labor standards 2nd batch case digests

8/17/2019 LABOR STANDARDS 2nd Batch Case Digests

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LABOR STANDARDS CASE DIGESTS BATCH 2

BARTOLOME-CANONIZADO-CORDON-SIMBULAN

CASE NO.1LVN PICTURES, INC. vs. PHILIPPINE MUSICIANS Guild (FFW) & COURT

OFINDUSTRIALRELATIONS ; SAMPAGUITA PICTURES, INC. vs. PHILIPPINEMUSICIANS Guild (FFW) & COURT OFINDUSTRIALRELATIONS

FACTS:

Respondent Philippine Musicians Guild (FFW) is a duly registered legitimate labor organization. LVNPictures, Inc., Sampaguita Pictures, Inc., and PremiereProductions, Inc. are corporations, dulyorganized under the Philippine laws,engaged in the making of motion pictures and in the processingand distributionthereof. Petitioner companies employ musicians for the purpose of makingmusicrecordings for title music, background music, musical numbers, finale music andother incidentamusic, without which a motion picture is incomplete. Ninety-five(95%) percent of all the musiciansplaying for the musical recordings of saidcompanies are members of the Guild. The Guild has noknowledge of the existence of any other legitimate labororganization representing musicians in saidcompanies. Premised upon theseallegations, the Guild prayed that it be certified as the sole and

exclusive bargainingagency for all musicians working in the aforementioned companies. Intheirrespective answers, the latter denied that they have any musicians as employees,and allegedthat the musical numbers in the filing of the companies are furnishedby independent contractors. Thelower court sustained the Guild’s theory. Areconsideration of the order complained of having beendenied by the Court enbanc,LVN Pictures, inc., and Sampaguita Pictures, Inc., filed these petitionsforreview for certiorari.

ISSUE: Whether the musicians in question(Guild members) are “employees “of thepetitioner filmcompanies.

RULING:

YES The Court agreed with the lower court’s decision, to wit:

Lower court resorted to apply R.A. 875 and US Laws and jurisprudence from whichsaid Act waspatterned after. (Since statutes are to be construed in the light of purposes achieved and the evilssought to be remedied). It ruled that the work of the musical director and musicians is a functional andintegral part of the enterpriseperformed at the same studio substantially under the direction andcontrol of thecompany.

In other words, to determine whether a person who performs work for another isthe latter's employeeor an independent contractor, the National Labor Relations relies on 'the right to control' test . Under

this test an employer-employee relationship exist where the person for whom the services areperformed reservesthe right to control not only the end to be achieved, but also the manner andmeans to be used in reaching the end. (Alabama Highway Express Co. vs Local)

Notwithstanding that the employees are called independent contractors', the Board will hold them tobe employees under the Act where the extent of the employer'scontrol over them indicates that therelationship is in reality one of employment.(John Hancock Insurance Co., 2375-D, 1940, Teller,Labor Dispute CollectiveBargaining, Vol.).


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The right of control of the film company over the musicians is shown (1) by callingthe musiciansthrough 'call slips' in 'the name of the company; (2) by arrangingschedules in its studio for recordingsessions; (3) by furnishing transportation andmeals to musicians; and(4) by supervising and directingin detail, through themotion picture director, the performance of the musicians before the camera,inorder to suit the music they are playing to the picture which is being flashed on thescreen. The“musical directors” have no such control over the musicians involved in thepresent case. Said musicadirectors control neither the music to be played, nor themusicians playing it. The Premier Production

did not appeal the decision of theCourt en banc (that’s why it’s not one of the petitioners in the case)film companiessummon the musicians to work, through the musical directors. The filmcompanies,through the musical directors, fix the date, the time and the place of work. Thefilmcompanies, not the musical directors, provide the transportation to and from thestudio. The filmcompanies furnish meal at dinner time. It is well settled that "anemployer-employee relationship exists. . .where the person for whom the services are performed reserves a right to control not only the endto be achieved but alsothe means to be used in reaching such end . . . ."

The decisive nature of said control over the "means to be used", is illustrated in thecase of GilchristTimber Co., et al., in which, by reason of said control, the employer-employee relationship was heldto exist between the management and the workers,notwithstanding the intervention of an alleged

independent contractor, who had,and exercise, the power to hire and fire said workers. Theaforementioned control over the means to be used" in reading the desired endis possessed andexercised by the film companies over the musicians in the cases before us.

CASE No. 2Dy Keh Beng vs International Labor and Marine Union of the Philippines, Et Al.

No. L-32245 May 25, 1979

FACTS:

A charge of unfair labor practice was filed against Petitioner, proprietor of a basket factory fordiscriminatory acts in dismissing Carlos Solano and Ricardo Tudla for their union activities. AfterPreliminary investigation, a case was filed in the Court of industrial relations(CIR). Petitioner contendsthat he did not know Solano and that Tudla was not an employee because the latter came only whenthere was work for which he did on pakiaw basis, each piece of work being done under a separatecontract.

The CIR found that there existed an employer-employee relationship.

Petitioner claims that the private respondents did not meet the control test in relation to the defeinitionof an employer/employee because there was no evidence to show that petitioner had the right to

direct the manner and method of respondent’s work.

ISSUE: Whether there was an employer-employee relationship between petitioner and privaterespondents.

RULING:

Yes there was an employer-employee relationship between petitioners and private respondents. Itshould be borne in mind that the control test calls merely for the exercise of the right to control themanner of doing this work, not the actual exercise of the right. Considering the finding that Dy isengaged in the manufacture of baskets, it is natural to expect that those working under Dy would


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have to observe, among others, Dy’s requirements of size and quality of the basket. Some controwould necessarily be exercised by Dy as the making of the Kaing would be subject to Dy’sspecifications.Parenthetically, since the work on the baskets is done at Dy’s establishments, it can beinferred that the proprietor Dy could easily exercise control on the men he employed.

As to the contention that Solano was not an employee because he worked on piece basis, The Courtagrees with the Hearing Examiner that: circumstances must be construed to determine indeed ifpayment by the piece is just a method of compensation and does not define the essence of therelation.

Justice Perfecto in a SC decision opined that “judicial notice of the fact that the so-called pakyawsystem mentioned in this case as generally practiced in our country, is, in fact, a labor contractbetween employers and employees, between capitalists and laborers.” Thus, petiiton is denied.

CASE NO. 3Corporal Sr. vs NLRC

GR NO 129315 October 2, 2000

FACTS:

The 5 male petitioners worked as barbers while the 2 female petitioners worked as manicurists in theNew Look Barber Shop located in Quiapo. The shop is owned by private respondent, Lao Enteng Co.

Petitioners claim that at the beginning of their employment with the barber shop, it was just a singleproprietorship. But in January 1982, Vicente Lao organized a corporation registered with SEC. All theequipments, assets and properties of the shop was transferred to the corporation. They continuedworking in the said company until April 15,1995 when respondent Trinidad Ong, President of thecorporation, informed them that their services were no longer needed because the building where the

shop was located was already sold.

Petitioners then filed with NLRC, a complaint for illegal dismissal, illegal deduction, separation pay,non-payment of 13th month pay and slaay differentials.

