Flight Attendants and Steward Association of the Phils

vs.
Phil Airlines, G.R. No. 178083, October 2, 2009, see July 22, 2008
Facts:
Petitioner FASAP is the duly certified collective bargaining representative of PAL flight
attendants and stewards, or collectively known as PAL cabin crew personnel. Respondent PAL
is a domestic corporation organized and existing under the laws of the Republic of the
Philippines, operating as a common carrier transporting passengers and cargo through
aircraft. On June 1998, PAL retrenched 5,000 of its employees,including more than 1,400 of its
cabin crew personnel. PAL adopted the retrenchment scheme allegedly to cut costs and
mitigate huge financiallosses as a result of a downturn in the airline industry brought about
by the Asian financial crisis. Prior to the full implementation of the assailedretrenchment
program, FASAP and PAL conducted a series of consultations and meetings and explored all
possibilities of cushioning the impactof the impending reduction in cabin crew personnel.
However, the parties failed to agree on how the scheme would be implemented. Thus
PALunilaterally resolved to utilize the criteria set forth in the Collective Bargaining Agreement
in retrenching cabin crew personnel: that is, that retrenchment shall be based on the
individual employees efficiency rating and seniority. On June 1998, FASAP filed a Complai nt
against PAL for unfair labor practice, illegal retrenchment with claims for reinstatement and
payment of salaries, allowances and backwages of affected FASAP members, actual, moral
and exemplary damages with a prayer to enjoin the retrenchment program then being
implemented.
Issue:
Whether or not PALs retrenchment scheme was justified
Ruling:
While it is true that the exercise of this right is a prerogative of management, there must be
faithful compliance with substantive and proceduralrequirements of the law and
jurisprudence. The burden falls upon the employer to prove economic or business losses with
sufficient supportingevidence. Any claim of actual or potential business losses must satisfy
certain established standards, all of which must concur, before anyreduction of personnel
becomes legal. These are:
(1) That retrenchment is reasonably necessary and likely to prevent business losses which, if
already incurred, are not merely de minimis, butsubstantial, serious, actual and real, or if only
expected, are reasonably imminent as perceived objectively and in good faith by the
employer;
(2) That the employer served written notice both to the employees and to the Department of
Labor and Employment at least one month prior tothe intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one (1)
month pay or at least one-half () month pay for every year of service, whichever is higher;

(4) That the employer exercises its prerogative to retrench employees in good faith for the
advancement of its interest and not to defeat or circumvent the employees right to security
of tenure; and,
(5) That the employer used fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among theemployees, such as status, efficiency,
seniority, physical fitness, age, and financial hardship for certain workers.PAL failed to comply
with the first requirement as in the instant case, PAL failed to substantiate its claim of actual
and imminent substantiallosses which would justify the retrenchment of more than 1,400 of
its cabin crew personnel. As to the fourth requirement, PAL had implementedits retrenchment
program in an arbitrary manner and with evident bad faith, which prejudiced the tenurial
rights of the cabin crew personnel. Asto the fifth requirement, in assessing the overall
performance of each cabin crew personnel, PAL only considered the year 1997. This makes
the evaluation of each cabin attendants efficiency rating capricious and prejudicial to PAL
employees covered by it. WHEREFORE, the instantpetition is GRANTED.

Coca- Cola Bottlers Philippines, Inc.

