Termination Law 2o1s

Definition: "Security of Tenure" is the right of an employee to continue in employment, where

there has been not definite period agreed upon, subject to the condition that no just or

authorized cause supervenes.

We observe Security of Tenure. Other jurisdictions (e.g. USA) follow "Employment at will"

policy.

"Employment at will doctrine" =A common-law rule that an employment contract of indefinite

duration can be terminated by either the employer or the employee at any time for any reason; also

known as terminable at will.

Who is that employee who enjoys "double security of tenure"?

The tenured professor of a tertiary level educational institution. Montemayor v. Araneta

University Foundation, 77 SCRA 321 (1997). He enjoys the security of tenure under the Labor

Code and a second security of tenure by virtue of academic freedom likewise safeguarded by

the Constitution .

"x x x it was pointed out in Garcia v. The Faculty Admission Committee, 68 SCRA 277 {1975L

that academic freedom "is more often identified with the right of a faculty member to pursue

his studies in his particular specialty and thereafter to make known or publish the result of his

endeavors without fear that retribution would be visited on him in the event that his

conclusions are found distasteful or objectionable to the powers that be, whether in the

political, economic, or academic establishments. x x x Tenure is of the essence of such

freedom. Without tenure that assures a faculty member "against dismissal or professional

penalization on grounds other than professional incompetence or conduct that in the judgment

of his colleagues renders him unfit" for membership in the faculty, the academic right becomes

non-existent." {Ibid ., at 327)

What employee enjoys full security of tenure? The regular employee.

Who is a regular employee? [Art. 294 (280)] One who is engaged to perform activities that are

usual and necessary to the usual trade or business of the employer is a regular employee .

Do other employees enjoy security of tenure? Yes. However, they enjoy "limited" or "qualified"

security of tenure.

Classify employees according to security of tenure.

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1. Managerial: D.M. Consunji vs. NLRC, 143 SCRA 204 {1986); MGG Marine Services vs.

NLRC, 259 SCRA 664 {1996) En bane,

2. Regular {Art. 294 {279)

3. Casual {Art. 294 {279)

4. Project: Fegurin vs. NLRC, 120 SCRA 910 {1983)

Failure to report project termination to DOLE: PNCC vs. NLRC, 174 SCRA 191 {1989)

5. Seasonal: Manila Hotel vs. CIR 9 SCRA 184 {1963)

6. Term employment: Brent School vs. Zamora, 181 SCRA 701 {1990)

7. Re-hired after retirement: UST Faculty Union vs. NLRC, 188 SCRA 400 {1990)

8. Former hotel ees hired on trial basis by new owners: Philippine Village Hotel vs. NLRC,

230 SCRA 423 {1994)

9. Probationary: Cebu Royal Plant vs. Deputy Minister, 153 SCRA 38 {1987)

"Dismissal" is cessation of an employment due to a just cause, attributable to the employee.

"Termination" is cessation of an employment due to an authorized cause, which is not the fault

of the employee. Dismissal does not merit separation pay; termination carries with it

separation pay.

What three questions need to be raised in order to determine the legality of a termination or

dismissal? The following: {1) Is there just or authorized cause? {2) Has the procedure outlined

by Labor Code been observed prior to the termination/dismissal? {3) Is the penalty

proportionate to the cause?

What may be the causes for termination or dismissal? They are as follows:

Just Cause [Art. 296 {282)] Authorized Cause [Art. 297 {283)]

1. Serious misconduct/ --retrenchment to prevent loss

willful disobedience. --cessation of operation/closing

2. Gross & habitual --installation of labor saving devices

neglect of ees duties --redundancy

3. Fraud/ willful breach

of trust reposed

4. Commission of crime/

offense against er/

immediate family.

5. Other causes analogous.

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What are the procedural requisites of a valid termination on the grounds of

redundancy?

" ... it is imperative that the employer must comply with the requirements for a valid

implementation of the company's redundancy program, to wit: (a) the employer must

serve a written notice to the affected employees and the DOLE at least one {1) month

before the intended date of retrenchment; (b) the employer must pay the employees a

separation pay equivalent to at least one month pay or at least one month pay for every

year of serice, whichever is higher; (c) the employer must abolish the redundant

positions in good faith; and (d) the employer must set fair and reasonable criteria in

ascertaining which positions are redundant and may be abolished." Lopez Sugar Corp. v. Franco, 458 SCRA 515 at 529 {2005) quoted in General Milling Corporation v. Viajar,

689 SCRA 598, at 608 (2013).

What are the procedural requisites of a valid dismissal on the grounds of just cause?

Perez and Doria v. PT&T, et al.,584 SCRA 110 (April 7, 2009), EN BANC, Corona, J.

"We note a marked difference in the standards of due process to be followed as prescribed in the Labor Code and its implementing rules. The Labor Code (Art. 277[b]), on the one hand, provides that an employer must provide the employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires x x x. The omnibus rules implementing the Labor Code, on the other hand, require a hearing and conference during which the employee concerned is given the opportunity to respond to the charge, present his evidence or rebut the evidence presented against him (ld., at 120-121)."

"x x x Therefore, while the phrase "ample opportunity to be heard" may in fact include an actual hearing, it is not limited to a formal hearing only. In other words, the existence of an actual, formal"trial-type" hearing, although preferred, is not absolutely necessary to satisfy the employee's right to be heard. X x x (ld., at 124)."

"In sum, the following are the guiding principles in connection with the hearing requirement in dismissal cases:

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(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense} whether in a hearing} conference or some other fair} just and reasonable way.

(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it1 or when similar circumstances justify it.

(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference}} requirement in the implementing rules and regulations (ld. 1 at 127)."

Nota Bene: [It is surprising that the Supreme Court does not quote from a long line of decisions starting from Rabago v. NLRCJ 200 SCRA 158 (1991); Rase v. NLRC1 237 SCRA 523 (1994); Libres v. NLRCJ SCRA (1999). Those cases} and many more thereafter} held that personal confrontation and cross examination cannot be invoked as a matter of right in procedural due process of employee dismissal cases. The right to cross-examine belongs to the accused only in criminal prosecutions by the "people/} by the State. In Manggagawa ng Komunikasyon v. NLRCJ 206 SCRA109 (1992L the Supreme Court J however} conceded that "actual adversarial proceedings may be necessary for clarification purposes or when there is need to propound searching questions to unclear witnesses." That has to do with the duty of the trier of facts} usually the labor arbiter} to ascertain whether or not there is 'substantial evidence} supporting a claim.]

Subsequent Applications of the Perez Ruling:

TECHNOL EIGHT PHILIPPINES CORPORATION v. NLRC AND DENNIS AMULAR, L- 187605, Apri/13, 2010, 2na Div., Brion, J.

[The case refers to 2 rank-and-file employees mauling a supervisor outside the workplace, and not within working hours]

The labor arbiter ruled that Technol failed to afford Amular procedural due process, since he was not able to present his side regarding the incident; at the time he was called to a hearing, he had already filed the illegal dismissal complaint. The NLRC, on the other hand, held that the memorandum terminating Amular' s employment was a mere formality, an afterthought designed to evade company

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liability since Amular had already filed an illegal dismissal case against Techno I.

