules on service of summons would be to overturn the bias of the Constitution and the laws infavor of labor.

On Carmens liability

A perusal of the Labor Arbiters Decision readily shows that, notwithstanding the finding of badfaith on the part of the management, the dispositive portion did not expressly mention the solidary liability of the officers and Board members, including Dumalasa.

Ineluctably, absent a clear and convincing showing of the bad faith in effecting the closure of HELIOS that can be individually attributed to petitioner as an officer thereof, and without thepronouncement in the Decision that she is being held solidarily liable, petitioner is only jointly liable.

The Court in fact finds that the present action is actually a last-ditch attempt on the part of Dumalasa to wriggle its way out of her share in the judgment obligation and to discuss the defenses

which she failed to interpose when given the opportunity. Even as Dumalasa avers that she is notquestioning the final and executory Decision of the Labor Arbiter and admits liability, albeit only joint,still, she proceeds to interpose the defenses that jurisdiction was not acquired over her person and that

HELIOS has a separate juridical personality.

As for Dumalasas questioning the levy upon her house and lot, she conveniently omits tomention that the same are actually conjugal property belonging to her and her husband. Whetherpetitioner is jointly or solidarily liable for the judgment obligation, the levied property is not fully absolved from any lien except if it be shown that it is exempt from execution.


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DYNAMIC SIGNMAKER OUTDOOR ADVERTISING SERVICES, INC.,et al. v. FRANCISCO POTONGAN

461 SCRA 328 (2005), THIRD DIVISION (Carpio Morales, J.) If exercised in good faith for the purpose of advancing business interests, not of defeating or circumventing

of employees, the managerial prerogative to transfer personnel from one area of operation to another is justified.

Respondent Francisco Potongan (Potongan) worked for Dynamic Signmaker Outdoor Advertising Services (Corporation) as a Production Supervisor. The union of rank-and-file employees of corporation declared a strike on the ground that the corporation replaced all its supervisors.Subsequently Potongan did not receive his salary and he was advised to take an indefinite leave of absence. Then Potongan was being charge by the company fo r the alleged burning of corporations mainbuilding and for the disruption of work. However, Potangan denied all allegations. Potongan then filed acomplaint for illegal dismissal with NLRC against corporation.

The Labor Arbiter dismissed the case on the ground that the action was barred by priorjudgment regarding the strike of union. Potongan then appealed, contending that the Labor Arbiter didnot acquire jurisdiction over him because he was not even a member of the union. The NLRC set asidethe Labor Arbiters decision and directed respondent Potongan to go back to work.

The Labor Arbiter eventually dismissed Potongans complaint for lack of merit, holding that,inter alia , Potongan should have reported back to work and/or inquired into the results of theinvestigation of the charges against him; and that the belated filing of his complaint partakes of a "fishing expedition."

On appeal, the NLRC affirmed the decision of the Labor Arbiter. The Court of Appeals (CA)however, reversed the decision of NLRC holding that Potongan was denied due process and wasdismissed without cause.

ISSUE:

Whether or not the dismissal of Potongan was a valid exercise of management prerogatives

HELD:

The Supreme Court recognizes that management has wide latitude to regulate, according to itsown discretion and judgment, all aspects of employment, including the freedom to transfer and reassignemployees according to the requirements of its business. The scope and limits of the exercise of management prerogatives, must, however, be balanced against the security of tenure given to labor.

If exercised in good faith for the purpose of advancing business interests, not of defeating orcircumventing the rights of employees, the managerial prerogative to transfer personnel from one area of

operation to another is justified.

The Supreme Court finds it difficult, however, to attribute good faith on the part of Dynamic.Potongan was instructed to go on indefinite leave. He was asked to return to work only after more thanthree years from the time he was instructed to go on indefinite leave during which period his salaries

were withheld, and only after the NLRC promulgated its decision of May 21, 1998 reversing the laborarbiters dismissal of his complaint.


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ARNULFO O. ENDICO v. QUANTUM DISTRIBUTION CENTER 577 SCRA 299 (2009), FIRST DIVISION (Carpio Morales, J .)

The right of employees to security of tenure does not give them vested rights to their positions to the edepriving management of its prerogative to change their assignments or to transfer them.

Quantum Foods Center hired Arnulfo O. Endico (Endico) as Field Supervisor of Davao City.He was later on transferred in Cebu. Due to Endico s achievements and contributions to QuantumFoods, he was promoted as Area Manager of Cebu. However, after fruitful years of employment,Quantum Foods was adversely affected by economic slowdown, which compelled it to streamline itsoperations through the reduction of the companys contractual merchandisers to save on operation cost.

Thereafter, for some misfortunate events, Endico was immediately relieved from service. Endicothereafter filed a complaint for constructive illegal dismissal.

The Labor Arbiter rendered a decision in Endicos favor. Quantum Foods appealed to theNational Labor Relation

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