v.
Del Villar, G.R. No. 163091, October 6, 2010
Facts:
Coca-Cola hired respondent Angel U. del Villar (Del Villar) on May 1, 1990 as Physical
Distribution Fleet Manager with a job grade of S-7 andmonthly salary of P50,000.00, aside
from the use of a company car, gasoline allowance, and annual foreign travel, among other
benefits. In1992, as part of the reorganization of the Company, Del Villar became the
Transportation Services Manager, under the Business Logistic Directorate, headed by Director
Edgardo I. San Juan (San Juan).
As Transportation Services Manager, Del Villar prepares the budget for the vehicles of the
Company nationwide. Del Villar submitted a Report tothe Company President, detailing an
alleged fraudulent scheme undertaken by certain Company officials in conspiracy with local
truckmanufacturers, overpricing the trucks purchased by the Company by as much as
P70,000.00 each. Del Villar implicated San Juan and Jose L.Pineda, Jr., among other Company
officials, as part of the conspiracy.
Pineda then served as the Executive Assistant in the Business LogisticDirectorate in charge of
the Refrigeration Services of the Company.Seven months after the submission of his Report on
the fraudulent scheme of several company officials, Del Villar received a Memorandum
fromSan Juan, informing him that (1) he was designated as Staff Assistant to the Corporate
Purchasing and Materials Control Manager, with a jobgrade of NS-VII; (2) with Del Villars new
assignment, he ceased to be entitled to the benefits accruing to an S-7 position under
existing companyrules and policies; and (3) Del Villar was to turn over the vehicle assigned to
him as Transportation Services Manager to Pineda by July 10,1996.
Although as the Staff Assistant of the Corporate Purchasing and Materials Control Manager,
Del Villar continued to receive the same salary asTransportation Services Manager, but his car
and other privileges were withdrawn and he spent his time at his new post sitting "at a desk
with no meaningful work whatsoever." Del Villar believed that he was demoted by the
Company to force him to resign. Unable to endure any further theharassment, Del Villar filed
with the Arbitration Branch of the NLRC on November 11, 1996 a complaint against the
Company for illegal demotionand forfeiture of company privileges.According to Coca-Cola [Del
Villar] was not outrightly dismissed; instead, he was removed from his former position as

Transportation ServicesManager, and demoted to Staff Assistant to the Corporate Purchasing

and Materials Control Manager.
The Company embarked on areorganization of the Business Logistic Directorate. As a result,
the functions related to Refrigeration were assigned to the TransportationServices Manager,
which was renamed the Transportation and Refrigeration Services Manager.The Company
failed to appear, despite due notice, at the scheduled preliminary conference before the NLRC
Arbitration Branch. The Companyreasoned that in appointing Del Villar as the Staff Assistant
of the Corporate Purchasing and Materials Control Manager, from his former positionas
Transportation Services Manager, the Company was merely exercising its inherent
management prerogative to transfer an employee fromone position to another. They
contended that Del Villar had no vested right to the privileges he previously enjoyed as
Transportation ServicesManager.
Since the various programs will affect some of its employees, in good faith the Company has
initiated a special program called "ProjectNew Start". This program is intended to assist
employees whose positions will be declared redundant with the implementation of new
distributionsystems, utilization of improved operational processes and functional reorganizations.Labor Arbiter rendered a Decision in Del Villars favor.
The Labor Arbiter held that the allegations in Del Villars complaint sufficiently presented
acause of action against the Company.Del Villar appears to have been singled out or
discriminated upon due to his having reported the 1996 truck scam, and his present isolation
canbe seen as a punishment for acting in a righteous and forthright manner. Otherwise, as a
"Staff Assistant" [Del Villar] should have been givensome meaningful or responsible work
appurtenant to the job designation.NLRC reversed the Labor Arbiter, reasoning
that:virtualawContrary to the Labor Arbiters pronouncement that [the Company] should have
rebutted allegations of bad faith and malice, we are more inclinedto apply the presumption of
good faith.
Mere conclusions of fact and law should not be used as bases for an automatic finding of bad
faith. As it is, we do not even see any disclosure of the scam and his alleged demotion. If
indeed the so-called "great grandmother of Coca cola scams of 1996" were true, the logical
consequence of such disclosure is for the president of the company to dismiss the erring
employees and officers for their highly irregular acts and not to penalize [Del Villar] for
making such disclosure.This is amply supported by the fact that the [the Company] conducted
a thorough investigation of the reported scam and even obtained theservices of an
independent auditor to determine whether the alleged anomalous transactions were actually
irregular and/or questionable. Thismanifests that [Del Villars] disclosure was taken seriously
contrary to his claims of discrimination. Accordingly, it cannot be said that the act of
the[Company] was retaliatory or penal in nature nor tainted with bad faith and/or malice.
Otherwise, [the Company] would not have given graveattention to the disclosure of [Del
Villar].
A company cannot, however, be reasonably expected to provide the same benefits to an
employee whose position for example, requires that hestays in the office during working
hours. Benefits, privileges and perquisites that attach to a certain position do not provide
sufficient bases for determining the superiority or inferiority of the position so held.