We disagree with these conclusions. The notice of preventive suspension/notice of discharge served on Amular and Ducay required them to explain within forty-eight ( 48) hours why no disciplinary action should be taken against them for their involvement in the mauling incident. Amular submitted two written statements: the first received by the company on May 19, 2002 and the other received on May 20, 2002. On June 8, 2002, Technol management sent Amular a memorandum informing him of an administrative hearing on June 14, 2002 at 10:00 a.m., regarding the charges against him. At the bottom left hand comer of the memorandum, the following notation appears: "accept the copy of notice but refused to receive, he will study first." A day before the administrative hearing or on June 13, 2002, Amular filed the complaint for illegal suspension/dismissal and did not appear at the administrative hearing. On July 4, 2002, the company sent Amular a notice of dismissal.

What we see in the records belie Amular's claim of denial of procedural due process. He chose not to present his side at the administrative hearing. In fact, he avoided the investigation into the charges against him by filing his illegal dismissal complaint ahead of the scheduled investigation. Under these facts, he was given the opportunity to be heard and he cannot now come to us protesting that he was denied this opportunity. To belabor a point the Court has repeatedly made in employee dismissal cases, the essence of due process is simply an opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law.

Updates on "Immediate Reinstatement"

(a) Pioneer Texturizing Corp. v. NLRC, 345 Phil. 1057 (1997) established the doctrine that an order or award for reinstatement from the Labor Arbiter is self­excutory, meaning that it does not require a writ of execution, much less a motion for its issuance. (This is the basis of the current NLRC Rules of Procedure that leaves the enforcement of the reinstatement order to the employer who is given the duty to submit a compliance report within 10 days from receipt of the decision. The Labor Arbiter issues a writ of execution only when the employer disobeys the above directive or refuses to reinstate the dismissed employee. Rule IX Section 6 of NLRC Rules)

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(c) The cases of Roquero v. Philippine Airlines, {G.R. No. 152329, 401 SCRA 424, April22, 2003}, International Container Terminal Services, Inc. (JCTSI) v. NLRC, {G.R. No. 115452, 300 SCRA 335, December 21, 1998} and Kimberly Clark (Phil.), Inc. v. Facundo, (G.R. No. 144885, July 26, 2006} are authorities for the position that notwithstanding the reversal by the NLRC of the labor arbiter's order of reinstatement, the dismissed employee is still entitled to the wages accruing during the pendency of the appeal.

(d) Genuine v. NLRC,539 SCRA 342 (Dec. 4, 2007) has been explicitly repealed by Garcia et al., v. PAL, L-164856, Jan. 20, 2009. En Bane, Carpio-Morales, J.

The Garcia ruling is explained better in the latest case involving UIC of Davao City.

College of the Immaculate Conception v. NLRC & Atty. Marius F. Carlos, Ph.D., L-

167563, March 22, 2010, 3rd Div., Peralta, J., 616 SCRA 299

In Garcia v. Philippine Airlines, Inc., (January 20, 2009, 576 SCRA 479) the Court made a very enlightening discussion on the aspect of reinstatement pending appeal:

On this score, the Court's attention is drawn to seemingly divergent decisions concerning reinstatement pending appeal or, particularly, the option of payroll reinstatement. On the one hand is the jurisprudential trend as expounded in a line of cases including Air Philippines Corp. v. Zamora, while on the other is the recent case of Genuino v. National Labor Relations Commission. At the core of the seeming divergence is the application of paragraph 3 of Article 223 of the Labor Code x x x

The view as maintained in a number of cases is that:

x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is

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entitled to such, more so if he actually rendered services during the period. (Emphasis in the original; italics and underscoring supplied)

In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith.

The opposite view is articulated in Genuino which states:

If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then 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 it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from [his] employer under existing laws, collective bargaining agreement provisions, and company practices. However, 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.

Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the folio of the September 3, 1994 NLRC Decision. (Emphasis, italics and underscoring supplied)

It has thus been advanced that there is no point in releasing the wages to petitioners since their dismissal was found to be valid, and to do so would constitute unjust enrichment.

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Prior to Genuino, there had been no known similar case containing a dispositive portion where the employee was required to refund the salaries received on payroll reinstatement. In fact, in a catena of cases, the Court did not order the refund of salaries garnished or received by payroll-reinstated employees despite a subsequent reversal of the reinstatement order.

The dearth of authority supporting Genuino is not difficult to fathom for it would otherwise render inutile the rationale of reinstatement pending appeal.

xxxx

x x x Then, by and pursuant to the same power

{police power), the State may authorize an immediate

implementation, pending appeal, of a decision

reinstating a dismissed or separated employee since that

saving act is designed to stop, although temporarily

since the appeal may be decided in favor of the

appellant, a continuing threat or danger to the survival

or even the life of the dismissed or separated employee

and his family.

In the same case, the Court went on to discuss the illogical and unjust effects of the "refund doctrine" erroneously espoused in Genuine:

Even outside the theoretical trappings of the discussion and into the mundane realities of human experience, the "refund doctrine" easily demonstrates how a favorable decision by the Labor Arbiter could harm, more than help, a dismissed employee. The employee, to make both ends meet, would necessarily have to use up the salaries received during the pendency of the appeal, only to end up having to refund the sum in case of a final unfavorable decision. It is mirage of a stop-gap leading the employee to a risky cliff of insolvency.

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Advisably, the sum is better left unspent. It becomes more logical and practical for the employee to refuse payroll reinstatement and simply find work elsewhere in the interim, if any is available. Notably, the option of payroll reinstatement belongs to the employer, even if the employee is able and raring to return to work. Prior to Genuino, it is unthinkable for one to refuse payroll reinstatement. In the face of the grim possibilities, the rise of concerned employees declining payroll reinstatement is on the horizon.

Further, the Genuino ruling not only disregards the social justice principles behind the rule, but also institutes a scheme unduly favorable to management. Under such scheme, the salaries dispensed pendente lite merely serve as a bond posted in installment by the employer. For in the event of a reversal of the Labor Arbiter's decision ordering reinstatement, the employer gets back the same amount without having to spend ordinarily for bond premiums. This circumvents, if not directly contradicts, the proscription that the "posting of a bond [even a cash bond] by the employer shall not stay the execution for reinstatement."

In playing down the stray posture in Genuino requiring the dismissed employee on payroll reinstatement to refund the salaries in case a final decision upholds the validity of the dismissal, the Court realigns the proper course of the prevailing doctrine on reinstatement pending appeal vis-a-vis the effect of a reversal on appeal.

X X X X

The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. x x x

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Thus, the Court resolved the impasse by reaffirming the principle earlier enunciated in Air Philippines Corporation, that an employee cannot be compelled to reimburse the salaries and wages he received during the pendency of his appeal, notwithstanding the reversal by the NLRC of the LA's order of reinstatement. In this case, there is even more reason to hold the employee entitled to the salaries he received pending appeal, because the NLRC did not reverse the LA's order of reinstatement, but merely declared the correct position to which respondent is to be reinstated, i.e., that of full-time professor, and not as Dean.

