LABOR LAW NOTES

Prepared by: Professor Diego Atienza

 

 

1. 1.      Abandonment

a.) Through flight, one derogates the course of justice by avoiding arrest, detention or continuance of criminal proceedings. The act of an employee to evade arrest does not constitute a valid or justifiable ground for not reporting for work. It shows an intention to abandon work. (Camua, Jr. vs. NLRC, 512 S 677)

b.) Absences incurred by an employee who is prevented from reporting for work due to his detention to answer some criminal charge against him is excusable if his detention is baseless, that the criminal charge was not at all supported by sufficient evidence and was dismissed for that reason. It did not amount to abandonment and his dismissal on that account is illegal. (Asian Terminals, Inc. vs. NRLC, 541 S 105)

 

1. 2.      Academic Personnel

a.) The term “academic personnel” is defined in Section 4 of the Manual of the Regulations for Private Schools as including “all school personnel who are formally engage in actual teaching service or in research assignments, either on full-time or part-time basis, as well as those who possess certain prescribed academic functions directly supportive of teaching, such as registrars, librarians, guidance counselors, researchers and other similar persons.” They include school officials responsible for academic matters, and may include other academic officials. (Magis Young Achievers’ Learning Center vs. Manalo, 579 S 421)

 

1. 3.      Accrual of Cause of Action

a.) The right to claim unpaid salaries or salary differentials accrues as they fall due. Salary differentials for a certain month, for example, only accrued after rendition of service in that month, specifically at the end of that month, and so forth and so on. (Datuman vs. First Cosmopolitan Manpower and Promotion Services, Inc. 571 S 41)

 

1. 4.      Analogous Just Causes of Dismissal

a.) For an employee to be validly dismissed for a cause analogous to those enumerated in Article 282, the cause must involve a voluntary and or willful act or omission of the employee. Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct. An example, involved in this case, is theft of credit cards belonging to a fellow employee. (John Hancock Life Insurance Corporation vs. Davis, 564 S 92)

 

1. 5.      Appeal/Appeal Bond

a.) The filing of a cash or surety bond is a jurisdictional requirement in an appeal involving monetary award, and the bond shall be in effect until the final disposition of the case. A surety bond, once accepted by the obligee (the employee to whom money benefits were due), becomes valid and enforceable, irrespective of whether or not the premiums thereon have been paid by the obligor (the employer liable for payment). (AFP General Insurance Corporation vs. Molina, 556 S 630)

b.) Neither Article 223 of the Labor Code nor the Rules on Procedure of the NLRCN require the posting of a bond for the NLRC to entertain a Motion for Reconsideration of its decision. That requirement is only for the perfection of an appeal from a Labor Arbiter’s decision involving a monetary award.(Cadalin v. CA, 572 SCRA 524)

 

 

1. 6.      Attorney’s fees

a.) In awarding attorney’s fees on account of unlawful withholding of wages, there is no need to show that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly and that the employee was forced to file a case for the collections thereof. (Asian International Manpower Services Inc., v. CA 504 SCRA 103)

b.) In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his client for the legal services rendered to the latter. In its extraordinary concept, attorney’s fees are deemed indemnity for damages ordered by the court to be paid by the losing party in the litigation. They are payable not to the lawyer but to the client, unless they have agreed that the award shall petition to the lawyer as additional compensation as part thereof. (Ortiz vs. San Miguel Corporation, 560 SCRA 654)

c.) A charging or special lien is an attorney’s special lien for compensation on the fund or judgment which he has recovered by means of his professional services for his client in a particular case. A client cannot, in the absence of a lawyer’s fault, consent or waiver, deprive his lawyer of his just fees already earned. The duty of the court is not only to see that lawyers act in a proper and lawful manner but also to see that they are paid their just and lawful fees. The Labor Code explicitly limits attorney’s fees to a maximum of 10% of the recovered amount.  The lien shall attach to the proceeds of the judgment, and the client who received the same, without paying his attorney who was responsible for its recovery, shall hold the said proceeds in trust for his lawyer to the extent of the value of the lawyer’s recorded lien. (National Power Corporation Drivers and Mechanics Association vs. National Power Corporation, 565 SCRA 417)

 

1. 7.      Back wages

a.) The fact that the NLRC did not award back wages to the dismissed employees or that the latter themselves did not appeal the NLRC decision on that ground, does not bar the CA from awarding back wages. There was no error in such award, which was a mere consequence of the finding that the employees were illegally deprived by the employer. (Asian Terminals, Inc. vs. NLRC, 541 SCRA 105)

 

1. 8.      Certification/Certification Election

a.) Without a final judgment declaring the legality of dismissal, dismissed employees are eligible to participate and vote in certification election (since they are deemed to be still employees within the meaning of the Labor Code). (Yokohoma Tire Philippines, Inc. vs. Yokohoma Employers Union, 539 SCRA 556)

 

1. 9.      Certiorari

a.) The mere pendency of a special civil action for certiorari, in connection with a pending case in a lower court or agency does not interrupt the course of the latter if there is no writ of injunction. (Remington Industrial Sales Corporation vs Castaneda, 507 SCRA 391)

b.) Only questions of law may be raised in a petition for review on certiorari – there is such a question if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. (General Santos Coca-Cola Plant Free Workers Union – Tupas vs. Coca-Cola Bottlers Phils., Inc. 579 SCRA 414)

 

10.  Closure of Establishment

a.) Under Article 283 of the Labor Code, the following requisites must concur for a valid closure of business: 1) serving a written notice in the employees at least one month before the intended date thereof; 2) serving a similar notice on the Department of Labor and Employment within the same period; 3) payment of separation pay in the required amount; and 4) the cessation of operation must be bona fide

The requisite of good faith is not satisfied where the employer closed the establishment unilaterally on the pretext of the excessiveness of the Union’s collective bargaining demands, since in their situation the employer has the remedy under the law to refer the matter to voluntary arbitration or collective agreement for resolution, or filing a case for unfair labor practice against the Union on the ground of bargaining in bad faith. .  (St. John Colleges, Inc. vs. St. John Faculty and Employees Union, 505 SCRA 764)

b.) The decision to close the business is a management prerogative exclusive to the employer, the exercise of which no court or tribunal can meddle with, except only when the employer fails to prove compliance with the requirements of Article 283. In case of closure in bad faith, the dismissal of the employees shall be declared illegal and they shall ordered reinstated with back wages, unless reinstatement is no longer possible, in such case the employer shall be liable for payment of full back wages, separation pay, at the rate of one month pay for every year of service. But if shown to be in good faith, the resultant dismissal shall be upheld, subject to payment of separation pay, if the closure is not for serious business losses or financial revenues, at the rate of ½ month’s pay for every year of service. (Eastridge Golf Club, Inc. vs. Eastridge Golf Club, Inc. Labor Union Super, 563 SCRA 93)

 

11.  Collective Bargaining Agreement.

a.) There is no per se test of good faith in collective bargaining. Good faith or bad faith is an influence to be drawn from the facts. The effect of an employer’s or Union’s individual actions is not the test of good faith bargaining, but the impact of all such occasions and actions, considered as a whole, and the influence fairly drawn therefrom collectively may offer a basis for a finding by the  NLRC regarding the kind of bargaining done by a party. (Union of Filipino Employees – Drug Food and Allied Industrial Unions – KMU vs. Nestle Philippines, Inc., 547 SCRA 323)

b.) The terms and conditions of a Collective Bargaining Agreement constitute the law between the parties. In order to ascertain the intention of the contracting parties, the arbitrator shall principally consider their contemporaneous history and the evidence of past parties, such as how a particular provision in question, which was also found in

three previous Collective bargaining agreements, was previously implemented. (Lepanto Consolidated Mining Company vs. Lepanto Local Staff Union, 562 SCRA 495)

c.) Although the collective bargaining agreement, in its face, does not contain an express prohibition of retirement benefits to employees, the parties may still prove it by means of contemporaneous subsequent acts of the parties, such as the execution of affidavits by the union managers and the company managers. (Suarez vs. National Steel Corporation, 569 SCRA 331)