Issue:
Whether or not Company, in transferring Del Villar from the position of Transportation
Services Manager to Staff Assistant to the CorporatePurchasing and Materials Control
Manager, validly exercised its management prerogative or committed constructive dismissal,
or demotion?Whether or not there has been redundancy in the position held by Del Villar that
justified the company from the act of taking the position fromhim?
Ruling:
In the pursuit of its legitimate business interest, management has the prerogative to transfer
or assign employees from one office or area of operation to another provided there is no
demotion in rank or diminution of salary, benefits, and other privileges; and the action is not
motivatedby discrimination, made in bad faith, or effected as a form of punishment or
demotion without sufficient cause. The right of employees to securityof tenure does not give
them vested rights to their positions to the extent of depriving management of its prerogative
to change their assignmentsor to transfer them.virtuallawlibraryManagerial prerogatives,
however, are subject to limitations provided by law, collective bargaining agreements, and
general principles of fair playand justice. But, like other rights, there are limits thereto.
The managerial prerogative to transfer personnel must be exercised without graveabuse of
discretion, bearing in mind the basic elements of justice and fair play. Having the right should
not be confused with the manner in whichthat right is exercised.Thus, it cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker. In particular, the
employer must be able to showthat the transfer is not unreasonable, inconvenient or
prejudicial to the employee; nor does it involve a demotion in rank or a diminution of
hissalaries, privileges and other benefits. Should the employer fail to overcome this burden of
proof, the employees transfer shall be tantamount toconstructive dismissal, which has been
defined as a quitting because continued employment is rendered impossible, unreasonable or
unlikely;as an offer involving a demotion in rank and diminution in pay. Likewise, constructive
dismissal exists when an act of clear discrimination, insensibility or disdain by an employer
has become so unbearable tothe employee leaving him with no option but to forego with his
continued employment.uallawlibraryAfter a careful scrutiny of the records, we agree with the
Labor Arbiter and the Court of Appeals that the Company failed to discharge this burdenof
proof. The Company and its officials attempt to justify the transfer of Del Villar by alleging his
unsatisfactory performance as TransportationServices Manager. The Company disclosed that:
[Del Villar] displayed an utterly woeful performance.
He was unable to submit basic data as totype and brand of vehicles with highest/lowest
maintenance cost as requested. [Del Villar] could not even update the records of his office.
Hecould not work with minimum or no supervision. His activities needed to be closely and
constantly monitored by his superiors. [Del Villar] lackedinitiative and had to be constantly
reminded of what to do. He merited a mediocre grade of 2 in a scale of one (1) to five (5), the
latter number being the highest gradeWe are unconvinced. The dismal performance
evaluations of Del Villar were prepared by San Juan and Pineda after Del Villar already
implicatedhis two superiors in his Report dated January 4, 1996 in an alleged fraudulent
scheme against the Company. More importantly, we give weight tothe following instances
establishing that Del Villar was not merely transferred from the position of Transportation
Services Manager to theposition of Staff Assistant to the Corporate Purchasing and Materials

Control Manager; he was evidently demoted. A transfer is a movement from one position to
another which is of equivalent rank, level or salary, without break in service. Promotion, on
theother hand, is the advancement from one position to another with an increase in duties
and responsibilities as authorized by law, and usuallyaccompanied by an increase in salary.
Conversely, demotion involves a situation where an employee is relegated to a subordinate or
less important position constituting a reduction to a lower grade or rank, with a corresponding
decrease in duties and responsibilities, and usuallyaccompanied by a decrease in salary.
Del Villars demotion is readily apparent in his new designation. Formerly, he was the
Transportation Services Manager; then he was made aStaff Assistant a subordinate to another
manager, particularly, the Corporate Purchasing and Materials Control Manager.Second, the
two posts are not of the same weight in terms of duties and responsibilities. Del Villars
position as Transportation Services Manager involved a high degree of responsibility, he being
in charge of preparing the budget for all of the vehicles of the Company nationwide. As Staff
Assistant of the Corporate Purchasing and Materials Control Manager, Del Villar contended
that he was not assigned any meaningful work at all.Third, while Del Villars transfer did not
result in the reduction of his salary, there was a diminution in his benefits. The Company
admits that asStaff Assistant of the Corporate Purchasing and Materials Control Manager, Del
Villar could no longer enjoy the use of a company car, gasolineallowance, and annual foreign
travel, which Del Villar previously enjoyed as Transportation Services Manager. Fourth, it was
not bad enough that Del Villar was demoted, but he was even placed by the Company under
the control and supervision of Pinedaas the latters Staff Assistant. To recall, Pineda was one of
the Company officials who Del Villar accused of defrauding the Company in his Reportdated
January 4, 1996.
It is not too difficult to imagine that the working relations between Del Villar, the accuser, and
Pineda, the accused, hadbeen strained and hostile. The situation would be more oppressive
for Del Villar because of his subordinate position vis--vis Pineda. Fifth, all the foregoing
caused Del Villar inconvenience and prejudice, so unbearable for him that he was constrained
to seek remedy from theNLRC. The Labor Arbiter was correct in his observation that had Del
Villar resigned immediately after his "transfer," he could be said to havebeen constructively
dismissed. There is constructive dismissal when there is a demotion in rank and/or diminution
in pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to the employee.Eventually, however, the Company actually terminated Del
Villars services effective May 31, 1998, as his position was no longer necessary or was
considered redundant due to the reorganization of the Business Logistic Directorate.
Redundancy is one of the authorized causes for thedismissal of an employee. It is governed
by Article 283 of the Labor Code, which reads:
ART. 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due tothe installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishmentor undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers andthe Department of Labor
and Employment at least one (1) month before the intended date thereof. In case of
termination due to the installationof labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1) monthpay or to
at least one (1) month pay for every year of service, whichever is higher.