Petitioner (UIC) alleged that due to the unreasonable demand of the respondent that he be reinstated as a Dean, instead of a faculty member, petitioner was constrained to reinstate him in the payroll only. Thus, petitioner argued that when the respondent imposed uncalled for conditions for his reinstatement, his claim for reinstatement pending appeal was effectively nullified. We rule that respondent did not impose any unreasonable condition on his reinstatement as a Dean, because he was merely demanding that he be reinstated in the manner set forth by the LA in the writ of execution. Moreover, it bears stressing that the manner of immediate reinstatement, pending appeal, or the promptness thereof is immaterial, as illustrated in the following two scenarios:

Situation No. 1. (As in the cases of Air Philippines Corporation and International Container Terminal Services, Inc.) The LA ruled in favor of the dismissed employee and ordered his reinstatement. However, the employer did not immediately comply with the LA's directive. On appeal, the NLRC reversed the LA and found that there was no illegal dismissal. In this scenario, We ruled that the employee is entitled to payment of his salaries and allowances pending appeal.

Situation No. 2. (As in the present case) The LA ruled in favor of the dismissed employee and ordered the latter's reinstatement. This time, the employer complied by reinstating the employee in the payroll. On appeal, the LA's ruling was reversed, finding that there was no case of illegal dismissal but merely a temporary sanction, akin to a suspension. Here, We also must rule that the employee cannot be required to reimburse the salaries he received because if he was not reinstated in the payroll in the first place, the ruling in situation no. 1 will

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apply, i.e., the employee is entitled to payment of his salaries and allowances pending appeal.

Thus, either way we look at it, at the end of the day, the employee gets his salaries and allowances pending appeal. The only difference lies as to the time when the employee gets it.

(e) Immediate Reinstatement in Art. 263{g) 11Return to Work." Latest Cases.

University of Immaculate Conception, Inc. vs. Secretary, 448 SCRA 190 (Jan.14 2005}, l 5

t Div., Azcuna, J. Issue: Can the Secretary of DOLE, upon assumption of jurisdiction of a labor dispute (Art. 263{g}}, order the employer to reinstate employees terminated by the employer even if those terminated employees are not part of the bargaining unit and their termination is covered by a decision of the voluntary arbitrator, which decision has become final and executory?

YES, by virtue of the over-arching interest of the state to restore the status quo ante 6e[[um. (the employees concerned were ordered reinstated payroll wise).

PLOT vs. Manggagawa ng Komunikasyon sa Pilipinas, L-162783, July 14, 2005, 463 SCRA 418, 2nd Div., Chico-Nazario, J., The Secretary of Labor assumed jurisdiction of the dispute (Art.263(g)) and issued a return to work order to all striking workers "except those who were terminated due to redundancy." The union struck on 23 Dec. 2002 to protest PLOT's redundancy program. On Dec. 31, 2002, 383 union members (telephone operators) were terminated pursuant to the redundancy program. Most of the telephone workers had received their separation benefits, which were in excess of what Art. 283 mandated.

The union filed a Motion for Reconsideration of the Secretary's Return-to-work Order. The Secretary certified the labor dispute to the NLRC.

Held: Return to work order must cover ALL the striking workers. That includes all the telephone workers, even those who had received their termination benefits.

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Other causes:

1. [Art 284] Disease. Villaruel v. Yeo Han Guan, 650 SCRA 64 (2011}

2. [287] Retirement. Padillo v. Rural Bank of Nabunturan, L-19938, January 21, 2013; 689

SCRA 53. "Notably, these age and tenure requirements are cumulative and non­

compliance with one negates the employee's entitlement to the retirement benefits

under Article 300 of the Labor Code altogether." (Ibid., at 65}

3. [Sec. 66] Omnibus Election Code. PNOC-EDC v NLRC, 222 SCRA 831 (1993}

4. Conflict of Interest [Manila Broadcasting v. NLRC, 294 SCRA 476], Ymbong v. ABS-CBN,

667 SCRA 682 {2012}

5. When continuation of employment prohibited by law [Great Pacific Life v. NLRC, 150

SCRA 601 {1987}]

6. Sexual harassment. Villarama v. NLRC, 236 SCRA 280 {1994}

7. Resignation Phii.Overseas Drilling v. Minister, 146 SCRA 79 {1986}

8. Permanent disability Alpha Ship Management Corporation, et al., v. Eleosis V. Calo, L-

192034, January 13, 2014, 2nd Div., del Castillo. How is a seaman's permanent disability

determined, and by whom?

9. Detention by Military without basis merely suspends employment, not terminates the

same. Magtoto v. NLRC, 140 SCRA 58 (1985}

10. CARL (new case NFL v. NLRC, 317 SCRA 158 {2000}

11. Constructive Dismissal. OSS Security v. NLRC, 325 SCRA 157 {2000}; Dimagan v.

Dacworks United, Inc., et. al., 661 SCRA 438 {2011}.

12. Merger or consolidation. BPI v. BPI Employees Union-Davao Chapter-Federation of

Unions in BPI Unibank, L-154301, October 19, 2011, En Bane, Leonardo-de Castro, J. 659

SCRA 817.

13. Union Officers who knowingly participate in an illegal strike; union members for

committing illegal acts during a strike. Jackbilt Industries, Inc. v, Jackbilt

Employees Workers Union, 581 SCRA 291 (March 20, 2009}, 1st Div.,

Corona, J.

14. Union officers & members who knowingly participate in a Prohibited Strike (Art. 278 (a}

{264{a}] St. Scholastica's College v. Torres. G.R. No. 100158, 29 June 1992, 210

SCRA 565

15. Expulsion from Union and Union Security Clause violation. Lirag Textiles v. Blanco, 109

SCRA 87.

16. Duncan v. Glaxo-Welcome, 438 SCRA 158 (2004} Validity of Exogamy policy

17. Star Paper v. Simbol487 SCRA 228 {2006} Invalidity of Exogamy policy

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Part 11--Cases of Causes of Dismissal Not Found in Book VI of the Labor Code.

1. Section 66 of the Omnibus Election Code: PNOC Energy Dev. Corp. v.

NLRC, 1st Div., Narvassa, C.J., 222 SCRA 231 (May 31, 1993)

ISSUE: whether an employee in a government owned or controlled

corporation without original charter (and therefore not covered by Civil

Service Law) nevertheless falls within the scope of Section 66 of the

Omnibus Election Code.

"Section 66. Candidates holding appointive office or position--- Any person

holding a public appointive office or position including active members of

the Armed Forces of the Philippines, and officers and employees in

government-owned or controlled corporations, shall be considered ipso

facto resigned from his office upon the filing of his certificate of candidacy."

Held: "x x x Section 66 of the Omnibus Election Code applies to officers

and employees in government-owned or controlled corporations, even if

they do not fall under the Civil Service Law but under the Labor Code. In

other words, Section 66 constitutes just cause for termination of

employment in addition to those set forth in the Labor Code, as amended.

{ld., at 845)"

2. Acceptance of incompatible office: Manila Broadcasting Co. v. NLRC, 2nd

Div., Mendoza, J., 294 SCRA 486 {1998)

The Court approved of the company policy.

