MAGNIFICUS JURIS

REVIEWS AND SEMINARS, INC.

University of San Carlos
New Law and Business School Bldg.
Pelaez St. cor. Sanciangko St., Cebu City

2013 Bar Review in Labor Relations

July 5, 6 & 7, 2013

Atty. Jefferson M. Marquez

Partner, ACCRA Law Offices
Professor, USC School of Law & Governance

Part 1:
July 5, 2013 (Friday)
5:30 pm-8:30 p.m.
I.
II.

Applicable Law and Basic Principles

Employer-Employee Relationship

III.

A. Power to Hire
1) Restrictions prior to hiring
B. Payment of Wages
1) Methods of Fixing Wages
Employment Status & Classification of Employees

Part 2:
July 6, 2013 (Saturday)
8:00-12:00/1:30-6:30 p.m.
I.
II.

Management Prerogative
Security of Tenure
A. Termination of Employment
1) Just Cause/s
a) Prior Notice and Hearing
b) Imposable Penalty
c) Relief/s and Award
d) Separation Pay in lieu of Reinstatement
e) Other Award/s Based on Equity
2) Authorized Cause/s
a) Bona Fide Suspension of Operations
a.1) Cost Cutting Measures
b) Fair and Reasonable Criteria
c) 30 Day Prior Notice
d) Relief/s and Awards
e) Disease
3) Liability of Corporate Officer/s

ATTY. J. M. MARQUEZ
Page 2 of 38

III.
IV.
V.

Resignation and Retirement

Jurisdiction
Labor Law Practice and Procedure

Part 3:

July 7, 2013 (Sunday)

8:00-12:00/1:30-6:30p.m.
I.

Right to Self-Organization
A) Constitutional & Statutory Basis
B) Union Membership
C) Ineligible Employees
D) Registration of a Labor Organization
1) Modes of Acquiring Legal Personality
E) Cancellation of Union Registration
F) Union members obligations
Major Rights of Legitimate Labor Union
Voluntary Arbitration
A) Basic Principles
B) Jurisdiction of Voluntary Arbitrator
Unfair Labor Practice

II.
III.
IV.

1.

EMPLOYER-EMPLOYEE RELATIONSHIP

a.

Peoples Broadcasting (Bombo Radyo Phils., Inc.)

vs. Sec. of DOLE et al., G.R. No. 179652, March 6, 2012, En
banc Res. J.Velasco It is clear and beyond debate than an
employer-employee relationship must exist for the exercise of
the visitorial and enforcement power of the DOLE. The
question now arises, may the DOLE make a determination of
whether an employer-employee relationship exists, and if so,
to what extent? This must be answered in the affirmative. The
prior decision of this Court in the present case accepts such
answer, but places a limitation upon the power of the DOLE,
holding that the determination of the existence of such
relationship is still primarily within the power of the NLRC, that
is any finding by the DOLE is merely preliminary. This
conclusion must be revisited. The law did not say that the
DOLE would first seek the NLRCs determination of the
existence of employer-employee relationship, or that should
the existence of the employer-employee relationship be
disputed, the DOLE would refer the matter to the NLRC. The
DOLE must have the power to determine whether or not an
employer-employee relationship exists, and from there to
decide whether or not to issue a compliance order in

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Page 3 of 38

accordance with Art. 128 (b) of the Labor Code. The DOLE
Secretary or his representative, can utilize the four-fold test in
determining the existence of employer-employee relationship,
even in the course of inspection, making use of the same
evidence that would have been presented before the NLRC.
The DOLE would have no jurisdiction only if the employeremployee relationship has already been terminated, or it
appears,
upon
review,
that
no
employer-employee
relationship existed in the first place. The DOLE may well
make the determination that no employer-employee
relationship exists, thus divesting itself of jurisdiction over the
case. In sum, the Labor Secretary or the latters authorized
representative under Art. 128 of the Code shall have the
power to determine the existence of employer-employee
relationship, to the exclusion of the NLRC. The prospect of
competing conclusions could just as well have been
eliminated by according respect to the DOLE findings, to the
exclusion of the NLRC, and this, we believe is the more
prudent course of action to take. See also Superior
Packaging Corp., vs. Balagsay et al., G.R. No. 178909,
October 10, 2013 where the power of the Regional
Director/DOLE to make a determination of the existence of
employer-employee relationship and find the existence of
labor-only contracting under his visitorial and enforcement
power, was affirmed, citing Peoples Broadcasting (Bombo
Radyo Phils., Inc.
b.

Tongko vs. Manufacturer Life Insurance Co.

(Phils), Inc., et al., G.R. No. 167622, January 25, 2011, En
Banc, J.Brion the complainant was an independent selfemployed insurance agent, and not an employee of Manulife
despite that he had been a unit manager, branch manager
and regional sales manager. He had always been governed by
the agreement from the start until the end of his relationship
with Manulife. His agency status never changed except to the
extent of being a lead agent. A principal-agent relationship
existed and not an employer-employee relationship, since
there is absence of labor law control. Control over the
performance of the task of one providing the service both
with respect to the means and manner, and the results of the
service --- is the primary element in determining whether an
employment relationship exists. There are built-in elements of
control specific to an insurance agency, which do not amount
to the elements of control that characterize an employment
relationship governed by the Labor Code. The Insurance Code
provides definite parameters in the way an agent negotiates
for the sale of the companys insurance products, his
collection activities and his delivery of the insurance contract
or policy.

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c.

2.

Legend Hotel (Manila) vs. Realuyo, G.R. No. 153511,

July 18, 2012 Respondent who was employed as a pianist in
the establishments coffee shop from September 1992 until
the termination of his services in July 1999 was an employee
as he was under the supervision and control of the
establishment, thus: he could not choose the time of his
performance which was fixed from 7:00 p.m. to 10:00 p.m. 3
to 6 times a week; he could not choose the place of his
performance; he was required at certain times to perform only
tagalong songs or music, or to wear barong tagalong to
conform to the Filipiniana motif; he was subjected to the rules
on employees representation check and chits, a privilege
granted to other employees. Moreover, the establishment
wielded the power of selection at the time it entered into the
service contract with the pianist. The establishment could not
seek refuge behind such service contract as it is the law that
defines and governs an employment relationship, whose
terms are not restricted to those fixed in the written contract,
for other factors, like the nature of the work the employee has
been called upon to perform, are also considered. There is
likewise no denying that the remuneration denominated as
talent fees was fixed on the basis of his talent and skill and
the quality of the music he played during the hours of
performance each night, taking into account the prevailing
rate for similar talents in the entertainment industry. His
remuneration albeit denominated as talent fees was still
considered as included in the term wage in the sense and
context of the Labor Code, regardless of how the
establishment chose to designate the remuneration. That he
worked for less than 8 hours/day does not negate employeremployee relationship, since the Labor Code only sets a
maximum number of hours but did not prohibit work of less
than 8 hours.

TERMINATION OF EMPLOYMENT
a.

Asian Terminal vs. NLRC, G.R. No. 158458, December 19,

2007, citing 2005 Standard Electric Mfg. case -- termination of
employee who failed to report because under detention for
criminal charges which were later dismissed, a case of
dismissal for a non-existent or false cause, citing cases of
Magtoto & Pedrosa.; see also Standard Electric Mfg. Co.
vs. Standard Electric EE Union, G.R.No. 166111, August
25, 2005 - termination of employee who failed to report
because under detention for rape charges which were later
dismissed; case of non-existent or false cause, citing Magtoto
& Pedrosa.

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b. Perez, et al. vs. Phil Telegraph & Telephone Company,

et al., G.R. No. 152048, April 7, 2009 En Banc Due
process, formal conference under IRR mandatory only when
requested by employee in writing, or substantial evidentiary
disputes exist or a company rule or practice requires it or
when similar circumstances require it; ample opportunity to
be heard under the Labor Code prevails over the hearing
requirement of the IRR.
c. Quimbao vs. Manila Electric Company, G.R. No. 171023,
December 18, 2009 Gross neglect of duty consisting of
habitual absences and tardiness becomes serious in character
due to frequency of instances. It can be equated to serious
misconduct. Even assuming that the ground for dismissal is
gross and habitual neglect of duty, the employee is not
entitled to separation pay. The constitutional policy to provide
full protection to labor is not meant to be an instrument to
oppress the employers.
d. Javellana, Jr. vs. Belen, G.R. Nos. 181913 & 182158, March
5, 2010, - when an employee is found to be illegally
dismissed, and reinstatement is not possible, he should be
awarded as follows: (a) backwages from date of dismissal until
finality of decision; (b) separation pay from date of
employment until finality of decision (not date of dismissal);
(c) 10% attorneys fees based on the awards computed; and
(d) 12% interest per annum on the awards computed from
date of finality of decision until they are paid, these monetary
claims being equivalent of a forbearance of credit. Note,
however, Torres vs. Rural Bank of San Juan, G.R. No.
184520, March 13, 2013 involving a managerial employee
who was illegally dismissed for loss of confidence. Aside from
the award of separation pay in lieu of reinstatement which
was fixed at one (1) month salary for every year of service, he
was awarded backwages with legal interest at the rate of 6%
per annum from date of his illegal dismissal until finality of the
decision of the Court, and thereafter, with 12% legal interest
until fully paid in accordance with the guidelines in the 1994
Eastern Shipping Lines, Inc., case.
e. Aro et al., vs. NLRC-4th Division, et al., G.R. No. 174792,
March 7, 2012for project employees who were illegally
dismissed before the expiration of the project, they shall be
entitled to reinstatement with full backwages. However if the
project or work is completed during the pendency of the
ensuing suit for illegal dismissal, the employees shall be
entitled to full backwages from the date of termination until
the actual completion of the work, and not until the finality of
the decision. Illegally dismissed workers are entitled to the
payment of their salaries corresponding to the unexpired
portion of their employment where the employment is for a
definite period. In this case, the Cordova Reef Village Resort