 

12.  Compromise Agreement.

a.) The right to compensation final and executor agreements, as long as exercised by the proper party litigants, has been recognized by the Supreme Court, following a catena of cases. (Cosmos Bottling Corporation vs. Negrada 547 SCRA 571)

b.) Article 2073 of the Civil Code, which provides that “(a) compromise has upon the parties the effect and authority of res judicata,” applies suppletorily to labor to labor cases even if the compromise is not judicially approved. That the employee was not assisted by his counsel when he entered into a compromise agreement does not render it null and void – it is valid as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he was entering into. Only the employer, not the counsel, can impugn the consideration of a compromise is unconscionable. The only qualification for the employee’s right to compromise a suit is that if the compromise is entered into with the intent of depriving the counsel of the fees justly due him, the compromise must be subject to the said fees. (J. Phil Marine, Inc. vs. NLRC, 561 SCRA 675)

 

13.  Condonation.

a.) The fact that numerous past infractions have not been immediately subjected to sanctions cannot be interpreted as condonation of the offense committed. The prerogative of the employers to discipline employees and impose punishment is a legal right and cannot as a general rule be impliedly waived. The employee who claims the contrary should be able to demonstrate by substantial evidence the claimed waiver or condonation. (R.B. Michael Press vs. Galit, 545 SCRA 23)

 

                 14. Confidential Employees.

a.)For purposes of applying the provisions of the Labor Code on who may join unions of rand and file employees, jurisprudence defines “confidential employees” as those who “assist or set in a confidential capacity to persons who formulate, determine and effectuate management policies in the field of labor relations”. However, for the purpose of applying the provision of laws of country as a just cause for the dismissal of an employee, jurisprudence teaches us that laws of country should ideally apply only to cases involving employees occupying positions of trust and confidence or to those situations where the employer is charged with the care and custody of the employee’s money or property. To the first class belong managerial employees, to the second cashiers, auditors, property custodians, or those who, in the normal and routine exercise of functions, regularly handle significant amounts of money or property. (Santos vs. Shing Hung Plastics Co., Inc., 567 SCRA 11)

 

15. Constructive Dismissal.

a.) The employer’s acts of placing some regular employees on “stay homes status” and not giving them work assignments in more than six months are tantamount to constructive and illegal dismissal. (Dole Philippines, Inc. vs. Estiva, 509 SCRA 332)

b.) Constructive dismissal is a cessation of work because continued employment is rendered impossible, unreasonable or unlikely, or when there is demotion in rank or diminution in pay or both, or when a clear discrimination, insensibility or disdain by the employer becomes unbearable to the employee. It is whether a reasonable man in the employee’s position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but made to appear as if it is not. In fact, the employee who is constructively dismissed may be allowed to keep on reporting for work. (Uniwide Sales Warehouse Club vs. NLRC, 547 SCRA 220)

 

16. Contracting Out of Work.

a.) There is no absolute figure set for what is considered substantial capital for an independent job contractor, but is ensured against the type of work which the contractor is obliged to perform for the principal, based on a reasonable determination of the amount sufficient to carry out the service contract as specified therein. And it is the contractor, not the employee, who has the burden of proving that it has the substantial capital, investment and tools to engage in job contracting.

A provision in the service contract where the contractor warrants to the principal the daily attendance of the workers assigned to the latter is an indication that the contractor is not an independent contractor, who is responsible to the principal only for the results of the work, job or service. (Coca-Cola Bottlers Phils. Inc., vs. Agito, 579 SCRA 445)

 

 

                 17. Discrimination.

a.) Discrimination refers to a failure to test all persons equally when no reasonable distinction can be found between those favored and those not favored. Thus, before a claim of discrimination can prosper, it must be established that, first, there is no reasonable distinction or classification that can be obtained between persons belonging to the same class, and second, persons belonging to the same class not treated alike. (Portuguez vs. GSIS Family Bank and Comsavings Bank, 517 SCRA 309)

b.) The fact that an employee who failed to pass the required Board Exam for his position was terminated while another employee who also failed to pass it was allowed by the employer to apply for and transfer to another position in the hospital does not constitute unlawful discrimination. This was a valid exercise of management prerogative in the absence of a showing that the latter did not have the qualification for the position to which he was transferred. An objection based on the ground that one has better credentials than the appointee is frowned upon so lang as the latter possesses the minimum requirements for the position.  (St. Luke’s Medical Center Employees Association vs. NLRC, 517 SCRA 677)

 

18. Due Process.

a.) Company policies or practices are binding on the parties. Some can ripen into an obligation on the part of the employer, such as those which confer benefits on the employees or regulate the procedure and requirements for their termination. Non-

compliance with the latter amounts to denial of due process. (Suico vs. NLRC, 513 SCRA 325)

b.) There is substantial compliance with due process where the employees were notified that their dismissal was being requested by the Union, their explanation heard and were dismissed only after the employer had reviewed and considered the documents submitted by the Union vis-à-vis the written explanation submitted by the said employees. (Alabang Country Club, Inc. vs. NLRC, 545 SCRA 351)

 

19. Employer-Employee Relationship.

a.) There is no employee-employer relationship between a company and a retained physician who entered into a retainership agreement whereby the latter was not subject to the contract of the former in the performance of his duties, and the company had no power of dismissal because under the agreement, both parties could terminate the relationship upon giving a 30-day notice, thus the company did not wield the sole power of termination.  (Coca-Cola Bottlers [Phils.], Inc. vs. Climaco, 514 SCRA 164)

b.) A person hired by a TV production company as a security guard, but ostensibly as a “talent”, to provide security service to the support staff of a noontime program (Eat Bulaga), stars and guests, as well as to control the audience, whose relationship with the employer was that of employee under the established tests for determining employee relationship, is an employee, not an independent contractor. (Television and Production Exponents, Inc. vs. Servana, 542 SCRA 578)

c.) Where the worker’s service was engaged by the employer intermittently for 5 years as a reliever nurse, she was a regular employee because she was engaged in work that was undoubtedly necessary and desirable in the hotel’s business of providing comfortable accommodation to its guests. In any case, since she rendered more than one year of service as intermittent nurse, she had acquired regularity of status and could not be dismissed without just or authorized cause.  (The Peninsula manila vs. Atipio, 554 SCRA 550)

d.) Not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former – rules which serve as general guidelines towards the achievement of the mutually desired result, are not indicative of the power of control, since they do not control or fix the methodology and bind or restrain the party hired to the use of such means. The employer’s power to reject or approve for publication any specific article a columnist writes for her column cannot be the control contemplated in the control test as it is but logical that one who commissions another to do a piece of work should have the right to accept or reject the product. But a regular reporter is not as independent in doing his or her work for the employer. (Orosco vs. Fifth Division of the Court of Appeals, 562 SCRA 36)

e.) Under the control test, a physician is the employee of the hospital that hired him, if the latter controls both the means and the details of the process by which he is to accomplish his task, such as, in this case, the doctors maintained specific work schedules as determined by the medical director, which consisted of 24 hour shifts totaling 48 hours each week, and which were strictly observed under pain of administrative sanctions, and their work in the emergency room, operating room or any department or ward is monitored by the hospital through its supervisors, and no operations within these areas could be undertaken without the approval or consent of the hospital or its medical director.