In case of retrenchment to prevent losses and in cases of closures or cessation of operations

of establishment or undertaking not due to serious business losses or financial reverses, the
separation payshall be equivalent to one (1) month pay or to at least one-half (1/2) month
pay for every year of service, whichever is higher. A fraction of at leastsix (6) months shall be
considered one (1) whole year.
Redundancy, for purposes of the Labor Code, exists where the services of an employee are in
excess of what is reasonably demanded by theactual requirements of the enterprise.
Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or
positionsmay be the outcome of a number of factors, such as overhiring of workers,
decreased volume of business, or dropping of a particular productline or service activity
previously manufactured or undertaken by the enterprise.The determination that the
employee's services are no longer necessary or sustainable and, therefore, properly
terminable for being redundant isan exercise of business judgment of the employer. The
wisdom or soundness of this judgment is not subject to discretionary review of the Labor
Arbiter and the NLRC, provided there is no violation of law and no showing that it was
prompted by an arbitrary or malicious act.In other words, it is not enough for a company to
merely declare that it has become overmanned. It must produce adequate proof of
suchredundancy to justify the dismissal of the affected employees.Coca Cola presented no
other evidence , Neither did the Company present proof that it had complied with the
procedural requirement in Article283 of prior notice to the Department of Labor and
Employment (DOLE) of the termination of Del Villars employment due to redundancy
onemonth prior to May 31, 1998.
Del Villars poor employee performance is irrelevant as regards the issue on redundancy.
Redundancy arises because there is no more need for the employees position in relation to
the whole business organization, and not because the employee unsatisfactorily performed
the duties andresponsibilities required by his position.An employee who is illegally dismissed
is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement is not
viable, separation pay is awarded to the employee. In awarding separation pay to an illegally
dismissed employee, in lieu of reinstatement, the amount to beawarded shall be equivalent to
one month salary for every year of service. Under Republic Act No. 6715, employees who are
illegally dismissedare entitled to full backwages, inclusive of allowances and other benefits or
their monetary equivalent, computed from the time their actualcompensation was withheld
from them up to the time of their actual reinstatement but if reinstatement is no longer
possible, the backwages shallbe computed from the time of their illegal termination up to the
finality of the decision. We note that Del Villars reinstatement is no longer possiblebecause
the position he previously occupied no longer exists, per San Juans Affidavit dated October
15, 1998. Also, Del Villar had alreadyreceived his separation pay sometime in October 1998.