Private respondents claimed that the petitioners were joint venture partners and were receiving 50%commission of the amount charged to customers. Thus, there was no employer-employeerelationship between them and petiitoners. And that assuming arguendo that there was suchrelationship, petitioners are not entitled to separation pay because the cessation of operations wasdue to serious business losses.

ISSUE: Was there an employer-employee relationship between the petitioners and privaterespondent corporation?

RULING: Yes, there was an employer-employee relationship between petitioners and privaterespondent.

The following must be present for an E-E relationship to exist:

a. the selection and engagement of the workersb. power of dismissal


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c. payment of wages by whatever meansd. power to control the worker’s conduct, with the latter assuming primacy in the overal

consideration.Records show that VIcente Lao engaged the services of the petitioners to work as barbers andmanicurists in the New Look Barber Shop, which was then a single proprietorship. When therespondent company took over, it continued the business and retained the services of all thepetitioners. Thus, the first 3 elements are present.

With respect to the 4th, the power to control refers to the existence of the power and not necessarilythe actual exercise thereof, nor is it eseential for the employer to actually supervise the performanceof duties of the employee. It is enough that employer has the right to wield that power.

The ff facts reveal that respondent company wielded control over the work performance of thepetitioners:

a. they worked in the shop owned and operated by respondentsb. they were required to report daily and observe definite number of hours of workc. they were not free to accept other employment elsehwere but devoted their full time working

with the shop for 15 yearsd. that petitioner Nas was tasked to watch over the other petitioners in their daily task.

Clearly, respondent was clothed with the power to dismiss any or all of them for just and valid cause.They were unarguably performing work necessary and desirable in the business of respondentcompany.

Thus, being employees of respondent company, the petitioners are entitled to the benefits providedunder the Labor Code.

CASE NO. 4

Alejandro Maraguinot, Jr. vs NLRC 2nd DivisionGR NO 120969 January 22, 1998

FACTS:

Petitioner maintains that he was employed by respondents as part of the filming crew. He waslaterpromoted as an electrician. Petitioners’ tasks contained of loading movie equipment in theshoothing area.Petitioners sought the assistance of their supervisor, Cesario, to facilitate their requestthat respondents adjusttheir salary in accordance with the minimum wage law. Mrs. Cesario informedpetitioners that del Rosario wouldagree to increase their salary only if they signed a blankemployment contract.

As petitioner refused to sign,respondents forced Enero (the other petitioner who worked as a crewmember) to go on leave. However, when he reported to work, respondent refused to take him backMaraguinot was dropped from the company payroll butwhen he returned, he was again asked to signa blank employment contract, and when he still refused,respondent’s terminated his services.

Petitioners thus sued for illegal dismissal.Private respondents assert that they contract persons calledproducers to produce or make movies forprivate respondents and contend that petitioners are projectemployees of the associate producers, who act asindependent contractors. Thus, there is no ER-EErelationship. However, petitioners cited that their performance of activities is necessary in the usualtrade or business of respondents and their work in continuous.


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ISSUE: Was there an Employer-employee relationship?

RULING:

With regards to VIVA’s contention that it does not make movies but merely distributes motionpictures,there is no sufficient proof to prove this contention.In respect to respondents’ allegation thatpetitioners are project employees, it is a settled rule that thecontracting out of labor is allowed only incase of job contracting. However, assuming that the associate producersare job contactors, theymust then be engaged in the business of making motion pictures. Associate producersmust havetools necessary to make motion pictures. However, the associate producers in this case have none ofthese. The movie-making equipment are supplied to the producers and owned by VIVA. Thus, it isclear that the associate producer merely leases the equipment from VIVA.In addition, the associateproducers of VIVA cannot be considered labor-only contractors as they did notsupply, recruit nor hirethe workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited crew members. Thusthe relationship between VIVA and its producers or associate producers seems to be that of agency.

With regards to the issue of illegal dismissal, petitioners assert that they were regular employees whowereillegally dismissed. Petitioners in this case had already attained the status of regular employeesin view of VIVA’sconduct. Thus, petitioners are entitled to back wages.A project employee or amember of a work pool may acquire the status of a regular employee when: a.there is a continuousrehiring of project employees even after a cessation of projectb.the tasks performed by the allegedproject employee are vital and necessary to the business of employer The tasks of petitioners inloading movie equipment and returning it to VIVA’s warehouse and fixing thelighting system werevital, necessary and indispensable to the usual business or trade of the employer.

CASE NO. 5WPP MARKETING COMMUNICATIONS, INC. v. GALERA

G.R. No. 169207; March 25, 2010Carpio, Acting C.J.

FACTS: The case is a consolidation of cases springing from petitioner's WPP MarketingCommunications alleged termination of private respondent Jocelyn Galera. Galera is an Americancitizen who was recruited from the United States of America by private respondent John Steedman,

chairman of petitioner company, to work in the Philippines.

Employment of Galera with petitioner WPP became effective on September 1, 1999 solely on theinstruction of the CEO and upon signing of the contract, without any further action from the Board ofDirectors of private respondent WPP.

Four months had passed when private respondent WPP filed before the Bureau of Immigration anapplication for Galera to receive a working visa, wherein she was designated as Vice President ofWPP.Galera alleged that she was constrained to sign the application in order that she could remain in thePhilippines and retain her employment.


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On December 14, 2000, Galera alleged she was verbally notified by Steedman that her services hadbeen terminated from private respondent WPP. A termination letter followed the next day. Thus, acomplaint for illegal dismissal was filed against WPP.

The Labor Arbiter Edgardo Madriaga held that petitioner was liable for illegal dismissal and damages.The Arbiter stated that Galera was not only illegally dismissed but was also not accorded due

process. The NLRC reversed the LA decision.

On appeal, the CA sided with Galera and reversed the NLRC decision. Hence, the petition.

ISSUES:1. Whether or not Galera is an employee of WPP.2. Whether or not Galera was illegally dismissed.2. Whether or not unpaid wages should be made to Galera.

RULING: Court partially grants WPP's petition to not pay Galera backwages.

HELD:1. On the first issue, the Court ruled in the AFFIRMATIVE. Applying the four-fold test, the Court ruledthat Galera is an employee not a corporate officer because Sections 1 and 4 of the employmentcontract mandate where and how often she is to perform her work; sections 3, 5, 6 and 7 show thatwages she receives are completely controlled by x x x WPP; and sections 10 and 11 clearly state thatshe is subject to the regular disciplinary procedures of x x x WPP.

Another indicator that she was a regular employee and not a corporate officer is Section 14 of thecontract, which clearly states that she is a permanent employee not a Vice-President or a member ofthe Board of Directors.

2. As to the second issue, the Court ruled in the affirmative: Galera was ILLEGALLY DISMISSED.WPPs dismissal of Galera lacked both substantive and procedural due process.

WPP failed to prove any just or authorized cause for Galera’s dismissal. Steedman's letter to Galerareads: I believe your priorities are mismanaged. The recent situation where you felt an internalstrategy meeting was more important than a new business pitch is a good example. You failed to leadand advise on the two new business pitches. The quality output is still not to an acceptable standard,which was also part of my directive that you needed to focus on back in July .