The exception is where the doctor is a training resident in a training hospital, there is a training agreement between them, and the training program is approved by the appropriate government agency, in such case, under the Omnibus Rules Implementing the Labor Code, the training resident is not an employee of the hospital. (Calamba Medical Center, Inc. vs. NLRC, 571 SCRA 585)

 

                   20. Evidence

a.) Once the employee set out with particularity in his complaint, position paper, affidavits or other documents the labor standard benefits to which he is entitled, and which he alleged that his employer failed to pay him, it becomes the employer’s burden to prove that it has paid these money claims. It is the employer’s obligation to prove payment rather than the employees to prove non-payment. Therefore, the Labor Arbiter’s denial of money claims for failure of the complainant to state the particulars to substantiate the same is erroneous. The failure of the employer to present documentary evidence of payment, inspite of orders for it to do so, gives rise to the presumption that their presentations would be prejudicial to its cause. (De Guzman vs. NLRC, 540 SCRA 41)

b.) Payroll sheets are inconclusive to disprove the employee’s 8 hour per day work shift. Instead of payroll sheets, the time cards would have been more reliable. The employer in this case, however, did not present the same. When a party has in its power to produce evidence that would overthrow a case made against it but fails to do so, the presumption is that such evidence, if produced, would operate to its prejudice and support the case of other party. (Mc Donald’s [Katipunan Branch] vs. Alba, 574 SCRA 427)

 

21. Field Personnel/Field Work.

a.) If required to be at specific places at specific times, employees including drivers, cannot be said to be field personnel inspite of the fact that they are performing work away from the principal offices of the employer. To determine whether an employee is a field employee it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether the employee’s time and performance are constantly supervised by the employer. (Duterte vs. Kingswood Trading Company, Inc., 534 SCRA 607)

 

22. Fixed – Term Employment.

a.) Fixed-term employment contracts are the exceptions rather than the general rule. It is valid only under certain circumstances. In Brent, the Supreme Court identified certain circumstances wherein a fixed term is an essential and natural appurtenance, such as employment contracts which are neither seasonal nor for specific projects but to which a fixed term is essential and natural, such as overseas employment contracts, appointment to the position of dean, assistant dean, college secretary, principal and other administrative officers in educational institutions, which are by practice rotated among the faculty members , and whose fixed terms are a necessity, without which no reasonable rotation would be possible. This is also the case under P. I. No. 8 of the Minutes of Labor which recognize that certain company officials may be elected for what would amount to a fixed term, at the expiration of which they would have to stand down.  (Price vs. Innodata Phils., Inc., 567 SCRA 269)

 

                   23. Gross Neglect.

a.) While an employee’s negligence was not habitual but was gross in view of the considerable resultant damage, that cause is sufficient for the dismissal of the employee. The employee in this case was a teacher whose neglect caused the death of a child under her charge when she left some children in the swimming pool without any adult to attend to them. (School of the Holy Spirit of Quezon City vs. Taguiam, 558 SCRA 223)

 

24. Holiday Pay.

a.) The employees involved in this case are required to work only from Monday to Friday. Thus, the minimum allowable divisor (in determining the daily equivalent of the monthly salary) is 263 (yearly salary ÷ 263), arrived at by deducting 51 unworked Sundays and 51 unworked Saturdays from 365. Since the employer used the 360 day divisor, which is clearly above the minimum, indubitably the employees were given their holiday pay ( with the monthly salary) with said formula, the employees were already paid their regular and special holidays, the days when no work is done, and the unworked Saturdays and Sundays. (Leyte IV Electric Cooperative, Inc. vs. LEYECO Employees Union – ALU, 537 SCRA 154)

 

25. Illegal Recruitment.

a.) There is illegal recruitment where a non-license or non-holder of authority engages in recruitment activities even in the absence of money or other valuables given as consideration for the recruiter’s service, under Article 13(b) of the Labor Code and Sec. 6 of R.A. 8042. The act of recruitment may be for profit or not. (People vs. Jamiloso, 512 SCRA 340)

b.) The conduct of preparatory interviews, which is a recruitment activity, is illegal recruitment although no payment was received therefor, since the one conducting it did not have the required license or authority, and by definition, an act of recruitment may be “for profit or not.”  (C.F. Sharp Crew Management, Inc. vs. Espanol, Jr. 533 SCRA 424)

c.) Under R.A. 8042, even a license or holder of authority can be held liable for illegal recruitment should he commit or omit to do, as the case may be, any of the acts enumerated in its Sec. 6. An employee of a company engaged in illegal recruitment may be held liable as principal by direct participation, together with the employer, if it is shown that he actively and consciously participated in the recruitment process. (People vs. Nogra, 563 SCRA 723)

d.) The basic rule is that a criminal act is permissible under the law in force at the time of its commission. The accused here was properly convicted under the Labor Code which was in force in 1993 when the acts attributed to him were committed. Although the information charged him with an offense erroneously designated as covered by R.A. 8042, but alleged in its body, acts punishable under the Labor Code. (There was no condition of the principle of ex post facto law prohibition.) (Nasi – Villar vs. People vs. 571 SCRA 202)

e.) An employee of a company engaged in illegal recruitment may be held liable as principal, together with his employer, if it’s shown that he actively and consciously participated in illegal recruitment. He cannot claim to be merely following the dictates of his employer and use good faith as a shield against criminal liability. Good faith is not a defense in illegal recruitment, which is malum prohibitum, not malum in se. Even it be true that no money changed hands, money is not material to a prosecution for illegal recruitment, as the definition of  _____ in the Labor Code includes the phrase, “whether for profit or not.”  (People vs. Valenciano, 573 SCRA 572)

f.) To convict for estafa under Art. 315 (2)(a) of the Revised Penal Code, in connection with illegal recruitment, it is essential that the false statement or fraudulent representation constitutes the very cause or the only motive which induces the complainant to part with a thing of value.  (People vs. Calimon, 577 SCRA 116)

 

26. Jurisdiction.

a.) The Labor Arbiter has jurisdiction over a complaint filed by a Corporate Secretary against a corporation, who was also its financial assistant and personnel officer of the two other sister corporations. A corporation can engage its corporate officers to perform services which would make them employees. (Rural Bank of Coron [Pallocan], Inc., vs. Cortez, 510 SCRA 443)

b.) The Labor Arbiter erred in ruling that “the labor relation system in the Philippines has no extra-territorial jurisdiction.” Labor Arbiter have original and exclusive jurisdiction over claims arising from employee-employer relationship, including termination disputes involving all workers, among them Overseas Filipino Workers. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulation to the contrary notwithstanding. This is rendered irrespective by Art. 17 of the Civil Code which states that laws “which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. (Sim vs. NLRC, 534 SCRA 515)

c.) While it is true that Rule II, Sec. 3 of the Rules on the Disposition of Labor Standard Cases states that where the employee-employer has been severed, claims for monetary benefits fall within the original and exclusive jurisdiction of the Labor Arbiters, the same does not apply where, at the time of the filing of the complaint at the Regional Office, the complainants were still employees of the respondent. It is but axiomatic that the jurisprudence of a tribunal, including a quasi judicial office or government agency, over the nature and subject matter of a petition or complaint, is determined by the material allegations therein, the character of the relief prayed for, and the law existing at the time of the filing of the complaint or petition. Once jurisdiction is vested, the same is retained up to the end of litigation. ( Here jurisdiction was assumed by the regional office as duly authorized representative of  the  in exercising visitorial and enforcement powers under Art. 128 of the Labor Code. (Rizal Security and Protective Services, Inc. vs. Maraan, 546 SCRA 23)

d.) The contractor cannot claim reimbursement from the principal thru a cross claim filed with the Labor Court. Such claim is within the realm of civil law and jurisdiction over the case belongs to the regular courts. (Jaguar Security and Investigation Agency vs. Sales, 552 SCRA 295)

e.) An employer’s complaint against an employee for reimbursement of training expenses is not within the jurisprudence of the Labor Arbiter. The jurisdiction of the Labor Arbiter, as well as the NLRC, is limited to disputes arising from an employee-employer relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement, not one to collect a sum of money based on civil laws on obligations and contracts. (U – Bix Corporation vs. Hollero, 570 SCRA 373)