EMPLOYEES UNION OF BAYER PHILS., FFW and JUANITO S. FACUNDO

v.
BAYER PHILIPPINES, INC., ET AL. G.R. No. 162943 December 6, 2010 VILLARAMA,
JR., J.:
DOCTRINE:
An intra-union dispute refers to any conflict between and among union members, including
grievances arising from any violation of the rights and conditions of
membership, violation of or disagreement over any provision of the unions constitution
and by-laws, or disputes arising from chartering or disaffiliation of the union.
KEYWORDS:
INTER/INTRA-UNION DISPUTE, DEFINITION, JURISDICTION
FACTS:
Petitioner EUBP is the exclusive bargaining agent of all rank-and-file employees of Bayer
Philippines, and is an affiliate of the Federation of Free Workers. EUBP, headed by its president
Juanito S. Facundo, negotiated with Bayer for the signing of CBA. Pending the resolution of the
dispute, respondent Avelina Remigio and 27 other union members, without any authority from
their union leaders, accepted Bayers wage increase proposal. EUBPs grievance committee
questioned Remigios action and reprimanded Remigio and her allies. Eventually, the DOLE
Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA retroactive to
January 1, 1997 and to be made effective until December 31, 2001. Barely six months from
the signing of the new CBA, during a company-sponsored seminar, Remigio solicited
signatures from union members in support of a resolution containing the decision of the
signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed Employees Union
of Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws for the union, (4)
abolish all existing officer positions in the union and elect a new set of interim officers, and (5)
authorize REUBP to administer the CBA between EUBP and Bayer. The said resolution was
signed by 147 of the 257 local union members. A subsequent resolution was also issued
affirming the first resolution. A tug-of-war then ensued between the two rival groups, with
both seeking recognition from Bayer and demanding remittance of the union dues collected
from its rank-and-file members. Bayer responded by deciding not to deal with either of the
two groups, and by placing the union dues collected in a trust account until the conflict
between the two groups is resolved. EUBP filed a complaint for unfair labor practice (first ULP
complaint) against Bayer for non-remittance of union dues. While the first ULP case was still
pending and despite EUBPs repeated request for a grievance conference, Bayer decided to

turn over the collected union dues amounting to P254,857.15 to the Treasurer of REUBP.
Aggrieved by the said development, EUBP lodged a complaint against Remigios group before
the Industrial Relations Division of the DOLE praying for their expulsion from
EUBP for commission of acts that threaten the life of the union. Labor Arbiter Jovencio Ll.
Mayor, Jr. dismissed the first ULP complaint for lack of jurisdiction because
the root cause for Bayers failure to remit the collected union dues can be traced to the intraunion conflict betw een EUBP and Remigios group and that the charges imputed against
Bayer should have been submitted instead to voluntary arbitration. EUBP did not appeal the
said decision. Petitioners filed a second ULP complaint against respondents. Three days later,
petitioners amended the complaint charging the respondents with unfair labor practice
committed by organizing a company union, gross violation of the CBA and violation of their
duty to bargain. Petitioners complained that Bayer refused to remit the collected union dues
to EUBP despite several demands sent to the management. They also alleged that
notwithstanding the requests sent to Bayer for a renegotiation of the last two years of the
1997-2001 CBA between EUBP and Bayer, the latter opted to negotiate instead with Remigio
s group. On even date, REUBP and Bayer agreed to sign a new CBA. Later, petitioners filed a
second amended complaint to include in its complaint the issue of gross violation of the CBA
for violation of the contract bar rule following Bayers decision to negotiate and sign a new
CBA with Remigios group.
Meanwhile, the Regional Director of the Industrial Relations Division of DOLE issued a decision
dismissing the issue on expulsion filed by EUBP against Remigio and her allies. EUBP
seasonably appealed the said decision to the Bureau of Labor Relations (BLR) which reversed
the Regional Directors ruling and ordered the management of Bayer to respect the authority
of the duly-elected officers of EUBP in the administration of the prevailing CBA.
Unfortunately, the said BLR ruling came late since Bayer had already signed a new CBA with
REUBP. The said CBA was eventually ratified by majority of the bargaining unit.
Labor Arbiter Waldo Emerson R. Gan dismissed EUBPs second ULP com plaint for lack of
jurisdiction and observed that the case involves intra-union disputes and thus is bereft of any
jurisdiction pursuant to Article 226 of the LC. On June 28, 2000, the NLRC resolved to dismiss
petitioners motion for a restraining order and/or injunction stating that the subject matter
involved an intra-union dispute, over which the said Commission has no jurisdiction.
Aggrieved by the Labor Arbiters decision to dismiss the second ULP complaint, petitioners
appealed the said decision, but the NLRC denied the appeal. EUBPsmotion for reconsideration
was likewise denied.
ISSUE:
Did the LABOR ARBITER and THE NLRC correctly rule on the second ULP case that they are
bereft of jurisdiction for it is the BLR who should take cognizance of the case, it being an intraunion conflict?
RULING:

An intra-union dispute refers to any conflict between and among union members, including
grievances arising from any violation of the rights and conditions of membership, violation of
or disagreement over any provision of the unions constitution and by-laws, or disputes
arising from chartering or disaffiliation of the union. Sections 1 and 2, Rule XI 1 of
Department Order No. 40-03, Series of 2003 of the DOLE enumerate the following
circumstances as inter/intra-union disputes.