The law requires that the employer must furnish the worker sought to be dismissed with two writtennotices before termination of employment can be legally effected: (1) notice which apprises the

employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequentnotice which informs the employee of the employer’s decision to dismiss him. Failure to comply withthe requirements taints the dismissal with illegality. WPPs acts clearly show that Galera’s dismissaldid not comply with the two-notice rule.

3. As to the third issue, the Court ruled in the NEGATIVE. Galera is not entitled to backwagesbecause she is an alien. Galera worked in the Philippines without a proper work permit but now wantsto claim employee’s benefits under Philippine labor laws.


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Employment of Galera with petitioner WPP became effective on September 1, 1999 solely on theinstruction of the CEO and upon signing of the contract, without any further action from the Board ofDirectors of private respondent WPP.

Four months had passed when private respondent WPP filed before the Bureau of Immigration anapplication for Galera to receive a working visa, wherein she was designated as Vice President ofWPP.

The law and the rules are consistent in stating that the employment permit must be acquired prior toemployment. The Labor Code states: "Any alien seeking admission to the Philippines for employmentpurposes and any domestic or foreign employer who desires to engage an alien for employment inthe Philippines shall obtain an employment permit from the Department of Labor."

Galera cannot come to this Court with unclean hands. To grant Galera's prayer is to sanction theviolation of the Philippine labor laws requiring aliens to secure work permits before their employment.

CASE NO.6PHILIPPINE BANK OF COMMUNICATIONS v. NATIONAL LABOR RELATIONS COMMISSION

G.R. No. L-66598; December 19, 1986Feliciano, J.

FACTS: Petitioner Philippine Bank of Communications (PBCom) and Corporate Executive SearchInc. (CESI) entered into a letter agreement wherein CESI will provide “Temporary Services” topetitioner. Attached to the letter was a list of messengers, assigned to work with the petitioner,including private respondent Ricardo Orpiada. Orpiada rendered services within the premises of thebank June 25, 1975. On October 1976, petitioner PBCom requested CESI to withdraw Orpiada’sassignment because Orpiada’s services were no longer needed. Thus, Orpiada filed a complaintagainst petitioner for illegal dismissal and failure to pay 13 th-month pay.

Labor Arbiter Teodorico Dogelio ruled in favor of Orpiada and asked PBCom to reinstate him. Suchfinding was also made by respondent National Labor Relations Commission on appeal by PBCom.Hence, the petition.

ISSUE:Whether or not CESI is a mere labor-only contractor, making petitioner PBCom the employer ofOrpiada.

RULING: Supreme Court denied the petition of PBCom and found that it is the employer of Orpiada.

HELD:The Court ruled in the AFFIRMATIVE. CESI is a mere labor-only contractor. Hence, PBCom is thedirect employer of Orpiada because CESI is a mere intermediary of PBCom in the hiring process ofOrpiada as messenger.

Job contracting v Labor-only contracting: CESI is a labor-only contractor which is prohibitedby law


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PBCom and CESI argued that CESI is not properly regarded as a "labor-only" contractor upon theground that CESI is possessed of substantial capital or investment in the form of office equipment,tools and trained service personnel. We are unable to agree with the bank and CESI on this score.

In the present case, the letter-undertaking between PBCom and CESI was to provide the bank with acertain number of persons able to carry out the work of messengers. Such undertaking of CESI wascomplied with when the requisite number of persons were assigned or seconded to the petitioner

bank.

Both PBCom and CESI argued that “there is, of course, nothing illegal about hiring persons to carryout a specific project or undertaking the completion or termination of which [was] determined at thetime of the engagement of [the] employee, or where the work or service to be performed is seasonalin nature and the employment is for the duration of the season.”

Under the Labor Code, any employee who has rendered at least one year of service, whether suchservice is continuous or not, shall be considered a regular employee (Article 281, Second paragraph).

Assuming, therefore, that Orpiada could properly be regarded as a casual (as distinguished from aregular) employee of the bank, he became entitled to be regarded as a regular employee of the

bank as soon as he had completed one year of service to the bank.

We hold that CESI was engaged in "labor-only" or attracting vis-a-vis the petitioner and in respect toRicardo Orpiada, and that consequently, the petitioner bank is liable to Orpiada as if Orpiada hadbeen directly, employed not only by CESI but also by the bank. It may well be that the bank may inturn proceed against CESI to obtain reimbursement of, or some contribution to, the amounts whichthe bank will have to pay to Orpiada; but this it is not necessary to determine here.

Succinctly put, CESI is not a parcel delivery company as its name indicates. It is a recruitment andplacement corporation placing bodies, as it were, in different client companies for longer or shorterperiods of time. The Court ruled that CESI is a labor-only contractor and as such, PBCom is, by law,

the employer of Orpiada as provided for in Art. 106 of the Labor Code.

CASE NO. 7NERI and CABELIN v. NATIONAL LABOR RELATIONS COMMISSION

G.R. Nos. 97008-09; July 23, 1993Bellosillo, J.

FACTS: Petitioners Virginia Neri and Jose Cabelin instituted complaints against private respondentsFar East Bank & Trust Company (FEBTC) and Building Care Corp. (BCC). This is to compel FEBTCto accept them as regular employees and for it to pay the differential between the wages being paid

them by BCC and those received by the bank’s employees with similar length of service.

Petitioners contended that BCC in engaged in labor-only contracting because it failed to adduceevidence purporting to show that it invested in the form of tools, equipment, machineries, workpremises and other materials which are necessary in theconduct of its business. Moreover,petitioners argue that they perform duties which are directly related to the principal business oroperation of FEBTC.


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The Labor Arbiter dismissed the case for lack of merit, as it was shown that BCC was the employer ofpetitioners. BCC has sufficient capital to pass as an independent contractor. The same findings wasarrived at by respondent National Labor Relations Commission. Hence, the petition.

ISSUE: Whether or not BCC is engaged in a labor-only contracting in employing Neri and Cabelin.

RULING: Supreme Court dismissed the petition of Neri and Cabelin, and found that BCC is their

employer; not the bank.

HELD:The Supreme Court ruled in the NEGATIVE. BCC is an independent contractor; not a labor-onlycontractor.

Preliminarily, the Court said held that there is "labor-only" contracting where: (a) the person supplyingworkers to an employer does not have substantial capital or investment in the form of tools,equipment, machineries, work premises, among others; and, (b) the workers recruited and placed bysuch person are performing activities which are directly related to the principal business of theemployer.

BCC cannot be considered a "labor-only" contractor because it has substantial capital. While theremay be no evidence that it has investment in the form of tools, equipment, machineries, workpremises, among others, it is enough that it has substantial capital. The law does not require bothsubstantial capital and investment in the form of tools, equipment, machineries, etc. This is clear fromthe use of the conjunction "or". If the intention was to require the contractor to prove that he hasboth capital and the requisite investment, then the conjunction "and" should have been used. But,having established that it has substantial capital, it was no longer necessary for BCC to furtheradduce evidence to prove that it does not fall within the purview of "labor-only" contracting. There iseven no need for it to refute petitioners' contention that the activities they perform are directly relatedto the principal business of respondent bank.