 

f.) The issue of deduction for tax purposes (initiated as a claim for illegal deduction from retirement benefits) is a money claim arising from employee-employer relationship which clearly falls within the jurisdiction of the Labor Arbiters and the NLRC. (Santos vs. Servier Philippines, Inc., 572 SCRA 187)

 

27. Labor Arbiter

Where the Labor Arbiter completely disregarded and violated Sec. 6 (c) of P.D. No. 902-A, as amended which categorically mandates the suspension of all actions in claims against a corporation placed under a management committee by the Securities and Exchange Commission, the proceedings before the said Labor Arbiter and the order and writ subsequently issued by the NLRC are null and void, for having been undertaken or issued in violation of the SEC suspension order. Acts executed against the provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity. The Labor Arbiter’s judgment, being void ab initio is non-existent, and all

proceedings based thereon are equally worthless. (Lingkod Manggagawa sa Rubberworld Adidas – Anglo vs. Rubberworld [Phils] Inc., 513 SCRA 208)

 

                   28. Lex Loci Contractus.

a.) The provisions of the Constitution as well as the Labor Code which afford protection to Labor apply to Filipino employees whether working within the Philippines or abroad. The principle of lex loci contractus (or the law of country where the contract was made) governs in this jurisdiction. (PCL Shipping Philippines, Inc. vs. NLRC, 511 SCRA 44)

 

29. Lost of Trust and Confidence.

a.) A Labor Arbiter or tribunal may legally sustain an employee’s dismissal on the basis of substantial evidence even if the employee has not been convicted in a criminal case arising from the same act. The dropping of the charges by the prosecutor or the acquittal of the employee would not necessarily negate the existence of lost of trust and confidence as a ground for dismissal. A bank’s OIC-Manager is a managerial employee as to whom the employer engages a wide latitude of discretion in setting up stringent standards for continued employment. Unlike other just causes of dismissal, trust in an employee, once lost, is difficult if not impossible to regain. A bank owes great liability to the public it deals with, its operations being essentially imbued with public interest. (Community Rutal Bank of San Isidro [N.E.], Inc. vs. Pace, 508 SCRA 245)

b.) While employers are given a wide latitude of discretion in terminating the service of managerial employees for loss of confidence, there must be substantial proof thereof which means that the employer must clearly and convincingly established the charges or, in fine, the facts and incidents upon which the lost of confidence may be made to rest, i.e, it must be based on a willful breach of trust and founded on clearly established proven facts. (Aromin vs. NLRC, 553 SCRA 273)

c.) The act of supervising medical representatives in attaching to medicine samples to be distributed to dealers a thank-you note of his father who run for and lost his bid for the position of Municipal Vice-Mayor was adequate justification for his dismissal for lost of trust and confidence. Although the samples had not been actually distributed, because, as a supervisor his functions were of a nature that required the employer’s full trust and confidence. However, as equitable relief he was awarded separation pay of one month’s pay for every year of service. (Bristol Myers Squibb [Phils] vs. Baban, 574 SCRA 198)

 

30. Management Prerogative.

a.) The act of the management in reorganizing the company’s sales department in order to achieve its objectives is a legitimate exercise of its management prerogative, barring any showing of bad faith. Labor laws discourage interference in employer’s judgment concerning the conduct of their business. The law must protect not only the welfare of employees but also the rights of employers. (Sugue vs. Triumph International [Phils], Inc., 577 SCRA 323)

 

31. Managerial Employee.

a.) The mere fact that an employee is a managerial employee does not give unbridled discretion to the employer to remove him from his job on the ground of loss of

confidence. The fact that one is a managerial employee does not by itself exclude him from the protection of the constitutional guarantee of security of tenure. In this case, the employer failed to show by substantial evidence that the employee was guilty of misconduct which makes him unworthy of the trust and confidence demanded by his position. (LBC Domestic Franchise Co. vs. Florido, 530 SCRA 607)

b.) The Chief Mate of a ship, as an executive officer next in command to the captain, is a managerial employee. (Centennial Transmissive, Inc. vs. Dela Cruz, 563 SCRA 210)

 

                   32. Medical and Dental Services.

a.) Art. 157 do not require the engagement of full-time nurse as regular employees of a company employing not less than 50 workers. An employer who employs more than 200 workers is mandated to furnish its employees with the services of a full-time registered nurse, a part-time physician and a dentist, and an emergency clinic which means that it should provide or make available such medical allied services to its employees, not necessarily to hire or employ a service provider. There is nothing in the law which says that medical practitioners required to be engaged should naturally be hired as employees. The law, as written, only requires the employer “to retain” not employ the medical practitioners mentioned therein. The services may be provided by independent contractor. (Escasinas vs. Shangrila Mactan Island Resort, 580 SCRA 463)

 

33. Meirin Test

a.) The “Meiorin Test” is a test of reasonableness of company policy. Under this test, 1) the employer must show that it adopted the standard for a purpose rationally connected with the performance of a job; 2) the employer must establish that a standard is reasonably necessary to the accomplishment of that work-related purpose; 3) the employer must establish that the standard is reasonably necessary to accomplish the legitimate work related activity. The weight standard imposed by an airline company on its cabin crew is necessary for flight safety. Passenger safety goes to the case of a job of a cabin attendant being ____ necessarily impedes mobility. Such standard is deemed to be a ___________. (Yrasuegui vs. Philippine Airlines, 569 SCRA 463)

 

34. NLRC Rules.

a.) Although the NLRC Rules of Procedure may be liberally construed in the determination of labor disputes, there is, however, a caveat to this policy. Liberal construction of the NLRC Rules (regarding the filing of a bond to perfect an appeal from a judgment with a monetary) is allowed only in meritorious cases, where there is substantial compliance with the NLRC Rules of Procedure or where the party involved demonstrates a willingness to abide by the Rules by posting a partial bond. Liberality in the interpretation of the Rules should not be applied where it would render futile the very purpose for which the principle of liberality is adopted. It stems from the mandate that a wokingman’s welfare should be the primordial and paramount consideration. (Sy vs. ALC Industries, Inc. 568 SCRA 367)

 

 

 

                   35. Notice Requirement.

a.) The mere posting on the company bulletin board of the written notice of closure or cessation of the employer’s business does not satisfy the requirement of Art. 283 of “serving a written notice on the workers” which denotes individual notice to be served on each and every employee of the company. (Galaxie Steel Workers Union vs. NLRC, 504 SCRA 692)

 

36. Overseas Filipino Workers

a.) It is presumed that before the employment of OFWs, they were subjected to trade test required by law to be conducted by recruiting agency to ensure the employment of only technically qualified workers for the foreign principal. The purpose of the trade test is to weed out incompetent applicants from the pool of available workers. Therefore, the alleged incompetence of an OFW as a ground for his dismissal should have factual formalities. Incompetence may be shown by weighing it against a standard, landmark or criterion. (EDI- Staff Builders International, Inc. vs. NLRC, 537 SCRA 409)

 

b.) The signing of the substitute contracts with the foreign employer or principal before the expiration of the PDEA approved contracts and any continuation of the employees beyond the original one year term against the employee’s will, are continuing violation of the PDEA-approved contract. The subsequently executed side agreement of an overseas contract worker with his foreign employer who reduced his salary below the amount approved by the PDEA is void because it is against our existing laws, morals and public policy. It is the terms of the original PDEA-approved contract of employment that shall govern the relationship between the petitioner-employee and the respondent-recruitment agency and foreign employer. (Datuman vs. First Cosmopolitan Manpower and Promotion Services, Inc., 571 SCRA 41)

 

37.  Overtime Pay.

a.) The correct criterion in determining whether or not sailors are entitled to overtime pay is not whether they were on board and cannot leave the ship beyond the regular and working hours a day, but whether they actually rendered service beyond the said number of hours. (PCL Shipping Philippines, Inc. vs. NLRC, 511 SCRA 44)