ATTY. J. M. MARQUEZ
Page 6 of 38

project had been completed in October 1996 and the

employer had signified its willingness, by way of concession to
the workers, to set the date of the completion of the project
as of March 18, 1997; hence, the latter date should be
considered as the date of the completion of the project for
purposes of computing the full backwages of the workers.
f. General Milling Corp vs. Casio, et al., G.R. No. 149552,
March 10, 2010 In terminating an employment by enforcing
the union security clause in the CBA, the employers needs
only to determine and prove that: (a) the union security
clause is applicable; (b) the union is requesting for the
enforcement of the union security provision in the CBA; and
(c) there is sufficient evidence to support the decision of the
Union to expel the employees from the union. The employer
cannot dispense with the prior and notice requirements even
when said dismissal is pursuant to a closed shop provision in
the CBA.
g. College of the Immaculate Concepcion vs. NLRC, et al.,
G.R. No. 167563, March 22, 2010 an employee who is
reinstated in the payroll pending appeal is not required to
refund to the employer his salaries and allowances even if
such order of reinstatement is reversed by the NLRC, citing
Garcia En Banc. And this rule applies even if the Labor
Arbiters order of reinstatement is incorrect as when the
reinstatement is to a position different from what was
previously held. Article 223 of the Labor Code is not
concerned with the wisdom or propriety of the labor arbiters
order of reinstatement, for if it was, then it should have
provided that the pendency of an appeal should stay its
execution. After all, a decision cannot be deemed irrefragable
unless it attains finality; see Garcia vs. PAL, G.R. No.
164856, Jan. 20, 2009, En Banc Employer has no right to
demand refund of salary paid pending appeal even if the
NLRC reverses the labor arbiters order of reinstatement; the
social justice principles of labor law outweigh or render
inapplicable the civil law doctrine of unjust enrichment
espoused by J. Velasco in 2007 Genuino case; placing an
employer under corporate rehabilitation has the effect of
suspending labor claims, and constitutes an injunction on
power of employer to exercise option of reinstatement.
h. WPP Marketing Communications Inc., et al. vs. Galera,
G.R. No. 169207, March 25, 2010 an alien who is working in
the Philippines but without an alien employment permit
cannot claim employment benefits under the Labor Code even
if she is found to be illegally dismissed. Employment permit
must be acquired prior to employment. She cannot come to
this Court with unclean hands. To grant her prayer is to
sanction the violation of the Philippine labor laws requiring
aliens to secure work permits before their employment. We

ATTY. J. M. MARQUEZ
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hold that the status quo must prevail in the present case and
we leave the parties where they are. This ruling, however
does not bar her from seeking relief from other jurisdictions.
i. Cercado vs. Uniprom, Inc., G.R. No. 188154, October 13,
2010 It is axiomatic that a retirement plan giving the
employer the option to retire its employees below the ages
provided by law must be assented to an accepted by the
latter, otherwise, its adhesive imposition will amount to a
deprivation of property without due process of law. Xxx The
plan can either be embodied in a CBA, or established after
consultations and negotiations with the employees
bargaining representative. Here, the employer retired the
petitioner under the companys non-contributory retirement
plan which was unilaterally and compulsorily imposed on him.
At the time she was hired, the company had no existing
retirement plan. The petitioner was forced to participate in the
plan, and the only way she could have rejected the same was
to resign or lose her job. It is not enough that petitioner was
aware of the retirement plan. Implied knowledge, regardless
of duration, cannot equate to the voluntary acceptance
required by law in granting an early retirement age option to
an employer. The law demands more than a passive
acquiescence on the part of employees, considering that an
employers early retirement age option involves a concession
of the formers constitutional right to security of tenure.
Retirement is the result of a bilateral act of the parties, a
voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age,
agrees to sever his or her employment with the former.
j. Robinsons Galleria/Robinsons Supermarket Corp., vs.
Ranchez, G.R. No. 177937, January 19, 2011 when the
cashier under probation was suspected of qualified theft, was
strip-searched by the company guards, and brought to the
police where she was detained, she was deemed
constructively dismissed. She was not accorded substantive
and procedural due process. The haphazard manner in the
investigation of the missing cash, which was left to the
determination of the police authorities etc., left the employee
with no choice but to cry foul. On the same day that the
missing money was reported by the employee, the company
already prejudged her guilt. However since she was notified of
her
termination
and/or
expiration
of
probationary
employment, she cannot be reinstated anymore but entitled
to separation pay instead. Her backwages should be until the
end of the probationary contract because as probationary
employee, the lapse of her employment without her
appointment as a regular employee effectively severed the
employer-employee relationship between the parties.

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Page 8 of 38

k. Caong, Jr. vs. Regualos, G.R. No. 179428, January 26, 2011
the policy of jeepney owners/operators of suspending their
drivers pending payment of arrears in their boundary
obligations is fair and reasonable and does not constitute
illegal dismissal. There was no intent to sever the employeremployee relationship. In fact it was made clear that the
drivers could put an end to the suspension if they only pay
their recent arrears. It would have been different if the drivers
complied with the condition and their employer still refused to
readmit them to work. That would have been a clear act of
dismissal. But such was not the case. Instead of paying, the
drivers even filed a complaint for illegal dismissal.
l. Nationwide Security & Allied Services vs. Valderama,
G.R. No. 186614, Feb. 23, 2011 a security agency may place
a security guard on floating status or temporary off detail until
he is transferred or assigned to a new post or client. Such
relief and transfer order in itself does not sever employment
relationship. While the guard has the right to security of
tenure having been employed for more than 3 years, it does
not give him a vested right to his position as would deprive
his employer the prerogative to change his assignment or
transfer him where his service will be most beneficial to the
client. However, such temporary inactivity or floating status
should continue only for six months. Otherwise, it constitutes
constructive dismissal. If there is a surplus of security guards
caused by lack of clients or projects, the security agency may
resort to retrenchment upon compliance with the Labor Code.
In this way, the agency will not to be held liable for
constructive dismissal and be burdened with payment of
backwages.
m.Exodus International Construction Corp., vs. Biscocho,
et al., G.R. No. 166109, Feb, 23, 2011 when the employer
denies dismissing the complainants as in fact the latter chose
not to report for work and sued for illegal dismissal, it is
incumbent upon the complainants-employees to first establish
the fact of dismissal before the burden is shifted to the
employer to prove that the dismissal was legal. If there is no
dismissal, then there can be no question as to the legality or
illegality thereof. In such case, the Labor Arbiter is correct in
ordering reinstatement but without backwages.
n. Pfizer Inc., et al., vs. Velasco, G.R. No. 177467, March 9,
2011 the delay of the employer for almost 2 years to comply
with the order of reinstatement does not excuse it from
paying the salary of the reinstated employee for the period
until the dismissal was found to be valid by the appellate
court, citing Garcia En Banc which abandoned Genuino.
Moreover, his reinstatement pending appeal must be for the
position he had occupied prior to his dismissal and in Baguio
City, and not at the main office in Makati City as this would

ATTY. J. M. MARQUEZ
Page 9 of 38

unnecessarily cause hardship to the reinstated employee

more especially since no explanation was offered by the
employer for such relocation such as the filling up of the
employees position and the unavailability of substantially
equivalent position in Baguio City.
A transfer of work
assignment without any justification therefor even if the
employee would be presumably doing the same job with the
same pay cannot be deemed compliance with the
reinstatement order.
o. Mansion Printing Center et al., vs. Bitara, Jr. G.R. No.
168120, January 25, 2012 There is no merit in complainants
claim that the notice of explanation and notice of termination,
both of which he allegedly refused to sign, were never served
upon him, and hence, he was denied due process. Here,
firstly, the employer indicated in the notices the notation that
respondent refused to sign together with the corresponding
dates of service. Second, the employer executed an Affidavit
dated 29 July 2000 stating that: (1) he is the General Manager
of the company; (2) he personally served each notice upon
respondent, when respondent went to the office/factory on 17
March 2000 and 21 March 2000, respectively; and (3) on both
occasions, after reading the contents of the memoranda,
respondent refused to acknowledge receipt thereof. We are,
thus convinced that the notices have been validly served. xxx
p. Bank of Lubao, Inc. vs. Manabat et al., G.R. No. 188722,
February 1, 2012 Under the doctrine of strained relations,
the payment of separation pay is considered an acceptable
alternative to reinstatement when the latter option is no
longer desirable or viable. On one hand, such payment
liberates the employee from what could be a highly
oppressive work environment. On the other hand it releases
the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust. In
such cases, it should be proved that the employee concerned
occupies a position where he enjoys the trust and confidence
of his employer; and that it is likely that if reinstated, an
atmosphere of antipathy and antagonism may be generated
as to adversely affect the efficiency and productivity of the
employee concerned. Here, the petitioners filing of various
criminal complaints against the employee who was a Bank
Encoder for qualified theft and the subsequent filing by the
latter of the complaint for illegal dismissal against the latter,
taken together with the pendency of the instant case for more
than six years had caused strained relations between the
parties. Even the respondent refused to be re-admitted to
work which by itself is indicative of the existence of strained
relations between the parties. However the award of
backwages should be modified. When there is an order of
reinstatement, the computation of backwages shall be
reckoned from the time of illegal dismissal up to the time that

ATTY. J. M. MARQUEZ
Page 10 of 38

the employee is actually reinstated to his former position.

When the labor arbiter directed respondents reinstatement,
the petitioner directed the respondent to report back to work
on May 4, 2007. However, the respondent opted not to report
for work. Thus, it is but fair that the backwages that should be
awarded be computed from the time respondent was illegally
dismissed until the time when he was required to report for
work i.e. from September 1, 2005 until May 4, 2007. It is only
during the said period that respondent is deemed to be
entitled to the payment of backwages. The fact that the CA, in
its April 4, 2009 decision, ordered the payment of separation
pay in lieu of reinstatement would not entitle the respondent
to backwages as the CA decision unlike that of the LA is not
immediately executory.
q. Canadian Opportunities Unlimited, Inc. vs. Dalangin, Jr.
G.R. No. 172223, February 6, 2012 The dismissal of an
Immigration and Legal Manager who was hired under
probationary employment barely a month on the job was
valid. He betrayed his negative attitude and regard for the
company, his co-employees and his work. He refused to
attend the companys Values Formation Seminar which
reflects on the kind of person and employee he was. It
highlights his lack of interest in familiarizing himself with the
companys objectives and policies. It also reveals his lack of
interest in establishing good working relationship with his coemployees; it betrays an arrogant and condescending attitude
on his part towards his co-employees, and a lack of support
for the company objective that company managers be
examples to the rank-and-file employees. He exhibited
negative working habits as he would take prolonged lunch
breaks or would go out of the officewithout leave of the
companyonly to call the personnel manager later to inform
the latter he would be unable to return as he had to attend to
personal matters. We therefore disagree with the CA that the
company could not have fully determined his performance
barely one month into his employment. As we said in
International Catholic Migration Commission, the
probationary term or period denotes its purpose but not its
length. To our mind, four weeks was enough for the company
to assess his fitness for the job and he was found wanting.
However, the company violated his right to due process when
he was dismissed on the very day the notice of dismissal was
given to him on October 27, 2001. It did not give him a
reasonable time, from the effective date of his separation, as
required by the rules. An award of Php10,000.00 in nominal
damages is appropriate.
r. Skippers United Pacific, Inc. et al., vs. Doza, et al., G.R.
No. 175558, February 8, 2012 Art. 285 of the Labor Code
recognizes termination by the employee. The law