Secondarily, under the "right of control" test they must still be considered employees of BCC. Acursory reading of the job description of Neri shows that what was sought to be controlled by FEBTCwas actually the end-result of the task, e.g., that the daily incoming and outgoing telegraphic transferof funds received and relayed by her, respectively, tallies with that of the register. The guidelines were laid down merely to ensure that the desired end-result was achieved. It did not, however, tellNeri how the radio/telex machine should be operated.

Petitioners do not deny that they were selected and hired by BCC before being assigned to work inthe Cagayan de Oro Branch of FFBTC. BCC likewise acknowledges that petitioners are itsemployees. The record is replete with evidence disclosing that BCC maintained supervision and

control over petitioners through its Housekeeping and Special Services Division: petitionersreported for work wearing the prescribed uniform of BCC; leaves of absence were fileddirectly with BCC; and, salaries were drawn only from BCC.

Neri even secured a certification from BCC that she was employed by the latter. Meanwhile,Cabelin filed a complaint for underpayment of wages, non-integration of salary adjustments as wellas for illegal deduction against BCC alone.

Also, BCC alone had the power to reassign petitioners. Their deployment to FEBTC was not subjectto the bank's acceptance. BCC was to be paid in lump sum unlike in the PBCom case where the


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contractor CESI was to be paid at a daily rate on a per person basis. Lastly, Neri and Cabelin were toperform specific special services. Petitioners cannot be held to be employees of FEBTC as BCC"carries an independent business" and undertaken the performance of its contract withvarious clients according to its "own manner and method, free from the control and supervision"of its principals in all matters "except as to the results thereof."

Contrast PBCom case and Neri case

In PBCom case, CESI was a "labor-only" contractor because upholding the contract between thecontractor and the bank would in effect permit employers to avoid the necessity of hiring regular orpermanent employees and would enable them to keep their employees indefinitely on a temporary orcasual basis, thus denying them security of tenure in their jobs. This of course violates the LaborCode. In the Neri case, BCC has not committed any violation.

In PBCom case, it is for illegal dismissal; the Neri case, on the other hand, is for conversion ofemployment status so that petitioners can receive the same salary being given to regular employeesof FEBTC. But, as herein determined, petitioners are not regular employees of FEBTC but of BCC.

CASE NO. 8PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY v. NATIONAL LABOR RELATIONS

COMMISSIONG.R. No. 118978; May 23, 1997

Regalado, J.

FACTS: Petitioner Philippine Telegraph & Telephone Co. (PT&T) initially hired Grace de Guzmanspecifically as “Supernumerary Project Worker”, for a fixed period from November 21, 1990 until April20, 1991 as reliever. She was again invited for employment as replacement from June 10, 1991 toJuly 1, 1991 and July 19, 1991 to August 8, 1991.

On September 2, 1991, de Guzman was again asked to join PT&T as a probationary employee whereprobationary period will cover 150 days. She indicated in the portion of the job application form undercivil status that she was single although she had contracted marriage a few months earlier. Whenpetitioner learned later about the marriage, its branch supervisor, Delia Oficial, sent de Guzman amemorandum requiring her to explain the discrepancy. Included in the memorandum, was areminder about the company’s policy of not accepting married women for employment. She wasdismissed from the company on January 29, 1992.

Labor Arbiter handed down decision on November 23, 1993 declaring that petitioner illegallydismissed De Guzman, who had already gained the status of a regular employee. RespondentNational Labor Relations Commission (NLRC) upheld such ruling but provided a three-month

suspension against de Guzman for dishonesty which it did not condone. Hence, the petition.

ISSUE: Whether the alleged concealment of civil status can be grounds to terminate the services ofan employee.

RULING: Supreme Court dismissed the petition of PT&T, but upheld the three-month suspensionagainst de Guzman


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HELD:

Article 136 (now Art. 134) of the Labor Code, one of the protective laws for women, explicitly prohibitsdiscrimination merely by reason of marriage of a female employee. It is recognized that company isfree to regulate manpower and employment from hiring to firing, according to their discretion and bestbusiness judgment, except in those cases of unlawful discrimination or those provided by law.

PT&T’s policy of not accepting or disqualifying from work any woman worker who contracts marriage

is afoul of the right against discrimination provided to all women workers by our labor laws and by ourConstitution. The record discloses clearly that de Guzman’s ties with PT&T were dissolved principallybecause of the company’s policy that married women are not qualified for employment in thecompany, and not merely because of her supposed acts of dishonesty.

The government abhors any stipulation or policy in the nature adopted by PT&T. The Labor Codeprovides that it is unlawful for a woman to “not get married, or to stipulate expressly or tacitly thatupon getting married, a woman employee shall be deemed resigned or separated, or to actuallydismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason ofmarriage.”

The policy of PT&T is in derogation of the provisions stated in Art.134 of the Labor Code on the rightof a woman to be free from any kind of stipulation against marriage in connection with heremployment and it likewise is contrary to good morals and public policy, depriving a woman of herfreedom to choose her status, a privilege that is inherent in an individual as an intangible andinalienable right. Such policy must be prohibited in all its indirect, disguised or dissembled forms asdiscriminatory conduct derogatory of the laws of the land not only for order but also imperativelyrequired.

Verily, private respondent’s act of concealing the true nature of her status from PT&T could not beproperly characterized as willful or in bad faith as she was moved to act the way she did mainlybecause she wanted to retain a permanent job in a stable company. In other words, she was

practically forced by that very same illegal company policy into misrepresenting her civil status forfear of being disqualified from work.

CASE NO. 9APEX MINING COMPANY, INC., petitioner,

vs.NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO, respondents.

G.R. No. 94951 April 22, 1991

FACTS:

Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May18, 1973 to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. Inthe beginning, she was paid on a piece rate basis. However, on January 17, 1982, she was paid on amonthly basis at P250.00 a month which was ultimately increased to P575.00 a month.

On December 18, 1987, while she was attending to her assigned task and she was hanging herlaundry, she accidentally slipped and hit her back on a stone. She reported the accident to herimmediate supervisor Mila de la Rosa and to the personnel officer, Florendo D. Asirit. As a result ofthe accident she was not able to continue with her work. She was permitted to go on leave for


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medication. De la Rosa offered her the amount of P 2,000.00 which was eventually increased toP5,000.00 to persuade her to quit her job, but she refused the offer and preferred to return to work.Petitioner did not allow her to return to work and dismissed her on February 4, 1988.

On March 11, 1988, private respondent filed a request for assistance with the Department of Laborand Employment. After the parties submitted their position papers as required by the labor arbiterassigned to the case on August 24, 1988 the latter rendered a decision, ordering the respondent

Apex Mining Company, Inc., to pay the complainant a total amount of P55,161.42.

Not satisfied therewith, petitioner appealed to NLRC. NLRC dismissed the appeal for lack of meritand affirmed the appealed decision. A subsequent motion for reconsideration was likewise denied.

Hence, the herein petition for review by certiorari, with the main thrust that private respondent shouldbe treated as a mere househelper or domestic servant and not as a regular employee of petitioner.

ISSUE:

Whether or not the househelper in the staff houses of an industrial company a domestic helper or a

regular employee of the said firm.

HELD:

The petition is devoid of merit.

Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or"domestic servant" are defined as follows:

The term "househelper" as used herein is synonymous to the term "domestic servant" andshall refer to any person, whether male or female, who renders services in and about the

employer's home and which services are usually necessary or desirable for the maintenanceand enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of theemployer's family.

The foregoing definition covers family drivers, domestic servants, laundry women, yayas, gardeners,houseboys and other similar househelps. Hence, the definition cannot be interpreted to includehousehelp or laundrywomen working in staffhouses of a company, like petitioner who attends to theneeds of the company's guest and other persons availing of said facilities.

The criteria is the personal comfort and enjoyment of the family of the employer in the home of saidemployer. While it may be true that the nature of the work of a househelper, domestic servant or

laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in theircircumstances is that in the former instance they are actually serving the family while in the lattercase, whether it is a corporation or a single proprietorship engaged in business or industry or anyother agricultural or similar pursuit, service is being rendered in the staffhouses or within the premisesof the business of the employer. In such instance, they are employees of the company or employer inthe business concerned entitled to the privileges of a regular employee.

Private respondent Candida is therefore, entitled to appropriate relief as a regular employee ofpetitioner. Inasmuch as private respondent appears not to be interested in returning to her work forvalid reasons, the payment of separation pay to her is in order.


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WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of publicrespondent NLRC are hereby AFFIRMED. No pronouncement as to costs.

CASE NO. 10BRENT SCHOOL, INC.DIMACHE vs. RONALDO ZAMORA and DOROTEO R. ALEGRE

G.R. No. L-48494 February 5, 1990 en banc

FACTS

1. In virtue of an employment contract Doroteo R. Alegre was engaged as athletic director by BrentSchool, Inc. at a yearly compensation of P20,000 .00.

2. The contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the dateof execution of the agreement, to July 17,1976.

3. Subsequent subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14,1974 reiterated the same terms and conditions, including the expiry date, as those contained in theoriginal contract of July 18, 1971.

4. When the employment contract was signed between Brent School and Alegre (before the LaborCode was Passed) it was perfectly valid for them to enter into stipulations fixing the duration thereof.

5. Some three months before the expiration of the stipulated period, or more precisely on April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of Laboradvising of the termination of his services effective on July 16, 1976. The stated ground for thetermination was, "completion of contract, expiration of the definite period of employment."

6. However, at the investigation conducted by a Labor Conciliator of said report of termination of hisservices, Alegre protested the announced termination of his employment. He argued that although his

contract did stipulate that the same would terminate on July 17,1976, since his services werenecessary and desirable in the usual business of his employer, and his employment had lasted forfive years, he had acquired the status of a regular employee and could not be removed except forvalid cause.

ISSUE Whether or not Alegre was lawfully terminated and that he is entitled to reinstatement.

HELD NO. Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaustthe gamut of employment contracts to which the lack of a fixed period would be an anomaly, butwould also appear to restrict, without reasonable. distinctions, the right of an employee to freely

stipulate with his employer the duration of his engagement, it logically follows that such a literalinterpretation should be eschewed or avoided. The law must be given a reasonable interpretation, topreclude absurdity in its application. Outlawing the whole concept of term employment and subvertingto boot the principle of freedom of contract to remedy the evil of employers' using it as a means toprevent their employees from obtaining security of tenure is like cutting off the nose to spite the faceor, more relevantly, curing a headache by lopping off the head.

Article 280 does not proscribe or prohibit an employment contract with a fixed period, provided thesame is entered into by the parties without any force, duress or improper pressure being brought tobear upon the employee and absent any other circumstance vitiating consent. It does not necessarily


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follow that where the duties of the employee consist of activities usually necessary or desirable in theusual business of the employer, the parties are forbidden from agreeing on a period of time for theperformance of such activities. There is thus nothing essentially contradictory between a definiteperiod of employment and the nature of the employee’s duties

CASE NO. 11ZOSIMO CIELO, petitioner,

vs.THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, HENRY LEI and/or HENRY

LEI TRUCKING respondents.

FACTS1. Petitioner was engaged as a truck driver of private respondent Henry Lei Trucking Company

2. They entered into an agreement and it provides under paragraph 1 “That the term of this Agreement is six (6) months from and after the execution hereof, unless otherwise earlier terminatedat the option of either party. It also provides under paragraph 2 “that there is no employer/employeerelationship between the parties, the nature of this Agreement being contractual.

3. The agreement was supposed to have commenced on June 30 1984, and to end on December 31,1984.

4. On December 22, 1984: however, the petitioner was formally notified by the private respondent ofthe termination of his services on the ground of expiration of their contract.

5. Soon thereafter, on January 22, 1985, the petitioner filed his complaint with the Ministry of Laborand Employment.

6. The private respondent rests its case on the agreement and maintains that the labor laws are notapplicable because the relations of the parties are governed by their voluntary stipulations. Thecontract having expired, it was the prerogative of the trucking company to renew it or not as it saw fit.

ISSUE Whether or not the petitioner was a regular employee.

HELD

YES. The private respondent's intention is obvious. There is no question that the purpose behindthese individual contracts was to evade the application of the labor laws by making it appear that thedrivers of the trucking company were not its regular employees.

Under these arrangements, the private respondent hoped to be able to terminate the services of thedrivers without the inhibitions of the Labor Code. All it had to do was refuse to renew the agreements,which, significantly, were uniformly limited to a six-month period. No cause had to be establishedbecause such renewal was subject to the discretion of the parties. In fact, the private respondent didnot even have to wait for the expiration of the contract as it was there provided that it could be "earlierterminated at the option of either party." By this clever scheme, the private respondent could alsoprevent the drivers from becoming regular employees and thus be entitled to security of tenure andother benefits, such as a minimum wage, cost-of-living allowances, vacation and sick leaves, holidaypay, and other statutory requirements. The private respondent argues that there was nothing wrong


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with the affidavit because all the affiant acknowledged therein was full payment of the amount duehim under the agreement.

The petitioner was a regular employee of the private respondent. The private respondent is engagedin the trucking business as a hauler of cattle, crops and other cargo for the Philippine PackingCorporation. This business requires the services of drivers, and continuously because the work is notseasonal, nor is it limited to a single undertaking or operation. Even if ostensibly hired for a fixed

period, the petitioner should be considered a regular employee of the private respondent,conformably to the 1st paragraph of Article 280 of the Labor Code providing as follows:

Art. 280. Regular and Casual Employment. -The provision of written agreement to the contrarynotwithstanding and regardless: of the oral agreement of the parties, an employment shall be deemedto be regular where the employee has been engaged to perform activities which are usuallynecessary or desirable in the usual business or trade of the employer, except where the employmenthas been fixed for a specific project or undertaking the completion or termination of which has beendetermined at the time of the engagement of the employee or where the work or services to beperformed is seasonal in nature and the employment is for the duration of the season.

CASE NO. 12

PURE FOODS CORPORATON, petitioner ,

vs. NATIONAL LABOR RELATIONS COMMISSION, RODOLFO CORDOVA, VIOLETACRUSIS, ET AL.,* respondents.