 

38. Past Offenses.

a.) While a penalty may no longer be imposed on offenses for which the employee has already been punished, the same, among other offenses may still be used as justification of an employee’s dismissal. The court must take into considerations all the offenses that the employee committed during his employment and decide whether those infractions taken together constitute a valid cause for dismissal. (Janssen Pharmaceutica vs. Silayro, 546 SCRA 628)

b.) The correct rule has always been that previous offenses may be used as justifications for dismissal only if the infractions are related to the subsequent offense upon which the basis of termination is decreed. Where an employee has already suffered the corresponding penalties for prior infractions, to consider these as justification for his

dismissal would be penalizing the employee twice for the same offense. (Salas vs. Aboitiz One, Inc., 556 SCRA 374)

c.) Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other. A series of irregularities, when combined, may constitute serious misconduct which is a just cause for dismissal. (PNB vs. Velasco, 564 SCRA 512)

 

39. Payroll Reinstatement.

a.) Where an employee, pursuant to a labor arbiter’s decision ordering his reinstatement, is reinstated only in the payroll at the employer’s option, and if the decision of the labor arbiter is reversed on appeal, the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries he received while the case was pending appeal or they can be deducted from the accrued benefits that the employee may be entitled to receive from his employer under existing laws, CBA provisions, and company practices. But if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered, without need of refund. (Genuino vs. NLRC, 539 SCRA 342)

b.) Payroll reinstatement is a departure from the rule and special circumstances which make actual reinstatement impracticable must be shown. The particular circumstances in this case validate the secretary’s (DOLE) decision to order payroll reinstatement instead of actual reinstatement. It was obviously impracticable for the employer hotel to actually reinstate the employees who shaved their heads and cropped their hair because this was exactly the reason they were prevented from working in the first place. (NUWHRAIN Dusit Hotel Nikko Chapter vs. Court of Appeals, 570 SCRA 598)

 

40.  Penalty of Wrongdoing.

a.) Where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe as dismissal. Dishonesty should not be condoned. After all, honesty is the best policy. However punishment must be commensurate with the offense committed. Repeated offenses show a pattern of behavior which proves that the employee is an _____ violation. The supreme penalty of dismissal is the best penalty to the working man. Thus, care should be exercised by employers in imposing dismissal on erring employees. Dismissal should be availed of as a last resort. In this case, the chief cook in a restaurant was dismissed for stealing squid heads worth P56.00. He should not have been terminated according to the Supreme Court because this was his first offense in his 31 years of service and he had suffered enough by having been imprisoned ______ and preventively suspended for one month. However, since he has reached retirement age by the time of the SC decision, he was not ordered reinstated but awarded backwages and separation pay. (Sagales vs. Rustan’s Commercial Corporation, 572 SCRA 89)

 

41. Position Paper.

a.) A party’s failure to file a pp on time is not a ground for striking out the paper from the records, much less for dismissing a complaint. The Labor Arbiter is mandated by law to use every reasonable means to ascertain the facts in each case speedily and effectively, without regard for technicalities of law and procedure, all in the extent of due process. (ABS-CBN Broadcasting Corp. vs. Nazareno, 503 SCRA 204)

 

42. Preventive Suspension.

a.) Where the employee was merely suspended pending investigation an d was not dismissed, sudden refusal  to return to work when required by the employer  to do so, the appropriate resolution of the situation should be to allow the employees  to work under the same terms and conditions, but without back wages. (Ambee Food Services, Inc. vs. Court of Appeals, 556 SCRA 59)

 

43.  Project Employment.

a.) Once someone claimed as a project employee has been continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks, and these tasks are vital, necessary and indispensable to the usual trade or business of the employer, then the employee must be deemed to be, not a project, but a regular employee. (Philippine Long Distance Company vs. Ylagan, 508 SCRA 31)

 

b.) The Supreme Court took judicial notice that it is an industry practice in port services to hire reliever stevedores in order to insure smooth 24-hour stevedoring and arrastre operations in the port area. It should be deemed part of the nature of the work of such relievers that they can only work as stevedores in the absence of the employees regularly employed for the same service, i.e. subject to availability of work. They are not regular employees but are akin to seasonal or project employees, albeit on a daily basis. (Pier 8 Arrastre and Stevedoring Services, Inc. vs. Boclot, 534 SCRA 431)

c.) The scope and duration of the undertaking, separate and distinct from the company’s other undertakings, must have been determined and made known to the employees at the time of the employment, for the employees to be properly deemed as project employees. While the absence of a written contract does not automatically confer regular status, it has been construed as a red flag in cases involving the questions of  whether the employees concerned are regular or not. Absent any other proof that the project employees were informed of their status as such, it must be presumed that they were regular employees in accordance with DO No. 19, series of 1993. Moreover, the failure of the employer to file a termination report with the DOLE everytime a project or phase thereof is completed indicates that the employees therein were not project employees. (Hanjin Heavy Industries and Construction Co., Ltd. vs. Ibanez, 555 SCRA 537)

d) An electrical contractor’s business depends on the contracts that he is able to obtain from the real estate developers and builders of buildings, thus the work provided by him depends on the availability of such contract or projects and the duration of the employment of his workforce is not permanent but coterminous with the projects to which the workers are assigned. Project employees enjoy security of tenure and may not be terminated during the period of their project employment except for just or authorized cause, with compliance with the due process requirements mandated by law. (Saberola vs. Suarez, 558 SCRA 135)

 

44.  Quitclaims

a.) Not all waivers and quitclaims are invalid as against public policy—it is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of the settlement are unconscionable on its face, that the law will step in to annul the questionable transactions. But where the waiver is couched in clear and unequivocal terms, leaving no doubt in to the intentions of them giving up a right or

benefit that legally pertains to them, the same is valid and effective. Dire necessity is not an acceptable ground for annulling waiver since it has not been shown that the employee was force to sign it. (Famanila vs. Court of Appeals, 500 SCRA 76)

b) Where it appears that the employer took advantage of the employee’s predicament and dire financial needs to let him sign the quitclaims in exchange for his retirement benefits, the same is ineffective to bar claims for the full inclusions of the employee’s legal rights. (Rizal Commercial Banking Corporation vs. Beltran, 500 SCRA 119)

 

45. Reduction of Work Items.

Reduction of the employees’ work hours is allowed where the arrangement is resorted to by the employer to prevent serious losses due to causes beyond his control, such as a substantial slump in the demand for his goods and services or there’s lack of raw materials, and after notices and consultations with the workers. However, where the company suffered loss in only 1 year, and was able to retain a considerable amount of earnings to sufficiently sustain its operations, reduction of work hours and pay is not warranted, being contrary to the State’s policy to afford protection to labor and provide full employment. (Linton Commercial Co., Inc., vs. Hellera, 535 SCRA 434)

 

46. Redundancy.

Just like installation of labor-saving devices, the ground of redundancy does not require the exhibition of proof of losses or imminent losses of all statutory grounds provided in Article 283 of the Labor Code, it is only retrenchment which requires proof of losses or possible losses as justification for termination of employment. In implementing a redundancy program, as employer is required to apply reasonable ____ to show the program is fair, well-thought of and in good faith. (Coats Manila Bay, Inc. vs. Ortega, 579 SCRA 300)

 

47. Regularity of Employment.

Workers (production assistants) hired as “talents” for pre-agreed “talent fees” instead of salaries cannot be considered as talents because they are not actors or radio specialists but mere clerks or utility employees. They are regular employees who perform several different duties under the control and supervision of ABS-CBN executives and supervisors, although they did not observe the required office hours and were permitted to join other productions during their free time. The presumption is that under the work done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional services, such work is a regular employment of such employee and not an independent contractor. (ABS-CBN Broadcasting Corporation vs. Nazareno, 503 SCRA 204)