It is clear from the foregoing that the issues raised by petitioners do not fall under any of the
aforementioned circumstances constituting an intra-union dispute. More importantly, the
petitioners do not seek a determination of whether it is the Facundo group (EUBP) or the
Remigio group (REUBP) which is the true set of union officers. Instead, the issue raised
pertained only to the validity of the acts of management in light of the fact that it still has an
existing CBA with EUBP. Thus as to Bayer, Lonishen and Amistoso the question was whether
they were liable for unfair labor practice, which issue was within the jurisdiction of the NLRC.
The dismissal of the second ULP complaint was therefore erroneous. However, as to
respondents Remigio and Villareal, we find that petitioners complaint was validly dismissed.
Petitioners ULP complaint cannot prosper as against respondents Remigio and Villareal
because the issue, as against them, essentially involves an intra-union dispute based on
Section 1 (n) of DOLE Department Order No. 40-03. To rule on the validity or illegality of their
acts, the Labor Arbiter and the NLRC will necessarily touch on the issues respecting the
propriety of their disaffiliation and the legality of the establishment of REUBP issues that are
outside the scope of their jurisdiction. Accordingly, the dismissal of the complaint was validly
made, but only with respect to these two respondents.

Pacquing et. al.

v.
Coca-Cola Phils.
[G.R. No. 157966. Jan. 31, 2008]
Facts:
Petitioners were sales route helpers or cargadores-pahinantes of Coca-Cola. Petitioners sued
for illegal dismissal and ULP. They claim that they are regular employees. Coca-Cola claimed
that petitioners were temporary workers who were engaged for a five-month period to act as
substitutes for an absent regular employee.
Issue:
Whether petitioners are regular employees Applying the principle stare
Held:

decisis et non quieta movere (follow past precedents and do not disturb what has been
settled), SC applied the ruling in Magsalin v. National Organization of Working Men to this
case. The basic law on the case is Article 280 (LCP). In determining whether an employment
should be considered regular or non-regular, the applicable test is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or
trade of the employer. The standard, supplied by the law itself, is whether the work
undertaken is necessary or desirable in the usual business or trade of the employer, a fact
that can be assessed by looking into the nature of the services rendered and its relation to
the general scheme under which the business or trade is pursued in the usual course. It is
distinguished from a specific undertaking that is divorced from the normal activities required
in carrying on the particular business or trade. But, although the work to be performed is only
for a specific project or seasonal, where a person thus engaged has been performing the job
for at least one year, even if the performance is not continuous or is merely intermittent, the
law deems the repeated and continuing need for its performance as being sufficient to
indicate the necessity or desirability of that activity to the business or trade of the employer.
The employment of such person is also then deemed to be regular with respect to such
activity and while such activity exists. The argument of petitioner that its usual business or
trade is softdrink manufacturing and that the work assigned to respondent workers as sales
route helpers so involves merely post production activities, one which is not indispensable
in the manufacture of its products, scarcely can be persuasive. If, as so argued by petitioner
company, only those whose work are directly involved in the production of softdrinks may be
held performing functions necessary and desirable in its usual business or trade, there would
have then been no need for it to even maintain regular truck sales route helpers. The nature
of the work performed must be viewed from a perspective of the business or trade in its
entirety and not on a confined scope. The repeated rehiring of respondent workers and the
continuing need for their services clearly attest to the necessity or desirability of their
services in the regular conduct of the business or trade of petitioner company. Being regular
employees of respondent, petitioners are entitled to security of tenure, as provided in Article
279 of the Labor Code, and may only be terminated from employment due to just or
authorized causes. Because respondent failed to show such cause, the petitioners are
deemed illegally dismissed and therefore entitled to back wages and reinstatement without
loss of seniority rights and other privileges.