FACTS:

The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation towork for a fixed period of five months at its tuna cannery plant in Tambler, General Santos City. After

the expiration of their respective contracts of employment in June and July 1991, their services wereterminated. They forthwith executed a Release and Quitclaim stating that they had no claimwhatsoever against the petitioner.

On 29 July 1991, the private respondents filed before the National Labor Relations Commission(NLRC) Sub-Regional Arbitration Branch No. XI, General Santos City, a complaint for illegal dismissaagainst the petitioner and its plant manager, Marciano Aganon. [1]

On 23 December 1992, Labor Arbiter Arturo P. Aponesto handed down a decision [2] dismissingthe complaint on the ground that the private respondents were mere contractual workers, and notregular employees; hence, they could not avail of the law on security of tenure. The termination oftheir services by reason of the expiration of their contracts of employment was, therefore, justified.

Besides, by executing a Release and Quitclaim, the private respondents had waived andrelinquished whatever right they might have against the petitioner.

ISSUE: whether employees hired for a definite period and whose services are necessary anddesirable in the usual business or trade of the employer are regular employees.

HELD:


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the two kinds of regular employees are (1) those who are engaged to perform activities whichare necessary or desirable in the usual business or trade of the employer; and (2) those casuaemployees who have rendered at least one year of service, whether continuous or broken, withrespect to the activity in which they are employed.[6]

In the instant case, the private respondents activities consisted in the receiving, skinning, loiningpacking, and casing-up of tuna fish which were then exported by the petitioner. Indisputably, they

were performing activities which were necessary and desirable in petitioners business or trade.Contrary to petitioner's submission, the private respondents could not be regarded as having

been hired for a specific project or undertaking. The term specific project or undertaking under Article280 of the Labor Code contemplates an activity which is not commonly or habitually performed orsuch type of work which is not done on a daily basis but only for a specific duration of time or untilcompletion; the services employed are then necessary and desirable in the employers usual businessonly for the period of time it takes to complete the project.[7]

This Court has upheld the legality of fixed-term employment. It ruled that the decisivedeterminant in term employment should not be the activities that the employee is called upon toperform but the day certain agreed upon by the parties for the commencement and termination of

their employment relationship.This scheme of the petitioner was apparently designed to prevent the private respondents and

the other casual employees from attaining the status of a regular employee. It was a clearcircumvention of the employees right to security of tenure and to other benefits like minimum wage,cost-of-living allowance, sick leave, holiday pay, and 13th month pay. [11] Indeed, the petitionersucceeded in evading the application of labor laws. Also, it saved itself from the trouble or burden ofestablishing a just cause for terminating employees by the simple expedient of refusing to renew theemployment contracts.

The five-month period specified in private respondents employment contracts having beenimposed precisely to circumvent the constitutional guarantee on security of tenure should, therefore,

be struck down or disregarded as contrary to public policy or morals.[12]

The execution by the private respondents of a Release and Quitclaim did not preclude them from

questioning the termination of their services. Generally, quitclaims by laborers are frowned upon ascontrary to public policy and are held to be ineffective to bar recovery for the full measure of theworkers rights. [14] The reason for the rule is that the employer and the employee do not stand on thesame footing.[15]

The NLRC was, thus, correct in finding that the private respondents were regular employees andthat they were illegally dismissed from their jobs. They are entitled reinstatement without loss ofseniority rights and other privileges, with full back wages computed from the time of dismissal up tothe time of actual reinstatement, without deducting the earnings derived elsewhere pending the

resolution of the case.However, since reinstatement is no longer possible because the petitioner's tuna cannery plant

had, admittedly, been closed in November 1994,[18] the proper award is separation pay equivalent toone month pay or one-half month pay for every year of service, whichever is higher, to be computedfrom the commencement of their employment up to the closure of the tuna cannery plant. The amountof back wages must be computed from the time the private respondents were dismissed until the timepetitioner's cannery plant ceased operation.[19]


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CASE NO. 13JOAQUIN T. SERVIDAD, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,

INNODATA PHILIPPINES, INC./ INNODATA CORPORATION, TODD SOLOMON, respondents.

1998 March 18, GR No 128682

Facts: Servidad was employed on 9 May 1994 by respondent INNODATA as Data Control Clerk,under a contract of employment. Section 2 of such contract states: “This Contract shall be effectivefor a period of one (1) year commencing on 10 May1994 until 10 May 1995 unless sooner terminatedpursuant to the provisions hereof.”

Petitioner was a contractual employee for six months or from the period of May 10, 1994 toNovember 10, 1994 during which, the employer can terminate with due notice. The contract also

states that should the employee continue his employment beyond the 6-month period, he shallbecome a regular employee upon demonstration of sufficient skill. On November 9, 1995 or one daybefore his contractual terms ends, he was made to sign a three-month probationary employment andlater, an extended three-month employment good until 9 May 1995.Petitioner was terminated on May9, 1995 and filed an illegal dismissal complaint before the Labor Arbiter.

The Labor Arbiter found the respondent INNODATA guilty of the charge and was ordered to paybackwages and reinstatement of petitioner. On appeal thereto by INNODATA, the NLRC reversed thedecision declaring that the contract between petitioner and private complainant was for a fixed termand the dismissal, at the end of one year, was valid.

Issue: WON the contract entered into by the petitioner and respondent is valid and enforceable.

Held: NO.

The NLRC found that the contract in question is for a fixed term. The said contract provides for twoperiods. The first period was for six months terminable at the option of private respondent, while thesecond period was also for six months but probationary in character. In both cases, the privaterespondent did not specify the criteria for the termination or retention of the services of petitioner. It isviolative of the right of the employee against unwarranted dismissal. By the provisions of the verycontract itself, petitioner has become a regular employee of private respondent.

As to the private respondent statement that the one-year period stipulated in subject contract was toenable petitioner to acquire the skill necessary for the job. In effect, what respondent employertheorized upon is that the one-year term of employment is probationary. If the nature of the job didactually necessitate at least one year for the employee to acquire the requisite training andexperience, the same could not be a valid probationary employment as it falls short of therequirement of Article 281[10] of the Labor Code. It was not brought to light that the petitioner wasduly informed at the start of his employment, of the reasonable standards under which he couldqualify as a regular employee.


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WHEREFORE, the petition is GRANTED, the questioned decision of NLRC is SET ASIDE, and thedecision of the Labor Arbiter, dated August 20, 1996, in NLRC-NCR-00-055-03471-95 REINSTATEDwith the modification that the award of backwages be computed from the time of the dismissal ofpetitioner to his actual or payroll reinstatement. Costs against the private respondent.

CASE NO. 14Joeb Aliviado, et al. vs. Procter & Gamble Philippines, Inc., et al.