 

b) Employees who perform their function alongside regular employees in rendering service which are usually necessary or desirable in the usual business of the employer, such as those engaged as processing attendants in an establishment engaged in the manufacture and production of food products for export., are regular employees of the latter, although fixed periods of employment are imposed on them to preclude their acquisition of security of tenure. The latter practice of the employer should be struck down as contrary to public policy, morals, good customs or public order. (San Miguel Corporation vs. NLRC, 510 SCRA 181)

 

48. Reinstatement Pending Appeal.

a.) Article 223 of the Labor Code (on immediate expectation of an order of reinstatement even pending appeal) does not apply where there is no finding of illegal dismissal. Having found that the employee concerned was guilty of a serious misconduct and fraud or breach of trust, the Labor Arbiter erred in ordering his reinstatement without back wages as a measure of equitable ruling. (Lansangan vs. Amkor Technology Philippines, Inc., 577 SCRA 439)

 

49 Resignation

a.) A person of high educational attainment and qualifications is expected to know the importance of everything she executes and cannot be said to have been duped into signing a resignation or retirement letter against her will. If, indeed, an employee was made to resign against her will, she would not have allowed a considerable amount of time (almost 6 months) to elapse before enforcing her rights allegedly violated. (Amkor Technology Philippines, Inc. vs. Juangco, 512 SCRA 325)

 

50. Respondeat Superior

a.) On the principle of respondeat superior, or command responsibility, along, managerial employees may be held liable for negligence in the performance of their duties for not exercising the high degree of responsibility expected of them, which includes unearthing the fraudulent and irregular activities of their subordinates. (Muaje-Tuazon vs. Wenphil Corporation, 511 SCRA 521)

 

51. Retirement.

a.) An employer is free to impose a retirement age less tham 65 for as long as it has the employees’ consent. Conversely, termination of an employee on the basis of a retirement plan which was not freely assented to by her amounts to illegal dismissal. (The supposed consent, as alleged by the employer, consisted of her having given “voluntary “ contributions to the plan, was not true—the truth being that the employee had no choice but to participate in the plan, given that the only way she could refrain from doing that was to resign or lose her job. The plan was adopted when the employee was clearly on her 12th year of employment – it was not a part of the terms and conditions of employment to which she agreed.) (Jaculbe vs. Silliman University, 518 SCRA 445)

b) A retirement plan in a company partakes of the nature of a contract, with the employer and the employee as the contracting parties. RA No. 7641, otherwise known as The Retirement Pay Law, only applies in a situation where 1.) there is no CBA or other applicable employment contract providing for retirement benefits for an employee; or 2.) there is sucha CBA or other applicable contract providing for retirement benefits which are below the requirements set by law. The reason for the 1st is to prevent the absurd situation where an employee, who is otherwise deserving, is denied retirement benefits because the employer has not provided any. The reason for the 2nd is expressed in the Latin maxim, pacta private juri public derogere non possunt. Private contract cannot derogate from the public law. (Oxales vs. United Laboratories, Inc. 559 SCRA 26)

c) The receipt of the retirement benefits does not bar the employee from receiving separation pay because there are not mutually exclusive, unless there is a specific

prohibition against such double payment is the retirement plan or the CBA. There being, in this case, such a prohibition under the retirement plan, the employee is entitled only to separation pay under the law or retirement benefits under the plan, but not to both.

For the retirement benefits to be exempt from withholding tax, the taxpayer is burdened to prove the concurrence of the following elements: 1) a reasonable retirement is maintained by the employer; 2) the retiring employee has been in the service of that employer for at least 10 years; 3) the retiring employee is not less than 50 years of age at the time of retirement; and 4) the benefit had been availed of only once. (Santos vs. Servier Philippines, Inc., 572 SCRA 487)

 

52.  Seafarers.

a.) A seafarer is a contractual, not a regular employee, and his employment is contextually fixed for a period of time.  His employment, and his claims for death or illness compensation, is governed by the contract he signs everytime he is hired, and is not rooted in the provisions of the Labor Code. (NYK-Fil Ship Management, Inc., vs. NLRC, 503 SCRA 595)

b) With respect to the work of the crew of a vessel, it could not have been the purpose of the law to require their employees to give them overtime pay or night shift differential pay, even when they are not actually working. The usual criterion in determining whether they were on board and could not have the ship beyond the regular 8 hours of work per day, but whether they actually rendered service in excess of the said number of hours. (Ducut vs. Court of Appeals, 550 SCRA 260)

 

53. Security Guards.

a.) The security guards’ immediate recourse for the payment of wage increases under a Wage Order is with their direct employer, the security agency. However, in order for the security agency to employ with the Wage Order, the Wage Order made a specific provision to amend existing contracts for security services by allowing the adjustment of the consideration to cover the service contractor’s payment of the increases mandated. In the end, the ultimate liability for the payment of the increases rests with the principal.

For the security guards, the actual source of the payment of their wage differentials and premiums for holidat or rest day pay does not matter as long as they are paid. That is the importance of the principal’s and the contractor’s solidary liability. Creditors, such as the security guards, may collect from anyone of the solidary debtors.  Solidary liability does not mean that in between themselves, two solidary debtors are liable only for half of the payment. (Eparisa Security and General Services, Inc., vs. Liceo de Cagayan University, 508 SCRA 370)

 

54. Serious Misconduct.

a.) An employee was validly dismissed for serious misconduct after she sent an e-mail message to her co-employees maligning the employer company’s Senior Vice –President, in retaliation for the latter’s disapproval of her plan to hold a Halloween party in the office premises for trick-or-treating the employees’ children. Her message said: “He was so unfair… para bang lagi siyang iniisahan sa trabaho… anyway, solohin na lang niya bukas ang office. (Punzal vs. ETSI Technologies, Inc. 518 SCRA 66)

b) The Supreme Court took judicial notice that drug abuse can damage the mental faculties of the user- it is beyond question that only employee under the influence of drugs cannot possibly continue doing his duties without posing a serious threat to the lives and property of his co-workers and even his employer. The use of illegal drugs is a

just cause for dismissal. (Bughaw, Jr. vs. Treasure island Industrial Corporations, 550 SCRA 307)

 

55. Solidary Liability.

a) Taken together, an individual employer (principal) (as defined by Article 107) can only be held solidarily liable with the independent contractor or sub-contractor (as provided under Article 109) in the event that the latter fails to pay the wages of its employees (as described in Article 106). Hence, while it is true that the principal was the indirect employer of the complaining employees, it cannot be held liable in the same way as the direct employer in every respect. It is considered as indirect employer only for purposes of unpaid wages. (MERALCO Industrial Engineering Services Corporation vs. NLRC, 548 SCRA 316)

b) Under Articles 106, 107 and 109 of the Labor Code, the joint and solidary liability of the contractor and the principal is mandated to assure compliance with the provisions therein including the statutory minimum wage. The contractor is made liable as direct employer of his employees, and the principal as indirect employer of the said employees in case the contractor is unable to pay them. Payment, which means not only the delivery of money but also the performance in any other manner of obligation, is the operative fact which will entitle any of the solidary debtors to reimbursement for the share which corresponds to each of the letters. (Jaguar Security and Investigation Agency vs. Sales, 552 SCRA 295)

 

56. Strike.

a.) Employees who have no labor dispute with their employer but also, on a day they were scheduled to work, refused to work and instead joined a Welga ng Bayan, commit an illegal work stoppage. Even if the employees joining such welga were considered merely as an exercise of their freedom of expression, assembly, or to petition the government for redress of grievances, the exercise of such right is not absolute. Where there is no showing that the employees notified the employer of their intention, or that they were allowed by the latter, to join the Welga of BAyan, their work stoppage is beyond legal protection.