M+W ZANDER
V.
ENRIQUEZ
G.R. No. 169173
5 June 2009
Facts:
Enriquez was hired on probationary basis as the Administration Manager and
Executive Assistant to the General Manager (AM and EAGM) of M+W Zander
Philippines, Inc. (M+W Zander), a multi-national corp. engaged in construction and
facilities management. She was later confirmed as a permanent employee.
As AM, her responsibilities include taking charge of the management of
administrative personnel assigned to the head office, as well as the security of the
company staff and premises and the implementation of company rules.
As EAGM, she was in charge of scheduling, monitoring and tracking all the General
Managers appointments and personal finances and serving as the liaison among
the General Manager, the Division Heads, the Administrative Staff and external
contacts.
In 2002, M+W Zander relieved its current GM, appointed Mr. Wiltschek as the
replacement. A Letter of Appeal was signed by 29 employees of M+W Zander,
opposing the appointment of Wiltschek for his abusive behavior. A day after the
Letter of Appeal was released, a number of employees did not report to work.
M+W Zander alleged that after the announcement of Wiltschek as the new GM,
Enriquez actively solicited signatures for the letter opposing the appointment of
Wiltschek. It claimed that Enriquez used her influence and moral ascendancy to
coerce several employees into signing the letter of appeal. Tecson stated that he
received a call from Enriquez in his mobile phone telling him not to report to work
since other employees will not report to work and that he should just file for a sick
leave since they were doing the same. Tecson said he was already on his way to the
office and refused to follow Enriquez.
M+W Zander sent a Notice to Enriquez, requiring her to explain within 48 hours why
no disciplinary action should be taken against her for willful breach of trust and
using her authority and/or influence as AM of M+W Zander over her subordinates to
stage a no work day on February 1, 2002. It was indicated that willful breach of
trust has a corresponding penalty of dismissal. Meanwhile, she was placed under
preventive suspension for 15 working days.

Enriquez denied that she used her authority and/or influence as AM and EAGM to
compel her co-employees to stage the illegal work stoppage. She also denied that
she performed any act to disrupt the vital operations of the company. She said that
when she arrived at work on February 2, 2002, she was given a notice of suspension
for 15 days and was instructed to leave the premises without being given an
explanation. Her personal belongings were inspected and she was escorted out of
the premises like a criminal. She also said that her colleagues were given an order
that if she is seen in the premises of the company, the administration should be
informed immediately and that in no case should respondent be allowed to enter
the premises of the company except if she is with an authorized escort of the
petitioner company.
An administrative hearing was conducted where Sales Engineer Rivera admitted
before the investigating panel that he was the one who instigated the no work day
on February 1, 2002, but he was not charged by Zander.
Out of the eight subordinates who gave their statements during the administrative
investigation, it was only Stanley Mosende who stated that he was influenced by
Enriquez not to report for work.
On March 1, 2002, a Notice of Termination was received by Enriqeuz informing her
that her services as AM and EAGM of M+W Zander are terminated effective the
same day. She was found liable for willful breach of trust and confidence in using
her authority and/or influence as Administrative Manager of M+W Zander
Philippines over her subordinate to stage a no work day last February 1, 2002.
Enriquez filed a Complaint for illegal dismissal. She alleged that M+W Zander based
her termination on mere speculation since there were a number of employees who
reported to work despite signing the letter of appeal, and the company still
continued its operations that day.
LA: Enriquez was illegally dismissed. Reinstatement without loss of seniority rights
and privileges was ordered. Moral and Exemplary damages and attys fees were
also awarded.
NLRC reversed the decision of the LA.
CA reversed NLRCs decision and upheld that of the LA.
ISSUES:
1. Whether or Not there was illegal dismissal
2. Whether or Not moral and exemplary damages and attys fees should be awarded
3. Whether or Not Wiltschek should be personally liable together with M+W Zander
RULING:
1. Yes. Certain guidelines must be observed for the employer to terminate an
employee for loss of trust and confidence.