"What is involved in this case is an unwritten company policy considering

any employee who files a certificate of candidacy for any elective or local

office as resigned from the company. Although ll(b) of R.A. No. 6646 does

not require mass media commentators and announcers such as private

respondent to resign from their radio or TV stations but only to go on leave

for the duration of the campaign period, we think that the company may

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nevertheless validly require them to resign as a matter of policy. In this

case, the policy is justified on the following grounds:

"Working for the government and the company at the same time is clearly

disadvantageous and prejudicial to the rights and interest not only of the

company but the public as well. In the event an employee wins in an

election, he cannot fully serve, as he is expected employers, obviously

detrimental to the interest of both the government and the private

employer.

In the event the employee loses in the election, the impartiality and cold

neutrality of an employee as broadcast personality is suspect, thus readily

eroding and adversely affecting the confidence and trust of the listening

public to employer's station." (petition, rolla, p. 18)

These are valid reasons for petitioner. No law has been cited by

private respondent prohibiting a rule such as that in question. Private

respondent cites the Local Government Code, #90(b) of which provides that

"Sanggunian members may practice their profession, engage in any

occupation, or teach in schools except during session hours." This provision,

however, is merely permissive and does not preclude the adoption of a

contrary rule, such as that in question. The company policy is reasonable

and not contrary to law." (ld., at 490-491).

Note: Because there was a doubt as to whether the policy was properly

promulgated and made know to all employees, and because he was found

to be in good faith in filing his certificate of candidacy and not resigning

after doing so, respondent was ordered reinstated with qualified

backwages. (ld., at 295)

3. Union Officers who knowingly participate in an Illegal Strike (Art.

264(a)).

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Jackbilt Industries, Inc. v, Jackbilt Employees Workers Union, 581 SCRA 291 (March 20, 2009), 1st Div., Corona, J.

Issue: whether or not the filing of a petition with the labor arbiter to declare a strike illegal is a condition sine qua non for the valid termination of employees who commit an illegal act in the course of such strike.

[RATIO] "The principle of conclusiveness of judgment, embodied in Section 47(c), Rule 39 of the rules of Court, holds that the parties to a case are bound by the findings in a previous judgment with respect to matters actually raised and adjudged therein."

"Article 264(e) of the Labor Code prohibits any person engaged in picketing from obstructing the free ingress to and egress from the employer's premises. Since respondent was found in the July 17, 1998 decision of the NLRC to have prevented the free entry into and exit of vehicles from petitioner's compound, respondent's officers and employees clearly committed illegal acts in the course of the March 9, 1998 strike.

The use of unlawful means in the course of a strike renders such strike illegal. Therefore, pursuant to the principle of conclusiveness of judgment, the March 9, 1998 strike was ipso facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary.

Consequently, we uphold the legality of the dismissal of respondent's officers and

employees. Article 264 of the Labor Code further provides that an employer may

terminate employees found to have committed illegal acts in the course of a

strike. Petitioner clearly had the legal right to terminate respondent's officers and

employees (ld., at 299-300)."

4. Employees who knowingly violate the union security clause

stipulated in the CBA (Art. 248 (e))

Historical Note: Pili v. NLRC, 217 SCRA 338 (1993)

Salunga v. CIR, 21 SCRA 216 (1967)

Malayang Samahan v. Ramos, 326 SCRA 428 (2000)

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General Milling Corp. v. Casio et al., L-149552, March 10, 2010, 1st Div., Leonardo-de Castro, J.

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

There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its good standing as a union member.

It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to terminate the employment of Casio, eta/. as a necessary consequence of their expulsion from the union.

It is the third requisite - that there is sufficient evidence to support the decision of IBM-Local 31 to expel Casio, eta/.- which appears to be lacking in this case. X x x

The failure of GMC to make a determination of the sufficiency of evidence supporting the decision of IBM-Local 31 to expel Casio, et a/. is a direct consequence of the non-observance by GMC of procedural due process in the dismissal of employees.

As a defense, GMC contends that as an employer, its only duty was to ascertain that IBM-Local 31 accorded Casio, et a/. due process; and, it is the finding of the company that IBM-Local 31 did give Casio, eta/. the opportunity to answer the charges against them, but they refused to avail themselves of such opportunity.

This argument is without basis.

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The Court has stressed time and again that allegations must be proven by sufficient evidence because mere allegation is definitely not evidence. Once more, in Great Southern Maritime Services Corporation. v. Acuna, the Court declared:

Time and again we have ruled that in illegal dismissal cases like the present one,

the onus of proving that the employee was not dismissed or if dismissed, that the

dismissal was not illegal, rests on the employer and failure to discharge the same would

mean that the dismissal is not justified and therefore illegal. Thus, petitioners must not

only rely on the weakness of respondents' evidence but must stand on the merits of

their own defense. A party alleging a critical fact must support his allegation with

substantial evidence for any decision based on unsubstantiated allegation cannot

stand as it will offend due process. x x x. (Emphasis supplied .)

Latest Application of the General Milling Doctrine: PICOP RESOURCES,

INCORPORATED (PRJ) v. TANECA, et. al., L-160828, August 9, 2010, 2nd Div.,

PERALTA,J.

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

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

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

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

17

--~-

PRI alleged that respondents were terminated from employment based on the alleged acts of disloyalty they committed when they signed an authorization for the Federation of Free Workers (FFW) to file a Petition for Certification Election among all rank-and-file employees of PRI. It contends that the acts of respondents are a violation of the Union Security Clause, as provided in their Collective Bargaining Agreement.

We are unconvinced.

We are in consonance with the Court of Appeals when it held that the mere signing of the authorization in support of the Petition for Certification Election of FFW on March 19, 20 and 21, or before the "freedom period/' is not sufficient ground to terminate the employment of respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing in the records would show that respondents failed to maintain their membership in good standing in the Union. Respondents did not resign or withdraw their membership from the Union to which they belong. Respondents continued to pay their union dues and never joined the FFW.

Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization letter to file a petition for certification election as they signed it outside the freedom period. However, we are constrained to believe that an "authorization letter to file a petition for certification election" is different from an actual "Petition for Certification Election." Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW was filed only on May 18, 2000. Thus, it was within the ambit of the freedom period which commenced from March 21, 2000 until May 21, 2000. Strictly speaking, what is prohibited is the filing of a petition for certification election outside the 60-day freedom period . This is not the situation in this case. If at all, the signing of the authorization to file a certification election was merely preparatory to the filing of the petition for certification election, or an exercise of respondents' right to self-organization.

Moreover, PRI anchored their decision to terminate respondents' employment on Article 253 of the Labor Code which states that "it shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a

18

new agreement is reached by the parties." It claimed that they are still bound by the Union Security Clause of the CBA even after the expiration of the CBA; hence, the need to terminate the employment of respondents.

Petitioner's reliance on Article 253 is misplaced. The provision of Article 256 of the Labor Code is particularly enlightening.