Reinstatement of a striker, or retention of his employment, despite his participation in an illegal strike, is a management prerogative which the Supreme Court may not supplant. The use of the word “may” in the law (“may be declared to have lost their employemnt status”)  grants to the management that option. (Biflex Phils., Inc. Labor Union vs. Filflex Industrial and Manufacturing Corporation, 511 SCRA 247)

b) The terms “strike” includes not only concerted work stoppage but also slow-downs, mass leaves, sit-downs, attempts to damage, destroy or sabotage plant equipment and facilities, and similar activities. (Sta. Rosa Coca-Cola Plant Employees Union vs. Coca-Cola Bottlers Phils., Inc.. 512 SCRA 437)

c) A sit-down strike, more aptly termed as a “sympathetic strike”, where the striking employees have no demands or grievances of their own, but they strike for the purpose of directly or indirectly assisting others, without direct relation to the advancement of the interest of the strikers (but merely to show sympathy for their co-employees dismissed by the employer), is an illegal strike. (G & S Transport Corporation vs. Infante, 533 SCRA 288)

d) The union’s concerted violation of the Hotel’s Grooming Standards which resulted in the temporary cessation and disruptions of the Hotel’s operations is an unprotected act and should be considered as an illegal strike. (This is a case where the Union members reported to work with closely cropped hair or clearly shaven heads, in violation of

company standards) (NUWHRAIN Dusit Hotel Nikko Chapter vs. Court of Appeals, 570 SCRA 598)

e) Mere membership in a union does not ipso facto mean participation in a strike. Participation in a strike. Participation in a strike and intransigence to a return to work order must be duly proved in order to justify immediate demand in a national interest case. (Calamba Medical Center, Inc. vs. NLRC, 571 SCRA 585)

 

57. Temporary Appointment.

a.) An employee’s appointment as acting principal is merely temporary, or one that is good until another appointment is made to take his place—an “acting appointee” is essentially a temporary appointment, revocable at will. The Court has acknowledged the customary arrangement in private schools to rotate administrative positions, such as dean or principal, among employees, without the employee so appointed obtaining security of tenure with respect to their positions. (Magis Young Achievers’ Learning Center vs. Manalo, 579 SCRA 421)

 

58. Termination of Employment.

The liquidation of the Philippine Veterans Bank by resolution of the Monetary Board was a valid cause of the employees’ separation. The fact that the Bank was rehabilitated by special law, RA 7169, through a restraining of its outstanding liabilities, did not revive the dead relation between the bank and its former employees. (Cornista-Domingo vs. NLRC, 504 SCRA 659)

 

59. Thirteenth-Month Pay.

a.) Salesmen’s commissions, comprising a pre-determined percentage of the selling price of the goods sold by each salesman, were properly included in the term “basic salary” for purposes of computing 13th month pay. These were not overtime pay payments nor profit-sharing payments, nor any other fringe benefit, but a portion of the salary structure which represents automatic increment to the monetary value initially assigned to such unit of work rendered b a salesman. On the other hand, properly excluded from the term basic salary were the commissions paid to medical representatives and rank and file employees as productivity bonus which were generally tied to the productivity or capacity for revenue production of a company, and closely resemble profit-sharing payments and have no clear direct or necessary relation to the amount of work actually done by each use. Moreover, med reps are not paid sales commissions because they are not salesmen. (Reyes vs. NLRC, 529 SCRA 487)

 

 

60. Trade Union Center.

a.) Under the statutory interpretations maxims expression unius est exclusion alterius, the expressions of one thing is the exclusions of another, so that, since, under the Labor Code and its implementing rules, the power granted to labor organizations to directly create a chapter or local through chartering is given to a federation or national labor union, then a trade union center is without authority to charter directly. (San Miguel

Corporation Employees Union – PTGWO vs. San Miguel Packaging Products Employees Unions – PDMP, 533 SCRA 125)

 

61. Unfair Labor Practice

a.) As a general rule, the dismissal of an employee by the company pursuant to a labor union’s demand in _________ with a security clause, with which it merely complied in good faith does not constitute ULP. (NUWHRAIN vs. NLRC, 567 SCRA 291)

b.) ULP refers to acts that violate the workers’ right to _______ without that element, the acts, no matter how unfair, are not ULP.

 

62. Unfair Membership.

a.) While Article 245 of the Labor Code limits the inability to join, form and assist any labor organization to managerial employees, jurisprudence has extended the prohibition to confidential employees or those who, by reason of their positions or nature of work, are required to assist or act in a fiduciary manner to managerial employees and hence are likewise privy to sensitive and highly confidential records. Such confidential employees include bank cashiers, accounting personnel radio and telegraph operators, and personal staff, who may act as spies of either party to a ________.(Standard Chartered Bank Employees Union vs. Standard Chartered Bank, 552 SCRA 284)..

 

61. Unfair Labor Practice.

a.) While Article 245 of the Labor Code limits the inability to join, form and assist any labor organization to managerial employees, jurisprudence has extended the prohibition to confidential employees or those who, by reason of their positions or nature of work, are required to assist or act in a fiduciary manner to managerial employees and hence are likewise privy to sensitive and highly confidential records. Such confidential employees include bank cashiers, accounting personnel radio and telegraph operators, and personal staff, who may act as spies of either party to a _______________. (NUWHRAN vs. NLRC, 567 SCRA 291)

 

63. Union Officers.

a.) For purposes of the law on strike, shop stewards (who according to Black’s Law Dictionary, are union officials who represent the union members in a particular department) are considered as union officers who deserve the penalty of dismissal for joining an illegal strike. (Sta. Rosa Coca-Cola Bottlers Phils., Inc., 512 SCRA 437)

 

64. Union Registration.

a.) The inclusion in a union of disqualified employees is not wrong on the ground of cancellation of union registration, unless and inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections a) and c), Article 239 of the Labor Code as amended by RA 9481. (SS Ventures Internationa, Inc. vs. SS Ventures Labor Union, 559 SCRA 435)

 

65. Unjust Enrichment.

a.)An airline which, at its expense, spends for the training of a pilot to enable him to require a higher level of skill, proficiency, or technical competence, expects to recover the training cost by availing itself of the pilot’s services for a certain period of time, and if that expectations is not fully realized because the pilot resigns before the completion of that period, said pilot cannot refuse to reimburse the costs training without violations the principle of unjust enrichment. (Almario vs. Philippine Airlines, Inc., 532 SCRA 614)

b) The ex gratis benefit given to employees terminates on account of a redundancy program, who were later on ordered reinstated because of the illegality of the termination (even if the issue of reimbursement was raised for the first time in a petition for review before the Supreme Court), should be returned to the employer following the principle against unjust enrichment which is held applicable in labor cases. (Caltex (Phils.), Inc. vs. NLRC, 536 SCRA 125)

 

66. Vicarious Liability.

a.) To sustain claims against employers for the acts of their employees (vicarious or imputed liability), the following must be established: 1) That the employee was chosen by the employer personally or through another; 2) that the services was to be rendered in accordance with the orders which the employer has the authority to give at all times; and 3) that the illicit act of the employee was on the occasion or by reason of the functions assigned to him. To make the employer by reason of the functions assigned to him. To make the employer liable under paragraphs 5 and 6 of Article 2180 of the Civil Code, it must be established that the injurious or tortuous act was committed at the time the employee was performing his functions. For purposes of vicarious liability, employer-employee relationship exists even if the employee was loaned by the employer to another person or entity because control over the employee subsists.

The employee driver’s negligence should not be imported to a fellow employee who only happened to be an occupant of the vehicle. The said passenger was not the master or principal of the driver but only an immediate superior employee. This being so, the doctrine of respondeat superior or qui facit per alium is not properly applicable to him. (Jaime vs. Apostol, 572 SCRA 41)

 

67. Visitorial and Enforcement Powers.

The visitorial and enforcement powers of the Secretary of Labor and Employment under Article 128 of the Labor Code, exercised through his representatives, encompass compliance with all labor standards laws and other labor legislation, regardless of the amount of the claims filed by the workers. Under the same authority, the Regional Director can conduct inspections and check all violations of labor laws, and enforce compliance measures for the benefit of all employees without being compelled to rely on a complaint that has been filed or its allegations.