ATTY. J. M. MARQUEZ
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contemplates the requirement of a written notice of

resignation. In the absence of a written resignation, it is safe
to presume that the employer terminated the seafarers. Since
the termination occurred on January 1999 before the passage
of the amendatory RA 10022, we shall apply RA 8042 as unamended, without touching on the constitutionality of Sec. 7
of RA 10022. The declaration on 29 March 2009 in Serrano
vs. Gallant Maritime Services of the constitutionality of the
clause or for three months for every year of the unexpired
term, whichever is less in RA 8042 shall however be given
retroactive effect to the termination that occurred in January
1999 because an unconstitutional clause in the law confers no
rights, imposes no duties and affords no protection. The
unconstitutional provision is inoperative, as if it was not
passed at all.
s. Ymbong vs. ABS-CBN Broadcasting Corp., G.R. No.
184885, March 7, 2012 The policy of ABS-CBN which
considers an employee deemed resigned, or require him/her
to resign if he/she runs for public office is valid. It is well
within its rights to ensure that it maintains its objectivity and
credibility and freeing itself from any appearance of
impartiality so that the confidence of the viewing and listening
public in it will not be in any way eroded. A similar policy is
even stated under RA 9006 otherwise known as the Fair
Election Act. Moreover, there is no violation of due process.
The overt act of the complainant running for public office is
tantamount to resignation. He was separated by ABS-CBN not
because he was dismissed but because he resigned. Since
there was no termination to speak of, the requirement of due
process in dismissal cases cannot be made to apply.
t. Blue Sky Trading Company Inc. et al., vs. Blas et al.,
G.R. No. 190559, March 7, 2012 The warehouse personnel
who were suspected of stealing intensifying screens, made to
explain and were placed under preventive suspension on
February 3, 2005 pending investigation cannot validly
challenge their preventive suspension. Preventive suspension
may be imposed on an employee whose alleged violation is
the subject of an investigation. Its purpose is to prevent an
employee from causing harm or injury to his colleagues and to
the employer. Here, they were issued notices to explain on
February 3, 2005. They submitted their written explanation
the day after and they were dismissed from service on
February 5, 2005. While the Court does not agree with the
companys decision to terminate them from the service for
lack of proof, there is no impropriety in placing them under
preventive suspension since the period did not exceed the
maximum posed by law and there was a valid purpose for the
same.

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Page 12 of 38

u. Jiao et al., vs. NLRC et al., G.R. No. 182331, April 18, 2012
Under the Deed of Assignments of Assets and Assumption of
Liabilities between Globalbank and Metrobank, the latter
accepted the formers assets in exchange for assuming its
liabilities such as deposit liabilities, bills payable etc. However,
Metrobank did not assume the liability of Globalbank to pay
separation pay to its former employees. This must be so
because it is understood that the same liabilities ended when
the workers were paid the amounts embodied in their
respective acceptance letters and quitclaims. Hence, this
obligation could not have been passed on to Metrobank even
if the latter is the parent company of Globalbank. As a rule, a
corporation that purchases the assets of another will not be
liable for the debts of the selling corporation, provided the
former acted in good faith and paid adequate consideration
for such assets, except when any of the following
circumstances is present: 1) where the purchaser expressly or
impliedly agrees to assume the debts; 2) where the
transaction amounts to a consolidation or merger of the
corporations; 3) where the purchasing corporation is merely a
continuation of the selling corporation; and 4) where the
selling corporation fraudulently enters into the transaction to
escape liability for those debts.
v. International Management Service vs. Logarta, G.R. No.
163657, April 18, 2012 An OFW who was deployed to work
in Saudi Arabia for a foreign employer, both he and his
employer are subject to the Labor Code provision on
retrenchment, notwithstanding RA 8042. The basic policy in
this jurisdiction is that all Filipino workers, whether employed
locally or overseas, enjoy the protective mantle of Philippine
labor and social legislations. As for the notice requirement,
proper notice to the DOLE within 30 days prior to the intended
date of retrenchment is necessary and must be complied with
despite that the worker is an OFW.
w. Waterfront Cebu City Hotel vs. Jimenez et al., G.R. No.
174214, June 13, 2012 The closure of a department or
division of a company constitutes retrenchment by, and not
closure of, the company itself. Verily, retrenchment and not
closure was effected to warrant the valid dismissal of the
workers. The hotel has not totally ceased its operations. It
merely closed down a department. All the elements for a
valid retrenchment were successfully proven. First, the huge
losses suffered by the club for the past two years had forced
the hotel to close it down to avert further losses which would
eventually affect the operations of the hotel. Second, all 45
employees working under the club were served with notice of
termination. The corresponding notice was likewise served to
the DOLE one month prior to retrenchment. Third, the
employees were offered separation pay, most of whom
accepted and opted not to join in this complaint. Fourth,

ATTY. J. M. MARQUEZ
Page 13 of 38

cessation or withdrawal from business operations was bona

fide in character and not impelled by a motive to defeat or
circumvent the tenurial rights of employees. As a matter of
fact, as of this writing, the club has not resumed operations.
Neither is there a showing that the hotel carried out the
closure of the business in bad faith. No labor dispute existed
between management and the employees when the latter
were terminated.
x. Cosmos Bottling Corp vs. Fermin, G.R. No. 193676 &
194303, June 20, 2012 The act of taking the cellphone of a
co-employee without the latters knowledge constituted theft.
Theft committed against a co-employee is considered as a
case analogous to serious misconduct, for which the penalty
of dismissal from service may be meted out to the erring
employee, citing John Hancock Life Insurance Corp. vs.
Davis, G.R. No. 169549, Sept. 3, 2008, where theft committed
by an employee against his fellow employee was held to be a
just cause to terminate employment, analogous to serious
misconduct; analogous cause includes voluntary and/or
willful act or omission of the employee, attesting to an
employees moral depravity.
y. Reyes-Rayel vs. Philippine Luen Thai Holdings Corp.,
G.R. No. 174892, July 11, 2012 Neither can there be a denial
of due process due to the absence of a hearing or
investigation at the company level. It has been held in a
plethora of cases that due process requirement is met when
there is simply an opportunity to be heard and to explain
ones side even if no hearing is conducted, citing Perez vs.
Philippine Telegraph & Telephone Company where an
employee may be afforded ample opportunity to be heard by
means of any method, verbal or written, whether in a hearing,
conference or some other fair, just and reasonable way. Here,
the employees written response to the prerequisite notice
provided her with an avenue to explain and defend her side
and thus served the purpose of due process. That there was
no hearing, investigation or right to appeal, which the
employee opined to be a violation of company policies, is of
no moment since the records is bereft of any showing that
there is an existing company policy that requires these
procedures with respect to the termination of a CHR Director
like the employee or that the company practice calls for the
same. There was also no request for a formal hearing on the
part of the employee.
z. Verdadero vs. Barney Autolines Group of Companies, et
al., G.R. No. 195428, August 29, 2012 The bus conductor
cannot be deemed constructively dismissed. Records do not
show any demotion in rank or a diminution in pay made
against him. Neither was there any act of clear discrimination,

ATTY. J. M. MARQUEZ
Page 14 of 38

insensibility or disdain committed by the employer against the

driver which would justify or force him to terminate his
employment with the company. The verbal abuse allegedly
committed by the companys disciplinary officer which was
corroborated by a witness, does not constitute constructive
dismissal as these acts should have been committed by the
employer against the employee. Unlawful acts committed by
a co-employee will not bring the matter within the ambit of
constructive dismissal. The disciplinary officer is not the
employer; his functions do not involve the power or authority
to dismiss or even suspend an employee. Such power is
exclusively lodged in the companys management. In fact,
records show that the management has been urging the
conductor to report back to work not only to face the
administrative charge against him but also because of the
scarcity and necessity of bus conductors in the company.
aa. Mindanao Terminal & Brokerage Service, Inc. et al. vs.
Nagkahiusang
Mamumuo
sa
Minterbro-Southern
Philippines Federation of Labor et al., G.R. No. 174300,
December 5, 2012 the failure of the arrastre and
stevedoring operator to make work available to its workers at
the pier after its repair and rehabilitation, for a period of more
than six (6) months resulted in the constructive dismissal of
its workers. It failed to call the attention of its client on the
latters obligation under the Contract of Use of Pier. It failed to
show any effort on its part to hold its client to its end of the
bargain even though its workers were being forced to be laid
off. Effectively, when it allowed its client to abandon its
agreement for more than six (6) months without holding its
client accountable for such breach, it consented to its client
unexplained action and the prejudice it caused to its workers.
As it is responsible for the lack of work at the pier, and
consequently, the lay-off of its workers, it is liable for the
separation from employment of its workers on a ground
similar to retrenchment. Thus, applying the 1995 case of
Sebuguero, the operator must be held liable. Lay-off is
essentially retrenchment and under Article 283 of the Labor
Code a retrenched employee is entitled to separation pay
equivalent to one (1) month salary or one-half (1/2) month
salary per year of service, whichever is higher.
bb.The Orchard Golf & Country Club vs. Francisco, G.R. No.
178125, March 18, 2013 The transfer of the employee from
Club Accountant to the position of Cost Controller amounted
to demotion in rank, thereby constituting constructive
dismissal. Her transfer was occasioned not by a past infraction
or a present one which has just been committed, but by her
act of filing a complaint for impropriety against her superior.
The transfer was made as a penalty on a charge that has not
yet been resolved. To punish one for an offense that has not

ATTY. J. M. MARQUEZ
Page 15 of 38

been proved is truly unfair as it deprives one of due process.