It reads: Article 256. Representation issue in organized establishments. - In organized

establishments, when a verified petition questioning the majority status of the

incumbent bargaining agent is filed before the Department of Labor and Employment

within the sixty-day period before the expiration of a collective bargaining agreement,

the Med-Arbiter shall automatically order an election by secret ballot when the verified

petition is supported by the written consent of at least twenty-five percent (25%) of all

the employees in the bargaining unit to ascertain the will of the employees in the

appropriate bargaining unit. To have a valid election, at least a majority of all eligible

voters in the unit must have cast their votes. The labor union receiving the majority of

the valid votes cast shall be certified as the exclusive bargaining agent of all the workers

in the unit. When an election which provides for three or more choices results in no

choice receiving a majority of the valid votes cast, a run-off election shall be conducted

between the labor unions receiving the two highest number of votes: Provided, That the

total number of votes for all contending unions is at least fifty per cent (50%) of the

number of votes cast.

At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for

certification election is filed.

Applying the same provision, it can be said that while it is incumbent for

the employer to continue to recognize the majority status of the incumbent

bargaining agent even after the expiration of the freedom period, they could only

do so when no petition for certification election was filed. The reason is, with a

pending petition for certification, any such agreement entered into by

management with a labor organization is fraught with the risk that such a labor

union may not be chosen thereafter as the collective bargaining representative.

The provision for status quo is conditioned on the fact that no certification

election was filed during the freedom period. Any other view would render

nugatory the clear statutory policy to favor certification election as the means of

ascertaining the true expression of the will of the workers as to which labor

organization would represent them.

19

In the instant case, four {4) petitions were filed as early as May 12, 2000. In fact, a petition for certification election was already ordered by the Med-Arbiter of DOLE Caraga Region on August 23, 2000. Therefore, following Article 256, at the expiration of the freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent does not hold true when petitions for certification election were filed, as in this case.

Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute a bar to a filing of a petition for certification election. When there is a representational issue, the status quo provision in so far as the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the union members will be forced to maintain membership by virtue of the union security clause existing under the CBA and, thereafter, support another union when filing a petition for certification election. If we apply it, there will always be an issue of disloyalty whenever the employees exercise their right to self-organization. The holding of a certification election is a statutory policy that should not be circumvented, or compromised.

Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their freedom to choose who should be their bargaining representative is of paramount importance. The fact that there already exists a bargaining representative in the unit concerned is of no moment as long as the petition for certification election was filed within the freedom period. What is imperative is that by such a petition for certification election the employees are given the opportunity to make known who shall have the right to represent them thereafter. Not only some, but all of them should have the right to do so. What is equally important is that everyone be given a democratic space in the bargaining unit concerned.

We will emphasize anew that the power to dismiss is a normal prerogative of the employer. This, however, is not without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee, because it affects not only his position but also his means of livelihood. Employers should, therefore,

20

respect and protect the rights of their employees, which include the right to labor.

An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits, or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision. Moreover, respondents, having been compelled to litigate in order to seek redress for their illegal dismissal, are entitled to the award of attorney's fees equivalent to 1 0% of the total monetary award.

5. Closure of Plantation due to CARP (RA 6657): NFL v. NLRC, 327 SCRA

158 {2000), 2nd Div., De Leon, Jr., J.

"The Patalon Coconut Estate was closed down because a large portion of

the said estate was acquired by the DAR pursuant to the CARP. Hence, the

closure of the Patalon Coconut Estate was not effected voluntarily by

private respondents who even filed a petition to have said estate exempted

from the coverage of RA 6657. Unfortunately, their petition was denied by

the Department of Agrarian Reform. Since the closure was due to the act

of the government to benefit the petitioners, as members of the Patalon

Estate Agrarian Reform Association, by making them agrarian lot

beneficiaries of said estate, the petitioners are not entitled to separation

pay. The termination of their employment was not caused by the private

respondents. The blame, if any, for the termination of petitioners'

employment can even be laid upon the petitioner-employees themselves

inasmuch as they formed themselves into a cooperative, PEARA, ultimately

to take over, as agrarian lot beneficiaries, of private respondents' landed

estate pursuant to RA 6657. The resulting closure of the business

21

establishment, Patalon Coconut Estate, when it was placed under CARP,

occurred through no fault of the private respondents." {ld., at 265-266)

6. Exogamy Policy: Duncan Assn. of Detailmen-PTGWO v. Glaxo-Welcome,

438 SCRA 343, 2nd Div., Tinga, J., {Sept. 7, 2004)

ISSUE: Whether or not an Exogamy Policy of a pharmaceutical employer

that prohibits its employees from marrying employees of a competitor

company is valid.

Definition of Exogamy: It is a rule requiring selection of a marriage partner

from outside a particular group.

Glaxo-Welcome's Exogamy policy as incorporated in the employment

contract read: 1110. You agree to disclose to management any existing or

future relationship you may have, either by consanguinity or affinity with

co-employees or employees of competing drug companies. Should it pose

a possible conflict of interest in management discretion, you agree to

resign voluntarily from the Company as a matter of Company policy {ld.,

at 351)"

Ruling:

"The prohibition against personal or marital relationships with employees

of competitor companies upon Glaxo's employees is reasonable under the

circumstances because relationships of that nature might compromise the

interests of the company. In laying down the assailed company policy,

Glaxo only aims to protect its interests against the possibility that a

competitor company will gain access to its secrets and procedures {ld., at

353)."

22

"The Court of Appeals also correctly noted that the assailed company policy

which forms part of respondent's Employee Code of Conduct and of its

contracts with its employees, such as that signed by Tecson, was made

known to him prior to his employment. Tecson, therefore, was aware of

that restriction when he signed his employment contract and when he

entered into a relationship with Bettsy. Since Tecson knowingly and

voluntarily entered into a contract of employment with Glaxo, the

stipulations therein have the force of law between them and, thus, should

be complied with in good faith." He is therefore stopped from questioning

said policy.

"The Court finds no merit in petitioners' contention that Tecson was

constructively dismissed when he was transferred from the Camarines

Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan del

Sur sales area, and when he was excluded from attending the company's

seminar on new products which were directly competing with similar

products manufactured by Astra. Constructive dismissal is defines as a

quitting, an involuntary resignation resorted to when continued

employment becomes impossible, unreasonable, or unlikely; when there is

a demotion in rank or diminution in pay; or when a clear discrimination,

insensibility or disdain by an employer becomes unbearable to the

employee." None of these conditions are present in the instant case (ld., at

355-356)."

In line with the Duncan-Giaxo-Welcome ruling, it is relevant to note that

ten years earlier the Court approved of an employer's Anti-Competition

Clause stipulated in an employee's contract.

In Dai-Chi Electronics Manufacturing Corp. v. Villarama, Jr., 238 SCRA

267(1994) the Anti-Competition Clause read thus:

"That for a period of two (2} years after termination of service from

EMPLOYER, EMPLOYEE shall not in any manner be connected, and/or

23

employed, be a consultant and/or be an informative body directly or

indirectly, with any business firm, entity or undertaking engaged in a

business similar to or in competition with that of the EMPLOYER" (ld., at

268).

"Petitioner claimed that private respondent became an employee of Angel

Sound Philippines Corporation, a corporation engaged in the same line of

business as that of petitioner, within two years from January 30, 1992, the

date of private respondent's resignation from petitioner's employ.

Petitioner further alleged that private respondent is holding the position of

Head of the Material Management Control Department, the same position

he held while in the employ of petitioner (ld., at 269)."