G.R. No. 160506, March 9, 2010Facts:Petitioners worked as merchandisers of Procter & Gamble Phils. Inc. (P&G). They all individually signedemployment contracts with either Promm-Gem, Inc. (Promm-Gem) or Sales and Promotions Services(SAPS). To enhance consumer awareness and acceptance of the products, P&G entered into contracts withPromm-Gem and SAPS for the promotion and merchandising of its products. In December 1991, petitionersfiled a complaint against P&G for regularization, service incentive leave pay and other benefits withdamages. The complaint was later amended to include the matter of their subsequent dismissal

The Labor Arbiter dismissed the complaint for lack of merit and ruled that there was no employer-employee relationship between petitioners and P&G. He found that the selection and engagement ofthe petitioners, the payment of their wages, the power of dismissal and control with respect to themeans and methods by which their work was accomplished, were all done and exercised by Promm-Gem/SAPS. He further found that Promm-Gem and SAPS were legitimate independent jobcontractors. On appeal to the NLRC, the NlRC affirmed the decision of the labor arbiter. Petitionersthen filed a petition for certiorari with the CA, alleging grave abuse of discretion amounting to lack orexcess of jurisdiction on the part of the Labor Arbiter and the NLRC. However, said petition was alsodenied by the CA.

Issues:1.) Is P&G the employer of petitioners?2.) Were petitioners illegally dismissed?

Held:1. No for the workers from Promm-Gem, Yes for the works from SAPS.

For In order to determine whether P&G is the employer of petitioners, it is necessary to firstdetermine whether Promm-Gem and SAPS are labor-only contractors or legitimate job contractors.“There is "labor-only" contracting where the person supplying workers to an employer does not havesubstantial capital or investment in the form of tools, equipment, machineries, work premises, amongothers, and the workers recruited and placed by such person are performing activities which aredirectly related to the principal business of such employer. In such cases, the person or intermediaryshall be considered merely as an agent of the employer who shall be responsible to the workers inthe same manner and extent as if the latter were directly employed by him.” (ART 106 Labor Code).

The Court held that Promm-Gem cannot be regarded as labor-only contractor but a legitimateindependent contractor because the financial statement of Promm-Gem shows that it has authorizedcapital stock of P1 million and a paid-in capital, or capital available for operations, of P500,000.00 asof 1990. It also has long term assets worth P432, 895.28 and current assets of P719, 042.32. Promm-Gem has also proven that it maintained its own warehouse and office space with a floor area of 870square meters. It also had under its name three registered vehicles which were used for itspromotional/merchandising business. Promm-Gem also has other clients aside from P&G.


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On the other hand, the Articles of Incorporation of SAPS shows that it has a paid-in capital of onlyP31, 250.00. There is no other evidence presented to show how much its working capital and assetsare. Furthermore, there is no showing of substantial investment in tools, equipment or other assets.Considering that SAPS has no substantial capital or investment and the workers it recruited areperforming activities which are directly related to the principal business of P&G, the court held thatSAPS is engaged in "labor-only contracting". The contractor is considered merely an agent of theprincipal employer and the latter is responsible to the employees of the labor-only contractor as if

such employees had been directly employed by the principal employer.

2. With regard to the termination letters given by Promm-Gem to its employees uniformly

specified the cause of dismissal as grave misconduct and breach of trust. The court held that

there were no valid causes for the dismissal of petitioners-employees of Promm-Gem.

Misconduct to be valid just cause for dismissal, such misconduct (a) must be serious; (b) must relateto the performance of the employee’s duties; and (c) must show that the employee has become unfitto continue working for the employer. In the case, petitioners-employees of Promm-Gem may havecommitted an error of judgment in claiming to be employees of P&G, but it cannot be said that theywere motivated by any wrongful intent in doing so. As such, they are guilty of only simple misconductfor assailing the integrity of Promm-Gem as a legitimate and independent promotion firm. Amisconduct which is not serious or grave, as that existing in the instant case, cannot be a valid basisfor dismissing an employee. Meanwhile, loss of trust and confidence, as a ground for dismissal,must be based on the willful breach of the trust reposed in the employee by his employer. Ordinarybreach will not suffice. Loss of trust and confidence, as a cause for termination of employment, ispremised on the fact that the employee concerned holds a position of responsibility or of trust andconfidence. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and must show that the employee is unfit to continue to work for the employer. In the case atbar, In the instant case, the petitioners-employees of Promm-Gem have not been shown to beoccupying positions of responsibility or of trust and confidence. Neither is there any evidence to showthat they are unfit to continue to work as merchandisers for Promm-Gem. Hence, no valid cause for

dismissal by Promm-Gem against petitioner-employees.

With regard to the petitioners placed with P&G by SAPS, they were given no written notice ofdismissal. The records show that upon receipt by SAPS of P&G’s letter terminating their"Merchandising Services Contact", they in turn verbally informed the concerned petitioners not toreport for work anymore. It must be emphasized that the onus probandi to prove the lawfulness of thedismissal rests with the employer. In termination cases, the burden of proof rests upon the employerto show that the dismissal is for just and valid cause. In the instant case, P&G failed to discharge theburden of proving the legality and validity of the dismissals of those petitioners who are considered itsemployees. Hence, the dismissals necessarily were not justified and are therefore illegal.The petition is granted and the decision of the CA is set aside.


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CASE NO. 15MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners,

vs.HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and

Employment judgment, and JOAQUIN A. DEQUILA, respondents.G.R. No. 74246 January 26, 1989

Facts:

Joaquin A. Dequila (or Dequilla) was hired on probation by Mariwasa Manufacturing, Inc. as a generautility worker on January 10, 1979. After 6 months, he was informed that his work was unsatisfactoryand had failed to meet the required standards. To give him another chance, and with Dequila’s writtenconsent, Mariwasa extended Dequila’s probationary period for another three months: from July 10 toOctober 9, 1979. Dequila’s performance, however, did not improve and Mariwasa terminated hisemployment at the end of the extended period.Dequila filed a complaint for illegal dismissal against Mariwasa and its VP for Administration, Angel T.Dazo, and violation of Presidential Decrees Nos. 928 and 1389.DIRECTOR OF MINISTRY OF LABOR: Complaint is dismissed. Termination is justified. ThusDequila appeals to the Minister of Labor.MINISTER OF LABOR: Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a

regular employee at the time of his dismissal, thus, he was illegally dismissed. (Initial orderReinstatement with full backwages. Later amended to direct payment of Dequila’s backwages fromthe date of his dismissal to December 20, 1982 only.)

Issue:WON employer and employee may, by agreement, extend the probationary period of employmentbeyond the six months prescribed in Art. 282 of the Labor Code?

Held:YES, agreements stipulating longer probationary periods may constitute lawful exceptions to thestatutory prescription limiting such periods to six months.

The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said that “Generally, the probationary periodof employment is limited to six (6) months. The exception to this general rule is when the parties to anemployment contract may agree otherwise, such as when the same is established by company policyor when the same is required by the nature of work to be performed by the employee. In the lattercase, there is recognition of the exercise of managerial prerogatives in requiring a longer period ofprobationary employment, such as in the present case where the probationary period was set foreighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employeemust learn a particular kind of work such as selling, or when the job requires certain qualificationsskills experience or training.”

In this case, the extension given to Dequila could not have been pre-arranged to avoid the legal

consequences of a probationary period satisfactorily completed. In fact, it was ex gratia, an act ofliberality on the part of his employer affording him a second chance to make good after having initiallyfailed to prove his worth as an employee. Such an act cannot now unjustly be turned against saidemployer’s account to compel it to keep on its payroll one who could not perform according to its workstandards.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived anybenefit attaching to the completion of said period if he still failed to make the grade during the periodof extension. By reasonably extending the period of probation, the questioned agreement actually


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improved the probationary employee’s prospects of demonstrating his fitness for regular employment.