The fact that the employee continued to report for work does
not necessarily suggest that constructive dismissal has not
occurred, nor does it operates as a waiver. Constructive
dismissal occurs not when the employees ceases to report for
work, but when the unwarranted acts of the employer are
committed to the end that the employees continued
employment will become so intolerable. In these difficult
times, an employee may be left with no choice but to continue
with his employment despite abuses committed against him
by the employer, and even during the pendency of a labor
dispute between them. This should not be taken against the
employee. Instead, we must share the burden of his plight,
ever aware of the precept that necessitous men are not free
men.
cc. Cavite Apparel Inc. et al., vs. Marquez, G.R. No. 172044,
February 6, 2013 Even if the employee failed to present a
medical certificate for her sick leave on May 8, 2000 in
violation of company rules on leaves of absences, she cannot
be dismissed for gross and habitual neglect of duty. Gross
negligence implies want of care in the performance of ones
duties. Habitual neglect imparts repeated failure to perform
ones duties for a period of time. Here, the records are bereft
of any indication that apart from the four occasions when she
did not report for work, the employee had been cited for any
infraction since she started her employment in 1994. Four
absences in her six years of service cannot be considered
gross and habitual neglect of duty especially so since the
absences were spread out over a six month period. Moreover,
she had already been penalized for the first three absences,
the most serious penalty being a six day suspension for her
third absence on April 27, 2000. Thus, the penalty of dismissal
was too harsh and unjustified. Even when there exist some
rules agreed upon between the employer and employee on
the subject of dismissal, the same cannot preclude the State
from inquiring on whether [their] rigid application would work
too harshly on the employee. This Court will not hesitate to
disregard a penalty that is manifestly disproportionate to the
infraction committed.
dd.Leopard Security & Investigation Agency vs. Quitoy et
al., G.R. No. 186344, February 20, 2013 the security guards
who were relieved from duty due to the expiration of the
agencies security service contract cannot complain of illegal
dismissal especially since they were directed by their agency
to report for work at their office ten days after. Applying
Article 286 of the labor Code by analogy, this Court has
repeatedly recognized that security guards may be
temporarily sidelined by their security agency as their
assignments primarily depend on the contracts entered into
by the latter with third parties. Temporary off-detail or

ATTY. J. M. MARQUEZ
Page 16 of 38

floating status is the period of time when security guards

are in between assignments or when they are made to wait
after being relieved from previous post until they are
transferred to a new one. It takes place when, as here, the
security agencys clients decide not to renew their contracts
with the agency, resulting in a situation where the available
posts under its existing contracts are less than the number of
guards in its roster. For as long as such temporary activity
does not continue for a period exceeding six months, such
temporary off-detail or floating status is not equivalent to
dismissal. Thus, the award of backwages, and separation pay
in lieu of reinstatement, is inconsistent with a finding that
there was no illegal dismissal.
ee. Alilem Credit Coorperative, Inc. et al., vs. Bandiola,
G.R. No. 173489, February 25, 2013 An employee who
committed an extra-marital affair with a married woman who
is not his fellow worker in the business establishment may be
dismissed for violating the cooperatives Personnel Policy
which penalizes with dismissal any employee who commits
an act that brings discredit to the organization. While his act
of engaging in extra-marital affairs may be considered
personal to him and does not directly affect the performance
of his assigned task as bookkeeper, aside from the fact that
the act was specifically provided for by the cooperatives
Personnel Policy as one of the grounds for termination of
employment, said act raised concerns to the organization as
the Board received numerous complaints and petitions from
the cooperative members themselves asking for the removal
of the employee because of his immoral conduct.
ff. Padillo vs. Rural Bank of Nabunturan, Inc. et al., G.R. No.
199338, January 21, 2013 ---An ailing employee, 55 years of
age, who has served the company for twenty nine (29) years
of dedicated service is not eligible to retirement pay under the
Labor Code. While he was able to comply with the five (5)
year tenure requirement, he however fell short with respect to
the sixty (60) year age requirement. The age and tenure
requirements are cumulative and non-compliance with one
negates the employees entitlement to retirement benefits
especially since there exists no retirement plan, collective
bargaining agreement or any other equivalent contract
between the parties which set out the terms and condition for
the retirement of employees. Neither was it proven that there
exists an established company policy of giving early
retirement packages to the banks aging employees.
Nevertheless, the Court concurs with the CA that financial
assistance should be awarded but an increased amount. From
Php50,000 to Php75,000 owing to the employees twenty nine
(29) year of dedicated service. Finally, the Labor Code
provisions on termination on the ground of disease under
Article 297 does not apply considering that it was the

ATTY. J. M. MARQUEZ
Page 17 of 38

employee and not the bank who severed the employment

relations

3.

CERTIFICATION ELECTION
a. Legend International Resorts Ltd., vs. Kilusang
Manggagawa ng Legenda, G.R. No. 169754, Feb. 23, 2011
a certification election may be conducted during the
pendency of the cancellation proceedings. This is because at
the time the petition for certification elction was filed, the
petitioning union is presumed to possess the legal personality
to file the same. There is no basis for the employers assertion
that the cancellation of the unions certificate of registration
should retroact to the time of its issuance or that it effectively
nullified all of the unions activities, including its filing of the
petition for certification election and its demand to collectively
bargain. Moreover, the legitimacy of the legal personality of
the union cannot be collaterally attacked in a petition for
certification election proceeding but only through a separate
action instituted particularly for the purpose of assailing it.
b. San Miguel Foods Inc. vs. San Miguel Corp Supervisors
and Exempt Union, G.R. No. 146206, August 1, 2011 There
should be only one bargaining unit for the employees in
Cabuyao, San Fernando and Otis of Magnolia Poultry Products
Plant involved in dressed chicken processing and Magnolia
Poultry Farms engaged in live chicken operations. Certain
factors, such as specific line of work, working conditions,
location of work, mode of compensation, and other relevant
conditions do not affect or impede their commonality of
interest. Although they seem separate and distinct from each
other, the specific tasks of each division are actually
interrelated and there exists mutuality of interests which
warrants the formation of a single bargaining unit. Moreover,
the exclusion from bargaining units of employees who, in the
normal course of their duties, become aware of management
policies relating to labor relations, is the principal objective to
be accomplished by the confidential employee rule. Finally,
the proceedings for certification election are quasi-judicial in
nature, and therefore, decisions rendered in such proceedings
can attain finality. Applying the doctrine of res judicata, the
issue in the present case pertaining to the coverage of the
employees who would constitute the bargaining unit is now a
foregone conclusion.

ATTY. J. M. MARQUEZ
Page 18 of 38

c. Lepanto Consolidated Mining Company vs. The Lepanto

Capataz Union, G.R. No. 157086, February 18, 2013 the
capatazes in a large-mining company who were supervising
and instructing the miners etc., assessing and evaluating their
performance, making regular reports and recommending new
systems and procedure of work as well as guidelines for the
discipline of employees, were performing functions totally
different from those performed by the rank-and-file
employees. They differ from the rank-and-file and could by
themselves constitute a separate bargaining unit. These
capatazes or foremen are not rank-and-file employees
because they are an extension of the management, and as
such they may influence the rank-and-file workers under them
to engage in slowdown or similar activities detrimental to the
policies, interests or business objectives of the employers.

4.

STRIKES
a. GSIS et al., vs. Villaviza et al., G.R. No. 180291, July 27,
2010, En Banc CSC Res. No. 02-1316 regulates the political
rights of those in the government service by prohibiting
concerted activity or mass action if coupled with intent of
effecting work stoppage or service disruption in order to
realize their demands of force concession. However, not all
such activities are prohibited. Otherwise, we would be totally
depriving our brothers and sisters in the government service
of their constitutional right to freedom of expression. This is
true with regard to the employees wearing similarly colored
shirts, attending a public hearing at the GSIS-IU office,
bringing with them recording gadgets, clenching their fists,
some even badmouthing the guards and PGM Garcia for just
over an hour involving 20 or 30 employees. This is well
protected under the broad definition of public speech
concern. Respondents freedom of speech and expression
remains intact; see also GSIS vs. Kapisanan ng mga
Manggagawa sa GSIS, G.R. No. 170132, December 6, 2006
involving between 300 and 800 employees each day,
staging a walkout and participating in a mass protest or
demonstration outside the GSIS for 4 straight days, where the
Court citing 1983 Alliance of Government Workers, 1991
MPSTA and 1997 Jacinto, ruled that where the right of
government employees to organize is limited to the formation
of unions or associations, without including the right to strike.
They cannot engage in mass leaves, walkouts and other forms
of mass action; whether the mass action was not meant to
press for some economic demands, it has however taken a
disruptive approach to attain whatever it was they were
specifically after. The absence of such economic-related

ATTY. J. M. MARQUEZ
Page 19 of 38

demand, even if true, did not make such mass action less of a
prohibited concerted activity.
b. Automotive Engine Rebuilders Inc. et al., vs.
Progresibong Unyon ng Mga Manggagawa sa AER et
al., G.R. No. 160138 & 160192, July 13, 2011 the doctrine of
in pari delicto applies here where both the employer and the
certified union are at fault. Both parties filed charges against
each other, blaming the other party for violating labor laws.
The company filed a complaint against the union and its 18
members for illegal concerted activities.
It likewise
suspended 7 union members who tested positive for illegal
drugs. On the other hand, the union filed a countercharge
accusing the company of unfair labor practice, illegal
suspension and illegal dismissal. In other words, the company
claims that the union was guilty of staging an illegal strike
while the union claims that the company committed an illegal
lockout. As the parties are both at fault, they should be
restored to their respective positions prior to the illegal strike
and illegal lockout. The penalty of dismissal imposed against
the striking employees who staged a one day walkout was too
severe. Nonetheless, if reinstatement is no longer feasible,
the concerned employees should be given separation pay up
to the date set for the return of the complaining employees in
lieu of reinstatement. In its Resolution of January 16,
2013, the Supreme Court modified its main decision by
ordering the reinstatement with payment of backwages of
those union members who were not impleaded by the
company in its complaint for illegal strike. This award was not
however extended to those union members who failed to
write their names and affix their signatures in the
membership resolution attached to the petition for certiorari
filed with the Court of Appeals.
c. Abaria et al., vs. NLRC et al., G.R. No. 154113 & Nava et
al., vs. NLRC, G.R. No. 187778, Metro Cebu Community
Hospital vs. Nava et al., G.R. No. 187861 & Visayas
Community Medical Center vs. Yballe, G.R. No. 196156,
December 7, 2011 A local union which is not independently
registered cannot, upon disaffiliation from the federation,
exercise the rights and privileges granted by law to the
legitimate labor organizations; thus it cannot file a petition for
certification election. Besides, the NFL as the mother union
has the right to investigate members of its local chapter
under the federations Constitution and By-Laws, and if found
guilty to expel such members. MCCHI therefore cannot be
faulted for deferring action on the CBA proposal submitted by
the local union in view of the unions leadership conflict with
the national federation. The issue of disaffiliation is an intraunion dispute which must be resolved in a different forum in
an action at the instance of either or both the federation and

ATTY. J. M. MARQUEZ
Page 20 of 38

the local union or a rival labor organization, not the employer.