On the strength of Singapore Airlines Limited v. Pano, 122 SCRA 671

(1983), the Court ordered the court a quo to hear and decide the case

ruling that the regular courts, not the labor arbiter, had jurisdiction over

the employer's claim for liquidated damages (P100,000).

7. No-spouse Employment Policy: Star Paper v. Simbol, 487 SCRA 228 (April

12, 2006), 2nd Div., Puno, J.

ISSUE: "WHETHER THE POLICY OF THE EMPLOYER BANNING SPOUSES

FROM WORKING IN THE SAME COMPANY VIOLATES THE RIGHTS OF THE

EMPLOYEE UNDER THE CONSTITUTION AND THE LABOR CODE OR IS A

VALID EXERCISE OF MANAGEMENT PREROGATIVE (ld., at 233)."

The Policy read: "1. New applicants will not be allowed to be hired if in case

he/she has [a] relative, up to [the]3rd degree of relationship, already

employed by the company. ["anti-nepotism employment policy" (p.239)]

2. In case of two of our employees (both singles [sic], one

male and another female) developed a friendly relationship during the

course of their employment and then decided to get married, one of them

24

should resign to preserve the policy stated above (ld. 1 at 234). 11 [labeled by

the Court as "no-spouse employment policy// (p.239)]

"x x x [C]ourts also find the no-spouse employment policy invalid for

failure of the employer to present any evidence of business necessity other

than the general perception that spouses in the same workplace might

adversely affect the business. They hold that the absence of such a bona

fide occupational qualification invalidates a rule denying employment of

the other spouse in the same office. x x x (ld. 1 at 242)

"We note that since the finding of a bona fide occupational qualification

justifies an employer1s no-spouse rule1 the exception is interpreted strictly

and narrowly by these state courts. There must be a compelling business

necessity for which no alternative exists other than the discriminatory

practice. To justify a bona fide occupational qualification/ the employer

must prove two factors: (1) that the employment qualification is

reasonably related to the essential operation of the job involved; and/ (2)

that there is a factual basis for believing that all or substantially all persons

meeting the qualification would be unable to properly perform the duties

of the job (ld .1 at 242-243). 11

XXX

"In the recent case of Duncan Association of Detailman- PTGWO and Pedro

Tecson v. Glaxo Wei/come Philippines/ Inc./ we passed on the validity of the

policy of a pharmaceutical company prohibiting its employees from

marrying employees of any competitor company. We held that Glaxo has a

right to guard its trade secrets, manufacturing formulas, marketing

strategies and other confidential programs and information from

competitors. We considered the prohibition against personal or marital

relationships with employees of competitor companies upon Glaxds

employees reasonable under the circumstances because relationships of

that nature might compromise the interests of Glaxo. In laying down the

25

assailed company policy, we recognized that Glaxo only aims to protect its

interests against the possibility that a competitor company will gain access

to its secrets and procedures.

"The requirement that a company policy must be reasonable under the

circumstances to qualify as a valid exercise of management prerogative was

also at issue in the 1997 case of Philippine Telegraph and Telephone

Company v. NLRC. In said case, the employee was dismissed in violation of

petitioner's policy of disqualifying from work any woman worker who

contracts marriage. We held that the company policy violates the right

against discrimination afforded all women workers under Article 136 of the

Labor Code. x x x (ld., at 243:.244)

"The cases of Duncan and PT & T instruct us that the requirement of

reasonableness must be clearly established to uphold the questioned

employment policy. The employer has the burden to prove the existence of

a reasonable business necessity. The burden was successfully discharged in

Duncan but not in PT & T. We do not find a reasonable business necessity in

the case at bar. x x x (ld., at 244)"

B. Anti-Sexual harassment Act of 1995 (RA 7877): Domingo v. Rayala, 546

SCRA 90 {2008), 3rd Div., Nachura, J.

ISSUE: For sexual harassment to be committed is it essential that there be a

demand, request, or requirement of a sexual favor as a condition for

continued employment or for promotion to a higher position?

NO. "It is enough that the acts of respondent's (NLRC Chairman Rogelio I.

Rayala) result in creating an intimidating, hostile or offensive environment

for the employee (ld., at 115)"

What, then, did Rayala do which constituted sexual harassment?

26

"(But) it is not necessary that the demand, request or requirement of a

sexual favor be articulated in a categorical oral or written statement. It may

be discerned, with equal certitude, from the acts of the offender. Holding

and squeezing Domingo's shoulders, running his fingers across her neck and

tickling her ear, having inappropriate conversations with her, giving her

money allegedly for school expenses with a promise of future privileges,

and making statements with unmistakable sexual overtones- all these acts

of Rayala resound with deafening clarity the unspoken request for a sexual

favor (ld., at 114)".

The Court then differentiates the case of Aquino v. Acosta, 380 SCRA 1

(2002), En Bane, Sandovai-Gutierrez, J., from that of Rayala.

"While in Aquino, the Court interpreted the acts (of Judge Acosta) as casual

gestures of friendship and camaraderie, done during festive or special

occasions and with other people present, in the instant case, Rayala's acts

of holding and squeezing Domingo's shoulders, running his fingers across

her neck and tickling her ear, and the inappropriate comments, were all

made in the confines of Rayala's office when no other IT)embers of his staff

were around. More importantly, and a circumstance absent in Aquino,

Rayala's acts, as already adverted to above, produced a hostile work

environment for Domingo, as shown by her having reported the matter to

an officemate and, after the last incident, filing for a leave of absence and

requesting transfer to another unit (ld., at 116-117)".

Nota Bene: Rayala's case was decided in division; Acosta's case En Bane.

Why?

27

9. For Schools: Failure of regular faculty members to obtain a minimum

efficiency rating of 85% in two previous school years as required by the

school's teacher manual.

Evelyn Pena, et al. v. NLRC & Naga Parochial School, 258 SCRA 65 (1996),

11We are satisfied that petitioners' employment was terminated for a just

and legal cause. Their fear that, in the future unachievable standards might

be imposed by the school as a scheme to ease out tenured members of the

faulty is unfounded. The fact is that the evidence in this case does not bear

out petitioners' misgivings. To the contrary, it appears that only the six

petitioners, out of the school's 47 teachers, failed to obtain the grade of

85%, which proves that the rating is neither unattainable nor unrealistic.

(ld., at 69)"

11 1t is the prerogative of the school to set high standards of efficiency for its

teachers since quality education is a mandate of the Constitution (Art. XIV,

Par. 1). As long as the standards fixed are reasonable and not arbitrary,

courts are not at liberty to set them aside. Schools cannot be required to

adopt standards which barely satisfy criteria set for government

recognition. (ld., at 67)"

However, see ST. MARY'S ACADEMY OF DIPOLOG CITY V. PALACIO, ET AL., L-164913, 1st Div., del Castillo, J., September 8, 2010.

Department of Education, Culture and Sports (DECS) Memorandum No. 10, S. 1998 required incumbent teachers to register as professional teachers pursuant to Section 27 of Republic Act (RA) No. 7836, otherwise known as the Philippine Teachers Professionalization Act of 1994. The DECS Memorandum, pursuant to PRC Resolution No. 600, S. 1997, fixed the deadline for teachers to register on September 19, 2000. Petitioner, however, claimed that it decided to terminate the services of complaining teachers as early as March 31, 2000 because it would be prejudicial to the school if their services will be terminated in the middle of the school year. Issue: whether or not there was illegal dismissal.