Petition granted. Order of Deputy Minister Leogardo reversed.

CASE NO. 16 DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners,

vs. GLAXO WELLCOME PHILIPPINES, INC. respondentG.R. No.162994. September 17, 2004

Facts:Pedro A. Tecson was hired by Glaxo Wellcome Philippines, Inc.) as medical representative onOctober 1995,after Tecson had undergone training and orientation. Tecson signed a contract ofemployment whichstipulates, among others, that he agrees to study and abide by existing companyrules; to disclose tomanagement any existing or future relationship by consanguinity or affinity withco-employees or employees ofcompeting drug companies. The Employee Code of Conduct of Glaxosimilarly provides that if management perceives a conflict of interest or a potential conflict betweensuch relationship and the employee’s employment with the company, the management and theemployee will explore the possibility of a “transfer to another department in a non- countercheckingposition” or preparation for employment outside the company after six months.Tecson was initiallyassigned to market Glaxo’s products in the Camarines Sur -Camarines Norte salesarea.Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of AstraPharmaceuticals (Astra), a competitor of Glaxo. Bettsy was Astra’s Branch Coordinator in Albay.

Despite of warnings, Tecson married Bettsy. The superiors of Tecson reminded him of the companypolicy and suggested that either him o rBettsy shall resign from their respective companies. Tecsonrequested more time to resolve the issue. In November of 1999, Glaxo transferred Tecson toMindanao area involving the provinces of Butuan, Surigao andAgusan del Sur. Tecson did not agreeto the reassignment and referred this matter to the grievance committee.It was resolved and wassubmitted to voluntary arbitration.

Issue:Is the policy of a pharmaceutical company prohibiting its employees from marrying employees ofanycompetitor company valid?

Held:Glaxo’s policy prohibiting an employee from having a relationship with an employee of a competitorcompany is a valid exercise of management prerogative. Glaxo has a right to guard its trade secrets,manufacturingformulas, marketing strategies and other confidential programs and informationfrom competitors, especially sothat it and Astra are rival companies in the highly competitivepharmaceutical industry.

The prohibition against personal or marital relationships with employees of competitor companiesupon Glaxo’s employees is reasonable under the circumstances because relationships of that naturemight compromise theinterests of the company. In laying down the assailed company policy, Glaxoonly aims to protect its interestsagainst the possibility that a competitor company will gain access toits secrets and procedures.

That Glaxopossesses the right to protect its economic interests cannot be denied.No less than theConstitution recognizes the right of enterprises to adopt and enforce such a policy to protectits right toreasonable returns on investments and to expansion and growth.


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Indeed, while our laws endeavor togive life to the constitutional policy on social justice and theprotection of labor, it does not mean that everylabor dispute will be decided in favor of the workers.The law also recognizes that management has rightswhich are also entitled to respect andenforcement in the interest of fair play.

CASE NO. 17STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, Petitioners,

vs.RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents

G.R. No. 164774 April 12, 2006

Facts:

Petitioner Star Paper Corporation is a corporation engaged in trading – principally of paper products.Josephine Ongsitco is its Manager of the Personnel and Administration Department while SebastianChua is its Managing Director. Respondents Ronaldo D. Simbol , Wilfreda N. Comia and Lorna E.Estrella were all regular employees of the company.Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an employeeof the company, whom he married on June 27, 1998. Prior to the marriage, Ongsitco advised thecouple that should they decide to get married, one of them should resign pursuant to a companypolicy. Simbol resigned on June 20, 1998 pursuant to the company policy.Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-employee,whom she married on June 1, 2000. Ongsitco likewise reminded them that pursuant to companypolicy, one must resign should they decide to get married. Comia resigned on June 30, 2000.Estrella was hired on July 29, 1994. She met Luisito Zuñiga , also a co-worker. Petitioners stated thatZuñiga, a married man, got Estrella pregnant. The company allegedly could have terminated herservices due to immorality but she opted to resign on December 21, 1999.Respondents offer a different version of their dismissal. Simbol and Comia allege that they did notresign voluntarily; they were compelled to resign in view of an illegal company policy. As to

respondent Estrella, she alleges after returning to the company from a 21-day leave due tohospitalization, she was dismissed. She resigned because she was in dire need of money andresignation could give her the thirteenth month pay.They averred that the aforementioned company policy is illegal and contravenes Article 136 of theLabor Code. The Labor Arbiter dismissed the complaint for lack of merit. On appeal to the NLRC, theCommission affirmed the decision of the Labor Arbiter. Respondents filed a Motion forReconsideration but was denied by the NLRC. They appealed to the Court of Appeals which reversedthe NLRC decision declaring illegal.Issue:Whether the policy of the employer banning spouses from working in the same company violates therights of the employee under the Constitution and the Labor Code or is a valid exercise of

management prerogative.Held:YESThe Labor Code is the most comprehensive piece of legislation protecting labor. The case at barinvolves Article 136 of the Labor Code which provides:

Art. 136. It shall be unlawful for an employer to require as a condition of employment or continuationof employment that a woman employee shall not get married, or to stipulate expressly or tacitly thatupon getting married a woman employee shall be deemed resigned or separated, or to actuallydismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of hermarriage.


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It is true that the policy of petitioners prohibiting close relatives from working in the same companytakes the nature of an anti-nepotism employment policy. Companies adopt these policies to preventthe hiring of unqualified persons based on their status as a relative, rather than upon their ability.These policies focus upon the potential employment problems arising from the perception offavoritism exhibited towards relatives. With more women entering the workforce, employers are alsoenacting employment policies specifically prohibiting spouses from working for the same company.We note that two types of employment policies involve spouses: policies banning only spouses from

working in the same company (no-spouse employment policies), and those banning all immediatefamily members, including spouses, from working in the same company (anti-nepotism employmentpolicies).

A requirement that a woman employee must remain unmarried could be justified as a “bona fideoccupational qualification,” or BFOQ, where the particular requirements of the job would justify thesame, but not on the ground of a general principle, such as the desirability of spreading work in theworkplace. A requirement of that nature would be valid provided it reflects an inherent qualityreasonably necessary for satisfactory job performance.We do not find a reasonable business necessity in the case at bar. It is significant to note that in thecase at bar, respondents were hired after they were found fit for the job, but were asked to resignwhen they married a co-employee. Petitioners failed to show how the marriage of Simbol, then a

Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could bedetrimental to its business operations. Neither did petitioners explain how this detriment will happen inthe case of Wilfreda Comia, then a Production Helper in the Selecting Department, who marriedHoward Comia, then a helper in the cutter-machine.The policy is premised on the mere fear that employees married to each other will be less efficient. Ifwe uphold the questioned rule without valid justification, the employer can create policies based onan unproven presumption of a perceived danger at the expense of an employee’s right to security oftenure. Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdictioncannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensivethat we cannot prudently draw inferences from the legislature’s silence that married persons are notprotected under our Constitution and declare valid a policy based on a prejudice or stereotype.

Thus, for failure of petitioners to present undisputed proof of a reasonable business necessity, werule that the questioned policy is an invalid exercise of management prerogative.

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