Moreover, not being a legitimate labor organization nor the
certified exclusive bargaining representative of MCCHIs rankand-file employees, the local union cannot demand from
MCCHI the right to bargain collectively in their behalf. Hence,
MCCHIs refusal to bargain then with the local cannot be
considered an unfair labor practice to justify the staging of the
strike. Consequently, the mandatory notice of strike and the
conduct of the strike vote report were ineffective for having
been filed and conducted by one which has no legal
personality as a legitimate labor organization. There is thus no
question that the local officers knowingly participated in the
illegal strike. Their termination was therefore valid and
justified. However as regards the union members, their
dismissal was illegal since there is no proof that they
committed illegal acts. They are generally entitled to
reinstatement but without backwages since they did not
render work for the employer during the strike. The 2004 case
of Bascon vs. CA where the Court awarded reinstatement plus
backwages must be set aside as there is an erroneous
application of the law insofar as the award of backwages is
concerned. The doctrine of stare decisis is not cast in stone.
For the Court, as the highest court of the land, may be guided
but is not controlled by precedent. Thus the Court, especially
with a new membership, is not obliged to follow blindly a
particular decision that it determines, after re-examination, to
call for a rectification. However, considering that 15 years had
lapsed from the onset of this labor dispute, and in view of the
strained relations that ensued, in addition to the reality of
replacements already hired by the hospital which had
apparently recovered from its huge losses, and with many of
the petitioners either employed elsewhere, already old and
sickly, or otherwise incapacitated, separation pay without
backwages is the appropriate relief.
d. C. Alcantara & Sons Inc., vs. CA et al., GR No. 155109 &
155135, March 14, 2012 Resolution, reconsidering its main
decision of Sept. 29, 2010 by deleting award of separation
pay by way of financial assistance, it appearing that the union
officers and members who participated in the illegal strike
also committed prohibited acts (i.e. threatening non-striking
employees, obstructing the ingress to and egress from
company premises & resisting and defying writ of preliminary
injunction); thus, making them guilty of serious misconduct.
Applying Toyota, the award of separation pay by way of
financial assistance must be deleted. Note however with
regard to the award of accrued salaries brought about by the
failure of the employer to exercise its option pending appeal,
whether to physically admit or reinstate the workers in the
payroll, the award is affirmed. This award was not given as
their salaries during the period of the strike. Rather they

ATTY. J. M. MARQUEZ
Page 21 of 38

constitute the employers liability to the employees for its

failure to exercise the option following the labor arbiters
decision to reinstate the union members as mandated by Art.
223 of the Labor Code. The employer must pay the employees
salaries during the period from notice of the labor arbiters
order of reinstatement pending appeal until the reversal
thereof by the NLRC.
e. Naranjo et al., vs. Biomedica Health Care, Inc. et al.,
G.R. No. 193789, September 19, 2012 the absence on
November 7, 2006 taken simultaneously by seven (7) of the
companys employees for various personal reasons i.e. loose
bowel movement, ophthalmology check-up, migraine,
not feeling well, childs meeting seven days after they
filed a complaint against their employer with the DOLE for
salary increases, failure to remit SSS contributions, etc., did
not constitute mass leave amounting to an illegal strike in
violation of the companys rules. Mass leave is not defined by
the Labor Code. The phrase mass leave may refer to a
simultaneous availment of authorized leave benefits by a
large number of employees in a company. Going on leave or
absenting ones self from work for personal reasons when
they have leave benefits is an employees right. Here, the
company did not submit a copy of the CBA or a company
memorandum or circular showing the authorized sick or
vacation leaves which the employees can avail of. Neither is
there any document to show the procedure by which such
leaves can be enjoyed. Absent such pertinent documentary
evidence, the Court can only conclude that the availment of
the employees of their respective leaves on November 7,
2006 was authorized, valid and in accordance with the
company or CBA rules on entitlement to and availment of
such leaves. Mass leave involves a large number of workers.
The records are bereft of evidence to establish how many
workers are employed in the company. No evidence that 5
employees constitute a substantial number of employees of
the company. The company has the burden to prove existence
of just causes, and this includes the duty to prove that the
leave was large-scale in character and unauthorized.

5.

CLASSIFICATION OF EMPLOYEES
a. William Uy Construction Corp., et al. vs. Trinidad, G.R.
No. 183250, March 10, 2010 a driver who worked for a
construction company for 16 years involving 35 separate
projects with intervals is a project and not a regular employee.
Intervals or gaps separated on contract from another.
Generally, length of service provides a fair yardstick for

ATTY. J. M. MARQUEZ
Page 22 of 38

determining when an employee initially hired on a temporary

basis becomes a permanent one, entitled to the security and
benefits of regularization. But this standard will not be fair, if
applied to the construction industry, simply because
construction firms cannot guarantee work and funding for its
payrolls based beyond the life of each project. And getting
projects is not a matter of course. They have no control over
the decisions and resources of project proponents or owners.
b. Dacuital et al., vs. L.M. Camus Engineering Corp., et
al., G.R. No. 176748, September 1, 2010 a project employee
is assigned to a project which begins and ends at determined
or determinable times. Employees who work under different
project employment contracts fo several years do not
automatically becomes regular employees; they can remain
as project employees regardless of the number of years they
work. Length of service is not a controlling factor in
determining the nature of ones employment. Their rehiring is
only a natural consequence of the fact that experienced
construction workers are preferred. In fact, employees who
are members of a work pool xxx do not become regular
employees by reason of that fact alone. They can either be
project employees or regular employees. Here however, the
petitioners were regular employees. Even though the absence
of a written contract does not by itself grant regular status to
petitioners, such contract is evidence that petitioners were
informed of the duration and scope of their work and their
status as project employees. In this case, where no other
evidence was offered, the absence of the employment
contracts raises a serious question of whether the employees
were properly informed at the onset of their employment of
their status as project employees. Moreover, there was no
evidence that the employer submitted a report to the DOLE of
the employees termination due to completion of a project as
required by D.O. No. 19.
c. Exodus International Construction Corp., vs. Biscocho,
et al., G.R. No. 166109, Feb, 23, 2011 there are two types of
employees in the construction industry. One type is the nonproject employees who are considered regular employees.
Here, when one project is completed, the complainants were
automatically transferred to the next project awarded to the
company. There was no employment agreement given to
them which clearly spelled out the duration of their
employment, the specific work to be performed and that such
is made clear to them at the time of hiring. Even assuming
they were initially hired as project employees, they acquire
the status of regular employees when they were continuously
rehired even after the cessation of a project and the tasks
performed are vital, necessary and indispensable to the usual
business or trade of the employer.

ATTY. J. M. MARQUEZ
Page 23 of 38

d. St. Paul College Quezon City et al., vs. Ancheta II, et

al., G.R. No. 169905, September 7, 2011 ---The employment
on probationary status of teaching personnel is not governed
purely by the Labor Code. The Labor Code is supplemented
with respect to the period of probation by special rules found
in the Manual of Regulations for Private Schools. The common
practice is for the employer and the teacher to enter into a
contract, effective for one school year. At the end of the
school year, the employer has the option not to renew the
contract, particularly considering the teachers performance.
If the contract is not renewed, the employment relationship
terminates. If the contract is renewed, usually for another
school year, the probationary employment continues. Again,
at the end of that period, the parties may opt to renew or not
to renew the contract. If renewed, this second renewal of the
contract for another school year would then be the last year
--- since it would be the third school yearof probationary
employment. At the end of this third year, the employer may
now decide whether to extend a permanent appointment to
the employee, primarily on the basis of the employee having
met the reasonable standards of competence and efficiency
set by the employer. Foe the entire duration of this three year
period, the teacher remains under probation. Upon the
expiration of his contract of employment, being simply on
probation, he cannot automatically claim security of tenure
and compel the employer to renew his employment contract.
e. University of the East et al., vs. Pepanio et al., G.R. No.
193897, January 23, 2013 A college teacher who was hired
on a semester-to-semester basis, serving for 6 1/3 years of
service on a full load cannot acquire regular or permanent
status, having lack the postgraduate degree prescribed by the
Manual of Regulations for Private Schools. The State through
BP No. 232 delegated the administration of the education
system and the supervision and regulation of educational
institutions to the Department of Education. Accordingly, in
promulgating the Manual, DECs was exercising its power of
regulation over educational institutions, which includes
prescribing the minimum academic qualifications for teaching
personnel. In 1994 the legislature transferred the power to the
CHEDS. And CHEDS charter authorized it to set minimum
standards for programs and institutions of higher learning.
The Manual continued to apply to colleges and universities
and suppletorily the Joint Order until 2010 when CHED issued
a Revised Manual which specifically applies only to institutions
involved in tertiary education. The requirement of a masteral
degree for tertiary education teachers is not unreasonable.
The operation of educational institutions involves public
interest. The government has the right to ensure that only
qualified persons, in possession of sufficient academic
knowledge and teaching skills, are allowed to teach in such
institutions. Government regulation in this field of human

ATTY. J. M. MARQUEZ
Page 24 of 38

activity is desirable for protecting, not only the students, but

the public as well as from ill-prepared teachers, who are
lacking in the required scientific or technical knowledge. They
may be required to take an examination or to possess
postgraduate degrees as prerequisite to employment.
6.

UNFAIR LABOR PRACTICE AND UNION MATTERS

a.

Tabigue, et al. vs. International Copra Export Corp.,

G.R. No. 183335, December 23, 2009 The right of any
employee or group of employees to, at any time, present
grievances to the employer under Art. 255 of the Labor Code
does not imply the right to submit the same to voluntary
arbitration.
Only disputes involving the union and the
company may be referred to the grievance machinery or
voluntary arbitrator. Moreover, the NCMB under E.0. 126 is
not a quasi-judicial agency. Hence, the Court of Appeals
cannot exercise appellate jurisdiction over the NCMB.

b.

General Milling Corp. vs. Casio, et al., G.R. No.

149552, March 10, 2010 Aside from just and authorized
causes for termination of employment, an employee may be
dismissed due to enforcement of the union security clause in
the CBA. Union security is a generic term, which
comprehends closed shop, union shop, maintenance of
membership, or any other form of agreement which imposes
upon employees the obligation to acquire or retain union
membership as a condition affecting employment. These
union security clauses are expressly recognized and allowed
under Art. 248 (e) of the Labor Code.

c.

PICOP Resources Inc., vs. Taneca et al., G.R. No.