28

11 [However], it is to be noted that the law still allows those who failed the licensure examination between 1996 and 2000 to continue teaching if they obtain temporary or special permits as para-teachers. In other words, as the law has provided a specific timeframe within which respondents could comply, petitioner has no right to deny them of this privilege accorded to them by law. As correctly pointed out by the Labor Arbiter and affirmed by the NLRC and the CA, the dismissal from service of respondents Palacio, Calibod, Laquio, Santander and Montederamos on March 31, 2000 was quite premature.

Petitioner claims that it terminated respondents' employment as early as March 2000 because it would be highly difficult to hire professional teachers in the middle of the school year as replacements for respondents without compromising the operation of the school and education of the students. Also, petitioner reasons out that it could not enter into written contracts with respondents for the period June 2000 to September 19, 2000 without violating the DECS's policy requiring contracts of yearly duration for elementary and high school teachers.

Petitioner's contentions are not tenable. First, even if respondents' contracts stipulate for a period of one year in compliance with DECS's directive, such stipulation could not be given effect for being violative of the law. Provisions in a contract must be read in conjunction with statutory and administrative regulations. This finds basis on the principle 11that an existing law enters into and forms part of a valid contract without the need for the parties expressly making reference to it." Settled is the rule that stipulations made upon the convenience of the parties are valid only if they are not contrary to law. Hence, mere reliance on the policy of DECS requiring yearly contracts for teachers should not prevent petitioner from retaining the services of respondents until and unless the law provides for cause for respondents' dismissal.

Petitioner's intention and desire not to put the students' education and school operation in jeopardy is neither a decisive consideration for respondents' termination prior to the deadline set by law. Again, by setting a deadline for registration as professional teachers, the law has allowed incumbent teachers to practice their teaching profession until September 19, 2000, despite being unregistered and unlicensed. The prejudice that respondents' retention would cause to the school's

operation is only trivial if not speculative as compared to the consequences of respondents' unemployment. Because of petitioner's predicament, it should have adopted measures to protect the interest of its teachers as regular employees. As correctly observed by theCA, petitioner should have earlier drawn a contingency plan in

29

the event there is need to terminate respondents' services in the middle of the school year. Incidentally, petitioner did not dispute that it hired and retained other teachers who do not likewise possess the qualification and eligibility and even allowed them to teach during the school year 2000-2001. This indicates petitioner's ulterior motive in

hastily dismissing respondents.

Nota Bene: The Supreme Court, however, did not order reinstatement but

approved the payment of separation benefits and qualified "backwages."

"Petitioner questions the amount of separation pay awarded to respondents contending that assuming respondents were illegally dismissed, they are only entitled to an amount computed from the time of dismissal up to September 19, 2000 only. After

September 19, 2000, respondents, according to petitioner, are already dismissible for cause for lack of the necessary license to teach.

This contention deserves no merit. Petitioner cannot possibly presume that respondents could not timely comply with the requirements of the law. At any rate, we

note that petitioner only assailed the amount of backwages for the first time in its

motion for reconsideration of the Decision of the CA. Thus, the Court cannot entertain the issue for being belatedly raised. Hence, the award of limited backwages covering

the period from March 31, 2000 to September 30, 2000 as ruled by the Labor Arbiter

and affirmed by both the NLRC and CA is in order.

See also: International School Manila &/or Brian McCauley v. International

School Alliance of Educators (ISAE) et al., L-167286, Feb. 05, 2014, 1st Div., Leonardo-De

Castro, J.

"Contrary to the ruling of the Labor Arbiter, it is not accurate to state that Santos

was dismissed by the School for inefficiency on account of the fact that she was caught only once without a lesson plan. The documentary evidence submitted by petitioners,

the contents of which we laid down in detail in our statement of facts, pointed to the

numerous instances when Santos failed to observe the prescribed standards of

performance set by the School in several areas of concern, not the least of which was her lack of adequate planning for her Filipino classes. Said evidence established that the

School administrators informed Santos of her inadequacies as soon as they became

apparent; that they provided constructive criticism of her planning process and teaching

30

performance; and that regular conferences were held between Santos and the administrators in order to address the latter's concerns. In view of her slow progress, the School required her to undergo the remediation phase of the evaluation process through a Professional Growth Plan. Despite the efforts of the School administrators, Santos failed to show any substantial improvement in her planning process. Having failed to exit the remediation process successfully, the School was left with no choice but to terminate her employment."

lO.Merger and Consolidation: BPI v. BPI Employees Union-Davao Chapter­

Federation of Unions in BPI Unibank, L-154301, October 19, 2011, En Bane,

Leonardo-de Castro, J. 659 SCRA 817.

FACTS: In 2000, Far East Bank (FEB) was absorbed by BPI in a merger. Now BPI has an existing Union Shop Clause agreement with the BPI Employees Union whereby it is a pre-condition that new employees must join the union before they can be regularized otherwise they cannot continue in employment. By reason of the failure of the FEB employees to join the union, BPI Union recommended to BPI their dismissal. BPI refused. The issue went to voluntary arbitration where BPI won but the Court of Appeals reversed the Voluntary Arbitrator. BPI appealed to the Supreme Court.

ISSUE: Whether or not the Union Shop agreement violated the constitutional right of security of tenure of the FEB employees absorbed by BPI.

HELD: No. As a general rule, the State protects the workers right to security of tenure. An employee's services can only be terminated upon just and authorized causes. In this case, the presence of a Union Shop Clause in the CBA

between BPI and BPI Union must be respected. Failure of an employee to join the union pursuant to the clause is an authorized cause for BPI not to continue employing the employee concerned - and BPI must respect that provision of the CBA. In the hierarchy of labor rights, unionism is favored over security of tenure . A contrary interpretation of the Union Shop Clause would dilute its efficacy and put the certified union that is supposedly being protected thereby at the mercy of management. Nevertheless, the FEB employees are entitled to the twin notice rule -this is to afford them ample opportunity to whether or not join the union.

31

11. Probationary Employment: Abbott laboratories, et al., v. Alcaraz, L-192571,

July 23, 2013, 701 SCRA 682, En Bane, Perlas-Bernabe, J.

". . . (t)he employer is made to comply with two (2) requirements when dealing with a probationary employee: first, the employer must communicate the regularization standards to the probationary employee; and second, the employer must make such communication at the time of the probationary employee's engagement. If the employer fails to comply with either, the employee is deemed as a regular and not a probationary employee." (ld., at 707) X X X

"The exception to the foregoing is when the job is self-descriptive in nature, for instance, in the case of maids, cooks, drivers, or messengers (Robinsons Galleria v. Ranchez, 640 SCRA 135, at 145 (2011). Also in Aberdeen Court, Inc. v. Agustin, 456 SCRA 32, at 43 (2005), it has been held that the rule on notifying a probationary employee of the standards of regularization should not be used to exculpate an employee who acts in a manner contrary to basic knowledge and common sense in regard to which there is no need to spell out a policy or standard to be met. In the same light, an employee's failure to perform the duties and responsibilities which have been clearly made known to him constitutes a justifiable basis for a probationary employee's nonregularization." (ld., at 708) "Verily, basic knowledge and common sense dictate that the adequate performance of one's duties is, by and of itself, an inherent and implied standard for a probationary employee to be regularized; such is a regularization standard which need not be literally spelled out or mapped into technical indicators in every case. In this regard, it must be observed that the assessment of adequate duty performance is in the nature of a management prerogative which when reasonably exercised---as Abbott did in this case--­should be respected. This is especially true of a managerial employee like Alcaraz who was tasked with the vital responsibility of handling the personnel and important matters of her department. "(ld., at 710)

Abbott laboratories, et al., v. Alcaraz, L-192571,RESOLUTION, April 22, 2014, RESOLUTION En Bane, Perlas-Bernabe, J.