The mere disagreement by the employer with the findings of the labor officer, or the simple act of presenting controverting evidence, does not automatically divest the DOLE Secretary or any of his authorized representatives, such as Regional Directors, of jurisdiction to exercise their visitorial and enforcement powers. For such divestment, under the exception clause in Article 128 (b), the following elements must concur: 1) The employer contests the findings of the labor relations officer and raises issues thereon; 2) in order to resolve such issues, there is a need to examine evidentiary matters; and 3) such matters are not verifiable in the normal course of

inspections. Evidence consisting of a contract of lease, payroll sheets and quitclaims are verifiable in the normal course of inspection—if not inspected by the inspector, they may be examined by the Regional Director or the Secretary. (Bay Heaven, Inc. vs. Abuan, 560 SCRA 457)

 

 

 

68.  Voluntary Arbitrator’s Decision.

a.) The proper mode of appeal from the voluntary arbitrator’s decision is review under Rule 43 of the 1997 Rules of Civil Procedure, not a petition for review for certiorari. While Section 2 of that rule provides that the same shall not apply to orders issued under the Labor Code, the latter refer only to cases decided by Labor Arbiters which are appealable to the NLRC. (Mora vs. Avesco Marketing Corporation, 571 SCRa 226)

 

 

 

69. Wenphil Doctrine.

a)The SC reaffirmed, in a series of cases including this one, the reward to the complaining employees, of indemnity in the amount of P30,000 each, as nominal damages under the Civil Code, for failure of the employer to comply with the statutory requirements of the due process prior to their dismissal for just cause, following the Wenphil doctrine. (R.B. Michael Press vs.Galit, 545 SCRA 23)

b) Where the dismissal is for just cause, the lack of statutory due process, should not nullify the dismissal or render it illegal or ineffectual, but the employer should indemnify the employee for the violation of his statutory rights, to discourage the abhorrent practice of “dismiss now, pay later.’ (Agullano vs. Christian Publishing, 566 SCRA 353)

 

70. Willful Disobedience.

a.) Even if a faculty member’s failure to obtain the required permission from the school before she engaged in external teaching engagements is a clear transgression of the school’s policy, such misconduct falls below the required level of gravity that would warrant dismissal as a penalty. Willful disobedience, as a just cause of termination, encourages the concurrence of at least two requisites, namely 1) the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude, and 2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties and he has been engaged to discharges. (Moreno vs. San Sebastian College – Recoletos Manila, 550 SCRA 414)

 

b) With respect to serious misconduct or willful disobedience, it is not sufficient that the act or conduct complained of must have been violated some established rules or policies, but it must have been performed with wrongful intent. A crew member of a restaurant who ate a piece of chicken requested from a fellow employee, while on duty and without

proper authorizations, in violation of the company’s meal policy, to ease stomach pains due to hunger, does not warrant dismissal. Her initial suspension for 5 days would have been enough. (Mc Donald’s (Katipunan Branch) vs. Alba, 574 SCRA 427)

LABOR

Back Wages-  Prior to R.A. No. 8042, Overseas Filipino Workers, regardless of contract periods, or the unexpired portions thereof, were treated alike in the computation of their monetary benefits in case of illegal dismissal. The claim was subject to a uniform rule of computation: basic salaries multiplied by the entire unexpired portion of their employment contract.

                That rule of computation was changed by R.A. No. 8042, especially the clause providing limitations in the entitlement to back wages, based on the length of the contract and the unexpired period.

                Such clause is unconstitutional because it violates the OFWs’ right to substantive due process, depriving him of his property, consisting of monetary benefits, without any existing valid governmental purpose.

                An illegally dismissed OFW, therefore , is entitled to his salaries for the entire unexpired period of their contract, pursuant to law and jurisprudence prior to the enactment of R. A. No. 8042.

--Serrano vs. Gallant Maritime Services, Inc., 582-254.

Discrimination- Discrimination is the failure to treat all persons equally when no reasonable distinction can be found between those favoured and those not favoured. There is no discrimination in imposing a condition for approval of an application for vacation leave- the condition being the submission of certain reports within 2 days after the leave, where it is not shown that the complaining employee was the only one subjected to such conditions.

Sugue vs. Triumph International, Inc. 577 – 323.

Government –Owned or –Controlled Corporation- The issue of whether a GOCC falls within the ambit of a public sector or a private sector employer resolves itself into the question of whether or not constitutional, in the 1973 or the 1987 one, was in place at the time the case was decided. Under the former, there is no distinction as to whether the GOCC had an original charter or not- all such corporations were covered by the Civil Service. Under the letter, only the GOCCs which have original charters are so covered.

PALOMA vs. PAL, Inc. 558 -94.

Gross and Habitual neglect- Although the infraction is not habitual, considering the substantial amount lost, it is gross and sufficient to cause dismissal. What was lost in this case was a service motorcycle, with a book value of P46,000.00 which was stolen because the employee concerned failed to lock the steering wheel when he parked it in front of the office.

LBC Express- Metro Manila, Inc. vs. Mateo, 589 -34

Jurisdiction- The NLRC has jurisdiction over a dismissal case where the employee, who was an incorporator and member of the Board of Directors of the employer corporation, and also had an ___ in a project as Principal Engineer, and who lost his position, both in the Board and as Principal Engineer, the case being one in which he is seeking reinstatement as Principal Engineer, praying for back wages, moral damages and attorney’s fees. This is not an intra-corporate dispute but a labor controversy.

Gilles vs. CA, 588 -298.

Leave Privileges—In the grant of vacation leave and sick leave privileges to an employee, the employer is given leeway to improve conditions on entitlement to the same, as the grant of such privileges is not a standard of law but a prerogative of management—it is a mere concession or an act of grace of the employer and not a matter of right on the part of the employee.

Sugue vs. Triumph International , Inc 577-323

Minimum Wage Fixing- A wage order providing an across-the-board  increase to all employees in the ___ concerned, without using either the floor-wage method or the salary-ceiling method, was issued in the excess of authority and therefore void insofar as it prescribed an increase to employees receiving more than the minimum wage but valid with respect to those earning the prevailing wage rate.

Metropolitan Bank and Trust Co., Inc. vs. NWPC, 513—346

Medical and Dental Services—While Article 157 of the Labor Code requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees, there is nothing therein which says that the practitioners so engaged be actually hired as employees. The law, as written, only requires the employer “to retain”, not to employ the medical practitioners mentioned therein. The service, therefore, may be provided by independent contractors.

Escasives vs. Shangri-la’s Mactan Island Resort, 580 –604

Money Claims- Article 291 ( on the 3-year prescriptive period of money claims) covers all money claims from the employer-employee relations and is broader in scope than claims arising from a specific law- it is not limited to money claims recoverable under the Labor Code but applies also to claims of overseas contract workers.

LW Corporations vs. Dupo,  592—465. Generosity

Quitclaim—A quitclaim that fails to indicate the amounts received by the terminated employees should be invalidated, but the amounts actually received by them should be deducted from the remaining amounts of separation pay and other monetary benefits.

--Hotel Enterprises of the Philippines , inc. vs Samahan ng  mga Manggagawa sa Hyatt, 588 –497.

Redundancy—An employer’s good faith in implementing a redundancy program is not necessarily destroyed by availment of the services of an independent contractor to replace the services of the terminated employees. This is justified where using the services of an independent contractor is undertaken to effectuate more economic and efficient methods of production. This is a case involving abolition of jobs contractable under existing laws and jurisprudence—engineering, security, janitorial and laundry services..  HEPI, etc. supra.