160828, August 9, 2010 Art. 253 states the duty of both
parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement
during the 60 day period and/or until a new agreement is
reached by the parties. In conjunction therewith, Art. 256
states that 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. The last sentence of Art 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

ATTY. J. M. MARQUEZ
Page 25 of 38

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. Here, there
was no disloyalty which could be a ground to dismiss the
union members under the existing union security clause
because while they signed the petition for certification
election before the onset of the freedom period, such petition
was filed within such period (cited in PICOP Resources Inc.,
vs. Dequilla et al., , G.R. No. 172666, December 7, 2011,
where the Court ruled that the signing of the petition for
certification election before the onset of the freedom period,
but filing the same within such period is not enough proof of
disloyalty and violation of the union security clause which
would warrant dismissal. There is no proof of any
contemporaneous acts of resignation or withdrawal of union
membership or non-payment of union dues. The fact is,
private respondents remained in good standing with their
union, NAMAPRI-SPFL.)
d.

Bank of the Phil Islands vs. BPI Employees UnionDavao Chapter, G.R. No. 164301, August 18, 2010, En banc
the former FEBTC employees that were absorbed by BPI
upon the merger between the two banks should be covered
by the Union Shop Clause found in the existing CBA between
BPI and respondent Union. As such they are required to join
the certified bargaining agent existing in BPI, the surviving
corporation. Their joining the certified union would in fact be
in the best interest of the former FEBTC employees for it
unites their interests with the majority of employees in the
bargaining unit. It encourages employees solidarity and
affords sufficient protection to the majority status of the union
during the life of the CBA which are precisely the objectives of
union security clauses, such as the Union Shop Clause
involved herein. Moreover, under the law and jurisprudence,
only the following kinds of employees are exempted from its
coverage, namely, (i) employees who at the time of the union
shop agreement takes effect are bona fide members of a
religious organization which prohibits its members from
joining labor union on religious grounds; (ii) employees
already in the service and already members of a union other
than the majority at the time the union shop agreement took
effect; (iii) confidential employees who are excluded from the
rank-and-file bargaining unit; and (iv) employees excluded
from the union shop by express terms of the agreement. The
situation of the former FEBTC employees does not fall on any
of these exceptions. Finally, although all the assets and
liabilities of FEBTC were transferred to and absorbed by BPI
because of the merger, human beings are never embraced in
the term assets and liabilities. Xxx Assets and liabilities
should be deemed to refer only to property rights and

ATTY. J. M. MARQUEZ
Page 26 of 38

obligations of FEBTC and do not include the employment

contracts of its personnel. Nothing prevents the FEBTCs
employees from resigning or retiring and seeking employment
elsewhere instead of going along with the proposed
absorption. Employment is a personal consensual contract
and absorption by BPI of a former FEBTC employee without
the consent of the employee is in violation of an individuals
freedom to contract. xxx BPIs absorption of former FEBTC
employees was neither by operation of law nor by legal
consequences of contract. There was no government
regulation or law that compelled the merger of the two banks
or the absorption of the employees of the dissolved
corporation by the surviving corporation. Here the merger was
voluntarily entered into by both banks presumably for some
mutually acceptable consideration. In fact, the Corporation
Code does not also mandate the absorption of the employees
of the non-surviving corporation by the surviving corporation
in case of a merger. Note however Resolution dated
October 19, 2011 where the Court adopted the theory
of automatic assumption espoused by J.Brion and
modified its main decision, holding that BPI is deemed
to have assumed the employment contracts of FEBTC
employees upon effectivity of the merger without
break in the continuity of their employment even
without express stipulation in the Articles of Merger.
Taking a second look, the Court has come to agree with
J.Brions view that this view will be more in keeping with the
dictates of social justice and the State policy of according full
protection to labor. In a complete merger situation where
there is a total takeover by one corporation over another and
there is silence in the merger agreement on what the fate of
the human resource complement shall be, the latter should
not be lft in the legal limbo and should be properly provided
for, by compelling the surviving entity to absorb the
employees. This is what Section 80 of the Corporation Code
commands, as the surviving corporation has the legal
obligation to assume all the obligations and liabilities of the
merged constituent corporation. Xxx There is a need for the
surviving corporation to take responsibility for the affected
employees and to absorb them into its workforce where no
appropriate provision for the merged corporations human
resources component is made in the Merger plan. However,
there is nothing in the pronouncement shall impair the right of
an employer to terminate the employment of absorbed
employees for a lawful or authorized cause or the right of
such an employee to resign, retire or otherwise sever his
employment. Whether before or after the merger, subject to
existing contractual obligations. In this manner, J.Brions
theory of automatic assumption may be reconciled with the
majoritys concerns with the successor employers prerogative
to choose its employees and the prohibition against
involuntary servitude.

ATTY. J. M. MARQUEZ
Page 27 of 38

e. Park Hotel et al., vs. Soriano et al., G.R. No. 171118,

September 10, 2012 there exists unfair labor practice when
the employees were unceremoniously dismissed from work by
reason of their intent to form and organize a union. One
employee was barred from entering the company premises
with the companys General Manager shouting at him for
having participated in the formation of a union; the other was
coerced to resign by the companys owner and the General
Manager in the presence of their goons, while the other was
forced by the same company officials to sign a resignation
letter. Article 248 (a) of the Labor Code considers it unfair
labor practice when an employer interferes, restrains or
coerces employees in the exercise of their to self-organization.
The companys owner and the General Manager are not
exempt from liability. Verily, a corporation being a juridical
entity may act only through its directors, officers and
employees. Obligations incurred by them, while acting as
corporate agents, are not their personal liability but the direct
accountability of the corporation they represent. However
these corporate officers may be deemed solidarily liable with
the corporation for the termination of employees if they acted
with malice or bad faith as in this case where they acted
maliciously in order to suppress the workers right to selforganization.

f. Digital Telecommunications Philippines, Inc. vs. Digitel

Employees Union et al., G.R. No. 184903-04, October 10,
2012 It is management prerogative to close a department of
a telecommunication company. Its decision to outsource its
call center operation is a valid reason to close down the
operations of a department under which the affected
employees were employed. Such action constitutes
retrenchment as it involves a closure of a department, citing
the 2012 case of Waterfront Cebu City Hotel, not a closure or
cessation of business operations. However, the dismissal of
the affected employees was not done in good faith. Prior to
the cessation of the departments operations, the
Secretary/DOLE had assumed jurisdiction to enjoin the
impending strike. The company defied the assumption order
by abruptly closing down its department. The closure of a
department is not illegal per se. What makes it unlawful is
when the closure is undertaken in bad faith. The assumption
order directs employees to return to work, and the employer
to reinstate the employees. The existence of the assumption
order should have prompted the company to observe the
status quo. Instead, it proceeded to close down its
department. Moreover, the timing of the creation of I-tech
whose primary purpose was to provide call center/customer

ATTY. J. M. MARQUEZ
Page 28 of 38

contact service the same service provided by the companys

closed department is dubious. The target of the closure was
the union members-employees. The termination of service
was not a valid retrenchment; it was an illegal dismissal of
employees.
g. Goya Inc. vs. Goya Inc. Employees Union-FFW, G.R. No.
170054, January 21, 2013 A collective bargaining agreement
may validly delimit the free exercise of management
prerogative pertaining to the hiring of contractual employees
thru a contractor to perform temporary or occasional services.
To emphasize, declaring that a particular act falls within the
concept of management prerogative is significantly different
from acknowledging that such act is a valid exercise thereof.
What the VA and the CA correctly ruled was that the
companys act of outsourcing is within the purview of
management prerogative. Both did not say, however, that
such act is a valid exercise thereof. Here, the CBA of the
parties has already provided for the categories in the
establishment. [These] categories of employees particularly
with respect to casual employees [serve] as limitation to the
[company] prerogative to outsource parts of its operations
especially when hiring contractual employees. The work to be
performed by the contractor here was similar to that of the
casual employees. With the provision on casual employees,
the hiring of contractual employees from the agency therefore
is not in keeping with the spirit and intent of their CBA.
h. Octavio vs. Philippine Long Distance Telephone
Company, G.R. No. 175492, February 27, 2013 the claim of
an individual employee for salary increase under the terms of
the existing collective bargaining agreement (CBA) is a matter
subject of the grievance machinery, it involving the
interpretation and implementation of the pertinent provisions
of the CBA. From the denial of his claim by the UnionManagement Grievance Committee, his recourse pursuant to
the CBA was to elevate his grievance to the Board of
Arbitrators for final decision.
Here, he instead filed a
complaint with the arbitration branch of the NLRC nine
months after the resolution of the Union-Management
Grievance Committee. His complaint must therefore fail. By
failing to abide with the procedure prescribed by the CBA, he
is deemed to have waived his right to question the resolution
of the Committee. Clearly, he departed from the grievance
procedure mandated in the CBA and denied the Board of
Arbitrators the opportunity to pass upon a matter over which
it has jurisdiction. That has the effect of making the
Committees resolution binding upon him. Moreover, the
Committees resolution is not a modification of the CBA. Said
resolution is a product of the grievance procedure outlined in
the CBA itself. Finally, the denial of his claim for salary
increase did not violate Article 100 of the Labor Code against

ATTY. J. M. MARQUEZ
Page 29 of 38

diminution of benefits. Even assuming there is diminution of

benefits, Article 100 does not prohibit a union from offering
and agreeing to reduce wages and benefits of the employees
as the right to free collective bargaining includes the right to
suspend it. Bargaining covers a process of finding a
reasonable and acceptable solution to stabilize labormanagement relations to promote stable industrial peace.

7.