32

"In the assailed Decision, the Court actually extended the application of the Agabon [442 SCRA 573 (2004)] and Jaka [454 SCRA 119 (2005)] rulings to breaches of company procedure (failure to evaluate probationary employee after 3 months), notwithstanding the employer's compliance with the statutory requirements under the labor Code."

12. Permanent Disability Alpha ship Management corporation, et al. v. Eleosis

V. Calo,2"d Div., Del Castillio, J., G.R. No. 192034. January 13, 2014. How is a

seaman's permanent disability determined, and by whom?

Thus, x x x it can be said that an employee's (seaman's) disability becomes permanent and total when so declared by the company-designated physician, or, in case of absence of such a declaration either of fitness or permanent total disability, upon the lapse of the 120 or 240-day treatment period, while the employee's disability continues and he is unable to engage in gainful employment during such period, and the company-designated physician fails to arrive at a definite assessment of the employee's fitness or disability. This is true "regardless of whether the employee loses the use of any part of his body."46 (Maersk Filipinas Crewing Inc. v. Mesina, G.R. No. 200837, June 5, 2013; Valenzona v. Fair Shipping Corporation, supra note 42 at 652; Quitoriano v. Jebsens Maritime, Inc., G.R. No. 179868, January 21, 2010, 610 SCRA 529, 536; Crystal Shipping. Inc. v. Natividad, 510 Phil. 332, 340 (2005)

13.Colegio de San Juan de Letran v. Isidra Dela Rosa-Meris, G.R. 178837, September 1, 2014, Peralta, J. Is the act of altering elementary students' grades in non-numerical subjects (p.e., writing, etc.) out of compassion ground for dismissal?

The fact that eight students were made beneficiaries of such increase does not justify the irregular alteration since the rule is, the rating of the pupil should be based on his scholastic record, even if the same is non-tested or qualitative in nature, as in the cas eat bar. Respondent's prerogative to give her students the grade that they deserve is not incoherent with having a fair and reasonable basis therefor.

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To our mind, the acts of the respondent in altering the grades in the Clean Records even after the same were already reviewed and approved by the subject coordinators; of effecting the alterations and erasures without placing her initials thereon; of not informing the subject coordinators of such alterations and erasures; of allowing the discrepancies to last without any effort to reconcile the same to avoid any doubts on the grading system of petitioner; of refusing to accept the memo informing her of the aforesaid tampering and snubbing any explanation relevant thereto, are all acts of transgression of school rules, regulations and policies. Truly, then, respondent had committed a misconduct, serious enough to warrant her dismissal from employment under paragraph (a) of Article 282 of the Labor Code, as well as Section 94(b ), ArticleXVII of the Manual of Regulations for Private Schools, which provides that the employment of a teacher may be terminated for negligence in keeping school or student records, or tampering with or falsification of the same x x x. ·

15. Manila Polo Club Employees' Union (MPCEU) FUR­TUCP v. Manila Polo Club, Inc., L-172846, 3rd Div., Peralta, J., 702 SCRA 20, July 24, 2013,

Based on the above and cases of similar import, We summarize: 1. Closure or cessation of operations of establishment or

undertaking may either be partial or total. 2. Closure or cessation of operations of establishment or

undertaking may or may not be due to serious business losses or financial reverses. However, in both instances, proof must be shown that: (1 )it was done in good faith to advance the empl9yer' s interest and not for the purpose of defeating or

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circumventing the rights of employees under the law or a valid agreement, and (2 )a written notice on the affected employees and the DOLE is served at least one month before the intended date of termination of employment.

3. The employer can lawfully close shop even if not due to serious business losses or financial reverses but separation pay, which is equivalent to at least one month as provided for by Article 297 (283) of the Labor Code, as amended, must be given to all the affected employees.

4. If the closure or cessation of operations of establishment or undertaking is due to serious business losses or financial reverses, the employer must prove such allegation in order to avoid the payment of separation pay. Otherwise, the affected employees are entitled to separation pay.

5. The burden of proving compliance with all the above-stated falls upon the employer (Id., at 37-38).

16. History of"Financial Assistance."

1. " ... where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's concern for the workingman. There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner .... labor law determinations, to quote from Bultmann, should be not only secundum rationem but also secundum caritatem." (Justice Enrique Fernando in Almira v. B.F. Goodrich Philippines, Inc., 58 SCRA 120, at 131 [1974])

With the Fernando ruling, dismissal became a "measure of last resort" And an employee, though legally dismissed, may still be awarded financial assistance by labor tribunals.

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2. PLDT v. NLRC & Abuca~ G.R. No. 80609 August 23, 1988, 164 SCRA 671, EN BANC, Cruz,J.,

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense.[ld., at 682]

3 Immaculate Conception Academy v. Camilon, L-1888035, 1st Div., Villarama, J., J., July 02, 2014.

The issue of whether a validly dismissed employee is entitled to separation pay has been settled in the 2007 case of Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. NLRC, 537 SCRA 171 (2007) 2"a Div., Velasco, Jr., J., where it was further clarified that "in addition to serious misconduct, in dismissals based on other grounds under Art. 282 (now Art. 296) like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee.

2. Solidbank Corporation v. NLRC, L-165951, March 30, 2010, 3'd Div.,

Peralta, J., 617 SCRA 161,

TheCA awarded financial assistance to respondents Rodolfo Bombita eta/. out of "compassionate justice" despite the fact that petitioner Solid bank Corporation had already paid the respondents their separation pay in accordance with Article 283 (now Art. 297) of the Labor Code. Proper? While theCA should not be faulted for sympathizing with the plight of respondents as they suddenly lost their means of livelihood, this Court holds that it is precisely because of the sudden loss of employment- one that is beyond the control of labor- that the law statutorily grants separation pay and dictates how the same should be computed. Thus, any business establishment that decides to cease its operations has the burden of complying with the law. This Court should refrain from adding more than what the law requires, as the same is within the realm of the legislature.

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It bears to stress, however, that petitioner may, as it has done, grant on a voluntary and ex gratia basis, any amount more than what is required by the law, but to insist that more financial assistance be given is certainly something that this Court cannot countenance, as the same serves to penalize petitioner, which has already given more than what the law requires. Moreover, any award of additional financial assistance to respondents would put them at an advantage and in a better position than the rest of their co-employees who similarly lost their employment because of petitioner's decision to cease its operations.

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