NLRC RULES OF PROCEDURE

a. Pentagon Steel Corp. vs. Court of Appeals, et al., G.R.
No. 174141, June 26, 2009 Actions and/or agreements made
by the parties during the conciliation proceedings before the
labor arbiter are treated as privileged communication under
Art. 233; thus, an offer of compromise does not constitute an
admission against interest.
b. Ramirez vs. Court of Appeals, et al., G.R. No. 182626,
December 4, 2009 while the bond may be reduced upon
motion by the employer, this is subject to the conditions that:
(1) the motion to reduce the bond shall be based on
meritorious grounds; and (2) a reasonable amount in relation
to the monetary award is posted by the appellant; otherwise
the filing of such motion shall not stop the running of the
period to perfect an appeal. The qualification effectively
requires that unless the NLRC grants the reduction of the cash
bond within the 10 day reglementary period, the employer is
still expected to post the cash or surety bond securing the full
amount within the said 10 day period. Nothing in the Labor
Code or the NLRC Rules of Procedure authorizes the posting of
a bond that is less than the monetary award in the judgment,
or deems such insufficient positing as sufficient to perfect the
appeal.
c. Anabe vs. Asian Construction (AsiaKonstrukt), et al.,
G.R. No. 183233, December 23, 2009 Under Art. 291 of the
Labor Code, money claims shall be filed within 3 years from
the time the case of action accrued; otherwise, they shall be
barred forever. In the absence of a specific provision of the
Code on when a monetary claim accrues, the time for
prescription shall be counted from the day the action may be
brought using Art. 1150 of the Civil Code, referring to the day
a claim started as a legal possibility, that is the time the
employee received his monthly paychecks.
d. Real vs. Sangu Phils., Inc., et al., G.R. No. 168757, January
19, 2011 To determine whether a case involves an intracorporate controversy, and is to be heard and decided by the
RTC designated by the Court xxx, two elements must concur:
(a) the status or relationship of the parties, and (2) the nature

ATTY. J. M. MARQUEZ
Page 30 of 38

of the question that is the subject of their controversy. Xxx

The second element requires that the dispute among the
parties be intrinsically connected with the regulation of the
corporation. If the nature of the controversy involves matters
that are purely civil in character, necessarily, the case does
not involve an intra-corporate controversy. Here the petitioner
who was undisputedly a stockholder and director was
appointed as Manager. However there was no proof of any
board resolution that he was appointed by the Board. An office
is created by the charter of the corporation and the officer is
elected (or appointed) by the directors or stockholders. There
is no intra-corporate relationship between the parties insofar
as petitioners complaint for illegal dismissal is concerned.
Moreover, the reasons for terminating the services of
petitioner i.e. absences, loss of trust, cutting down operational
expenses have something to do with his being a Manager and
nothing with his being a director or stockholder. In sum,
petitioners removal as Manager by the Board involves an
issue of illegal dismissal which is within the jurisdiction of the
Labor Arbiter and not the regular court.; see also Matling
Industrial and Commercial Corp., et al., vs. Coros, G.R.
No. 157802, October 13, 2010 - Under Sec. 25 of the
Corporation Code, the corporate officers are the President,
Secretary, Treasurer and such other officers as may be
provided in the By-laws. Accordingly, the corporate officers in
the context of PD 902-A are exclusively those that are given
that character either by the Corporation Code or by the
corporations By-laws. A different interpretation can easily
leave the way open for the Board of Directors to circumvent
the constitutionally guaranteed security of tenure of the
employee by the expedient inclusion in the By-Laws of an
enabling clause on the creation of just any corporate officer
position. Moreover, the Board could not validly delegate the
power to create a corporate office to the President, in light of
Sec. 25 of the Corporation Code requiring the Board itself to
elect the corporate officers. Verily, the power to elect the
corporate officers was a discretionary power that the law
exclusively vested in the Board, and could not be delegated to
subordinate officers or agents. Thus the office of Vice
President for Finance and Administration created by the
corporations President pursuant to an enabling clause in the
By-laws was an ordinary, not a corporate, office.; see also
Okol vs. Slimmers World International, et al., G.R. No.
160146, December 11, 2009 petitioner was a director and
officer of Slimmers World. The charges of illegal suspension,
illegal dismissal, unpaid commissions etc., fall squarely within
the ambit of intra-corporate disputes. A corporate officers
dismissal is always a corporate act.
The question of
remuneration involving a stockholder and officer, not a mere
employee is not a simple labor problem but a matter that
comes within the area of corporate affairs and management

ATTY. J. M. MARQUEZ
Page 31 of 38

and is a corporate controversy. It is not the NLRC but the

regular courts which have jurisdiction over the present case.
e. Islriz Trading/Lu vs. Capada et al., G.R. No. 168501,
January 31, 2011 Citing Garcia En Banc, even if the order of
reinstatement of the Labor Arbiter is reversed on appeal, the
employer is still obliged to reinstate and pay the wages of the
employee during the period of appeal until reversal by a
higher court or tribunal. The reinstated employee is entitled to
his accrued salaries from the time the employer received a
copy of the decision of the Labor Arbiter declaring the
employees dismissal illegal and ordering his reinstatement up
to the date of the NLRC resolution overturning that of the
Labor Arbiter. It is during the said period that the reinstated
employee is deemed to have been illegally dismissed and is
entitled to reinstatement pursuant to the labor arbiters
decision which was the one in effect at that time. Beyond that
period, the NLRC resolution declaring that there was no illegal
dismissal is already the one prevailing. From such point, the
employees accrued salary did not accrue not only because
there is no more illegal dismissal to speak of but also because
the employee has not yet been actually reinstated and has
rendered services to his employer. However, the employee
may be barred from collecting the accrued wages, if it is
shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer. The two
fold test in determining whether an employee is barred from
recovering his accrued wages, to wit: (a) there must be actual
delay or that the order of reinstatement pending appeal was
not executed prior to its reversal; and (b) the delay must not
be due to the employers unjustified act or omission. Here, the
employer has to pay because it did not comply at all with the
order of reinstatement after it had received the decision of the
labor arbiter, and a writ of execution was issued, giving as
reason it had to refer the matter to its lawyer.
f. Panlilio et al., vs. RTC Br. 51, City of Manila, G.R. No.
173846, Feb. 2, 2011 where the officers of a corporation are
the subject of criminal prosecution under the SSS Law for nonremittance of contributions, the rehabilitation of the
corporation is not a ground for the extinction of the officers
criminal liabilities. There is no reason why criminal
proceedings should be suspended during corporate
rehabilitation. Such prosecution has no bearing on the
pending rehabilitation since the officers were charged in their
individual capacities. The rehabilitation receiver can still fully
discharge his functions as he is not charged to defend the
corporate officers. If there is anything that the rehabilitation
receiver might be remotely interested in is whether the court
also rules that these corporate officers are civilly liable. In
such an event of civil award, the same shall falls under the
category of claims, the execution of which would be subject to

ATTY. J. M. MARQUEZ
Page 32 of 38

the stay order issued by the rehabilitation court. Only to this

extent can the order of suspension be considered obligatory
upon any court, tribunal, branch or body where there are
pending actions for claims against the distressed corporation.
g. Ando vs. Campo, G.R. No. 184007, Feb. 16, 2011 when a
property belong to the spouses as conjugal is levied upon by
the NLRC sheriff to satisfy a judgment award in the labor case,
the remedy is to file a third party claim under the NLRC
Manual on the Execution of Judgment. The rules of court apply
only by analogy or in a suppletory character. The power of
the NLRC or the courts to execute its judgment extends only
to properties unquestionably belonging to the judgment
debtor alone. The property belongs to a third party, i.e.
conjugal partnership, and petitioners wife may be considered
a third party. The wife who is not a party to the labor case
stands to lose the property without due process of law. Such
third party claim is within the cognizance of the NLRC and not
the regular court. Execution is an essential part of the
proceedings before the NLRC. Further underscoring the RTCs
lack of jurisdiction is Article 254 of the Labor Code.
h. DUP Sound Phils et al., vs. Court of Appeals et al., G.R.
No. 168317, November 21, 2011 ---Reinstatement means
restoration to a state or condition from which one had been
removed or separated. The person reinstated assumes the
position he had occupied prior to his dismissal. Reinstatement
presupposes that the previous position from which one had
been removed still exists, or that there is an unfilled position
which is substantially equivalent or of similar nature as the
one previously occupied by the employee. Based on the
foregoing principles, it cannot be said that the petitioners
intended to reinstate private respondent neither to his former
position under the same terms and conditions nor to a
substantially equivalent position. To begin with, the notice
that petitioners sent to private respondent requiring the latter
to report back to work is silent with regard to the position or
exact nature they wanted the private respondent to assume.
Indeed, as it turned out, petitioners had other plans for
private respondent. Thus, private respondents assignment to
a different job as well as transfer of work assignment without
any justification therefor, cannot be deemed as faithful
compliance with the reinstatement order. Private respondent
may not be faulted for rejecting what petitioners claim as
compliance with the order to reinstate the former given the
totally different nature of the job he was afterwards given and
the conditions and working environment under which he was
to perform such job.
i. Sarona vs. NLRC, et al., G.R. No. 185280, January 18, 2012
The claim of the employer that the employee is barred from
questioning with the Court of Appeals under Rule 65 and

ATTY. J. M. MARQUEZ
Page 33 of 38

eventually to the Supreme Court under Rule 45 the manner by

which his backwages and separation pay were computed
because earlier he had moved for the execution of the NLRCs
decision and was paid in full the amount of the monetary
award shortly after a writ of execution was issued is without
merit. The petitioners receipt of the monetary award
adjudicated by the NLRC is not absolute, unconditional and
unqualified. His motion to release award contains a
reservation, stating in his prayer that it is without prejudice to
the outcome of the petition with the CA. It is settled that the
prevailing partys receipt of the full amount of the judgment
award pursuant to a writ of execution issued by the labor
arbiter does not close or terminate the case if such receipt is
qualified as without prejudice to the outcome of the petition
for certiorari with the CA. The finality of the NLRCs decision
does not preclude the filing of a petition for certiorari under
Rule 65. That the NLRC issues an entry of judgment after the
lapse of ten days from the parties receipt of its decision will
only give rise to the prevailing partys right to more for the
execution thereof but will not prevent the CA from taking
cognizance of a petition for certiorari on jurisdictional and due
process considerations. In turn, the decision of the CA may be
appealed to the Supreme Court under Rule 45, which would
be a continuation of the appellate process over the original
case before the CA. Since an appeal to the Supreme Court is
not an original and independent action, the filing of a petition
for review under Rule 45 cannot be barred by the finality of
the NLRC decision in the same way that a petition for
certiorari under Rule 65 with the CA cannot. Consequently, if
the NLRC decision is reversed and set aside, it is considered
void ab initio and thus had never become final and executory.
j. 3rd Alert Security and Detective Services, Inc. vs. Navia,
G.R. No. 200653, June 13, 2012 Art. 223 of the Labor Code
provides that in case there is an order of reinstatement, the
employer must admit the dismissed employee under the
same terms and conditions, or merely reinstate the employee
in the payroll. The order shall be immediately executor. Thus,
the employer cannot escape liability by simply invoking that
the reinstated worker did not report for work. The law states
that the employer must still reinstate the employee in the
payroll. Xxx Here, in spite the finality of the decision of the
Labor Arbiter after the same has reached the NLRC on appeal,
no earnest effort was made to reinstate the dismissed work.
The employer resorted to legal tactics to frustrate the
execution of the labor arbiters order; for about 4 years, it
evaded the obligation to reinstate the dismissed worker. By
doing so, it has made a mockery of justice. We thus find it
proper under the circumstances to impose treble cots against
the employer for its utter disregard to comply with the writ of
execution.

ATTY. J. M. MARQUEZ
Page 34 of 38

k. Radio Philippines Network et al. vs. Yap et al., G.R. No.

187713, August 1, 2012 An order reinstating a dismissed
employee is immediately executory without need of a writ of
execution. The new NLRC Rules of Procedure now requires the
employer to submit a report of compliance within 10 calendar
days from receipt of the LAs decision, disobedience to which
clearly denotes a refusal to reinstate. The employee need no
longer file a motion for issuance of a writ of execution, since
the LA shall thereafter motu proprio issue the writ. With the
new rules, there will be no difficulty in determining the
employers intransigence in immediately complying with the
order. In case of strained relations or non-availability of
positions, the employer is given the option to reinstate the
employee merely in the payroll, precisely in order to avoid the
intolerable presence in the workplace of the unwanted
employee. Here the circumstances of the case where the
company was accused of being in complicit in the plot to
expel them from the union and to terminate their
employment, more than amply show that the physical
restoration of these workers to their former positions would be
impractical and would hardly promote the best interest of
both parties. Moreover, the proposal to pay the workers
salaries through ATM cards, now a wide practice cannot be
said to be prejudicial or oppressive since it would not entail
any unusual effort by the workers to collect their money. Due
to the companys erratic cash flows, there was nothing illegal
also in making the payments on staggered basis as the law
only requires that the fortnightly intervals be observed.
l. Portillo vs. Lietz, Inc. et al., G.R. No. 196539, October 10,
2012 a claim by an employee for unpaid salaries filed with
the Labor Arbiter cannot be offset against the employers
claim for liquidated damages due to the employees breach of
the non-compete covenant of her employment contract. Citing
the 1983 case of Singapore Airlines Limited, [n]ot all disputes
between an employer and his employee fall within the
jurisdiction of the labor tribunals. Applying the 1988 case of
San Miguel Corp., [t]he reasonable causal connection with
employer-employee relationship is a requirement not only in
employees money claims against the employer but is,
likewise, a condition when the claimant is the employer. The
2000 case of Banez is not applicable. There is no causal
connection between the employees claim for unpaid wages
and the employers claim for damages for the alleged breach
of non-compete employment covenant. The employees claim
for unpaid salaries did not have anything to do with her
alleged violation of the employment contract, as in fact, her
separation from employment is not rooted in the alleged
contractual violation. She resigned from her employment; she
was not dismissed. Moreover, the alleged contractual violation
did not arise during the existence of the employer-employee
relationship. It was a post-employment matter, a post-

ATTY. J. M. MARQUEZ
Page 35 of 38

employment violation. Citing the 1994 case of Dai-Ichi, a

[n]on-compete clause as in the Goodwill Clause with a
stipulation that a violation thereof makes the employee liable
to his former employer for liquidated damages, refers to postemployment relation of the parties, (the employee has ceased
her employment when she resigned). Article 217 of the Labor
Code, paragraph 4 - [c]laims for actual, moral, exemplary
and other forms of damages arising from the employeremployee relations does not automatically cover all
disputes between an employer and its employee. Where the
cause of action was within the realm of Civil Law, jurisdiction
belongs to the regular courts. The non-compete clause is a
contractual undertaking effective after the cessation of the
employment relationship between the parties. In accordance
with jurisprudence, breach of the undertaking is a civil law
dispute, not a labor case. The offsetting cannot be allowed.
The difference in the nature of the credits that one has
against the other, conversely, the nature of the debt one owes
another, which difference in turn, results in the difference of
the forum where the different credits can be enforced,
prevents the application of compensation. Simply, the labor
tribunal in an employees claim for unpaid wages is without
authority to allow the compensation of such claims against
the post employment claim of the former employer for breach
of a post employment condition. The labor tribunal does not
have jurisdiction over the civil case of breach of contract.
Indeed, the application of compensation is effectively barred
by Article 113 of the Labor Code which prohibits wage
deductions except in three circumstances.
m.Gonzales vs. Solid Cement Corporation, et al., G.R. No.
198423, October 23, 2012, En Banc, J.Brion There is nothing
illegal in the re-computation of an illegal dismissal decision
which contains a monetary award. This step is a necessary
consequence that flows from the nature of the illegality of
dismissal declared in that decision. A re-computation (or an
original computation, if no previous computation has been
made) is part of the law specifically Article 279 of the Labor
Code and the established jurisprudence on this provision
that is read into the decision. By the nature of an illegal
dismissal case, the reliefs continue to add on until full
satisfaction, as expressed under Article 279 of the Labor
Code. The re-computation of the consequences of illegal
dismissal upon execution of the decision does not constitute
an alteration or amendment of the final decision being
implemented. The illegal dismissal ruling stands: only the
computation of the monetary consequence of this dismissal is
affected and this is not a violation of the principle of
immutability of final judgments. That the amount the
employer shall now pay has greatly increased is a
consequence that it cannot avoid as it is the risk that it ran
when it continued to seek recourses against the labor arbiters

ATTY. J. M. MARQUEZ
Page 36 of 38

decision. On the components of backwages: a) salary

increases from the time of dismissal until actual reinstatement
are excluded; b) benefits not yet granted at the time of
dismissal are excluded; c) 12% interest must accrue on the
total unpaid judgment amount, from the time the Courts
decision (on the merits in the original case) became final; d)
payment of 13th month pay and salaries due after the LAs
decision until the illegally dismissed employee was reinstated
in the payroll
n. Martos et al., vs. New San Jose Builders, Inc. G.R. No.
192650, October 24, 2012 The dismissal of the complaints
filed by those who did not verify their position papers was
correct. The lone signature of Martos would have been
sufficient if he was authorized by his co-petitioners to sign for
them. Unfortunately, petitioners failed to adduce proof that he
was so authorized. The verification requirement is significant,
as it is intended to secure an assurance that the allegations in
the pleadings are true and correct and not the product of the
imagination or matter of speculation, and that the pleading is
filed in good faith. The absence of a proper verification is
cause to treat the pleading as unsigned and dismissible.

o. Sang-An vs. Equator Knights Detective & Security

Agency, Inc. G.R. No. 173189, February 13, 2013 The
requirement of a cash or surety bond as provided under
Article 223 of the Labor Code only applies to appeals from the
orders of the LA to the NLRC. It does not apply to special civil
actions such as petition for certiorari under Rule 65 of the
Rules of Court. In fact, nowhere under Rule 65 does not state
that a bond is required for the filing of the petition.
8.

VOLUNTARY ARBITRATION & PROCEEDINGS

a. Teng vs. Pahagac, et al., G.R. No. 169704, November 17,
2010 Art. 262-A does not prohibit the filing of a motion for
reconsideration. Xxx By allowing a 10 day period, the obvious
intent of Congress in amending Art. 263 to Art. 262-A is to
provide an opportunity for the party adversely affected by the
VAs decision to seek recourse via a motion for
reconsideration or a petition for review under Rule 43 of the
Rules of Court filed with the CA. For this reason, an appeal
from administrative agencies to the CA via Rule 43 requires
exhaustion of available remedies as a condition precedent to
a petition under that Rule. In the exercise of its power to
promulgate implementing rules and regulations, an
implementing agency, such as the DOLE is restricted from
going beyond the terms of the law it seeks to implement; it

ATTY. J. M. MARQUEZ
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should neither modify nor improve the law. By disallowing

reconsideration of the CAs decision, Sec. 7, Rule XIX of DO
40-03 and Sec 7 of the 2005 Procedural Guidelines went
directly against the legislative intent behind Art. 262-A of the
Labor Code. See also Lepanto Consolidated Mining
Company vs. The Lepanto Capataz Union, G.R. No.
157086, February 18, 2013 where the filing of a motion for
reconsideration with the DOLE Secretary involving the latters
decision of an appeal from an order of certification election
was considered a precondition to the filing of a petition for
certiorari, it being consistent with the principle of exhaustion
of administrative remedies to afford every opportunity to the
DOLE Secretary to resolve the matter and correct itself if need
be, citing the 2010 Teng case, this notwithstanding Sec. 15,
Rule XI, Book V of the Omnibus Rules which states that the
decision of the Secretary on the appeal shall be final and
executory.
b. BPI Employees Union-Metro Manila et al., vs. Bank of
the Philippine Islands, G.R. Nos. 178699 & 178735,
September 21, 2011 Sec.1, Rule 41 of the Rules of Court
explicitly provides that no appeal may be taken from an order
of execution, the remedy of an aggrieved party being an
appropriate special civil action under Rule 65 of the Rules of
Court. Thus, BPI correctly availed of the remedy of certiorari
under Rule 65 of the Rules of Court when it assailed the
December 6, 2005 order of execution of the Voluntary
Arbitrator.
c. Ace Navigation Co., Inc. et al., vs. Fernandez, G.R. No.
197309, October 10, 2012 a complaint for disability benefits
by a seaman against the vessel owner where the parties are
covered by the AMOSUP-TCC collective bargaining agreement
(CBA) which stipulates that disputes between the seafarer and
the company shall be settled through the grievance
machinery and mandatory voluntary arbitration is outside the
jurisdiction of the Labor Arbiter. Aside from Sec. 3, Article XIII
(on Social Justice & Human Rights) of the Constitution, Articles
260 to 262 of the Labor Code, Sec. 29 of the POEA-SEC on
Dispute Settlement Procedures governs the employment of
Filipino seafarers where there exists a CBA between the
parties. Here, the CBA, like the grievance machinery created
under Article 261 of the Labor Code, has a two-tiered
mechanism, with voluntary arbitration as the last step. We
reject the seafarers argument that he never referred his claim
to the grievance machinery and that the parties are not the
union and the employer. Needless to state, no such distinction
exists in the parties CBA and the POEA-SEC. We are upholding
the jurisdiction of the voluntary arbitrator or panel of
voluntary arbitrators over the present dispute, not only
because of the clear language of the parties CBA on the

ATTY. J. M. MARQUEZ
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matter; more importantly, we so uphold the voluntary

arbitrators jurisdiction, in recognition of the States express
preference for voluntary modes of dispute settlement, such as
conciliation and voluntary arbitration as expressed in the
Constitution, the law and the rules. In fact even the IRR of RA
No. 10022 even lends support to our ruling as we held in the
2012 estate of Nelson R. Dulay thus: [I]t is settled that when
the parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration
then that procedure should be strictly observed.

GOOD LUCK!!!
Jmm289/2012 Bar review Handouts