The 1st requisite for dismissal on the ground of loss of trust and confidence is that
the employee concerned must be one holding a position of trust and confidence.
There are two classes of positions of trust: managerial employees and fiduciary
rank-and-file employees.
Managerial employees are defined as those vested with the powers or prerogatives
to lay down management policies and to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees or effectively recommend such
managerial actions.
The fiduciary rank-and-file employees consist of cashiers, auditors, property
custodians, etc., or those who, in the normal exercise of their functions, regularly
handle significant amounts of money or property. They are routinely charged with
the care and custody of the employers money or property, and are thus classified
as occupying positions of trust and confidence.
In this case, Enriquez was employed as the AM and EAGM. The position of an AM
may be properly considered as a managerial position, being a head of
administrative assistants of other divisions, and because of the performance of work
directly related to management policies and company rules.
The 2nd requisite of terminating an employee for loss of trust and confidence is that
there must be an act that would justify the loss of trust and confidence. To be a valid
cause for dismissal, the loss of confidence must be based on a willful breach of trust
and founded on clearly established facts.
In this case, it was not established that respondent used her authority to influence
her subordinates to stage a no work day; and assuming that she performed this
act as alleged by petitioners, it does not satisfy the jurisprudential requirements for
valid termination due to loss of trust and confidence.
Loss of trust and confidence stems from a breach of trust founded on a dishonest,
deceitful or fraudulent act. She did not commit any act which was dishonest or
deceitful. She did not use her authority as the AM to misappropriate company
property nor did she abuse the trust reposed in her by petitioners with respect to
her responsibility to implement company rules. The most that can be attributed to
respondent is that she influenced a single subordinate, without exerting any force or
making any threats, not to report to work. This does not constitute dishonest or
deceitful conduct which would justify the conclusion of loss of trust and confidence.
The act of influencing a single subordinate (Mosende) not to report to work is
insufficient to merit the harsh and grave penalty of dismissal.
While 29 other employees signed the Letter of Appeal, and several employees
joined the alleged work stoppage, it was only respondent who was singled out and
dismissed. Her termination cannot be based on mere speculation and base her
dismissal on unclear and nebulous reasons, especially where a less punitive penalty
would suffice. The penalty must be commensurate with the act, conduct or omission
imputed to the employee.

2. There is sufficient basis to award moral damages and attys fees because the
manner in which Enriquez was treated upon the companys suspicion of her
involvement in drafting and in circulating the letter of appeal and the alleged
staging of the no work day is contrary to good morals because it caused
unnecessary humiliation to respondent.
3. Wiltschek is not liable. It has not been proven that Wiltschek was impleaded in his
capacity as General Manager of petitioner corporation and there appears to be no
evidence on record that he acted maliciously or in bad faith in terminating the
services of respondent. His act, therefore, was within the scope of his authority and
was a corporate act for which he should not be held personally liable for.

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner

v.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), DIONISIO BANLASAN,
ALFREDO T. TAFALLA, TELESFORO D. RUBIA, ROGELIO A. ALVAREZ,
DOMINADOR A. ESCOBAL, and ROSAURO PANIS, Respondent
FACTS:
Private respondents were security guards hired by DNL Security, and they were
assigned to Petitioners Tacloban office. In July 1989, GSIS voluntarily increased their
salaries from 1400 to 3000 php. In February 1993, DNL Security informed
respondents that its service contract with petitioner was terminated. This
notwithstanding, DNL Security instructed respondents to continue reporting for work
to petitioner. Respondents worked as instructed until April 20, 1993, but without
receiving their wages; after which, they were terminated from employment.

Respondents filed before the NLRC a complaint against GSIS and DNL Security for
illegal dismissal, which they won. The LA found that respondents were not illegally
terminated from employment because the employment of security guards is
dependent on the service contract between the security agency and its client.
However, considering that respondents had been out of work for a long period, and
consonant with the principle of social justice, the LA awarded respondents with
separation pay equivalent to one (1) month salary for every year of service, to be
paid by DNL Security. DNL Security filed a motion for reconsideration, while
petitioner appealed to the NLRC.
The NLRC treated DNL Securitys motion for reconsideration as an appeal, but
dismissed the same, as it was not legally perfected. It likewise dismissed petitioners
appeal, having been filed beyond the reglementary period. The CA likewise affirmed
the decision of the NLRC upon petition for certiorari, and GSIS institutes the instant
action.
ISSUES:
1. Whether GSIS appeal was seasonably filed before the NLRC.
2. Whether GSIS is liable as an indirect employer
HELD:
Petition is partly granted
REMEDIAL LAW: Reglamentary period of appeals
Under Section 3, Rule 13 of the Rules of Court, where the filing of pleadings,
appearances, motions, notices, orders, judgments, and all other papers with the
court/tribunal is made by registered mail, the date of mailing, as shown by the post
office stamp on the envelope or the registry receipt, shall be considered as the date
of filing. In any case, even if the appeal was filed one day late, the same should
have been entertained by the NLRC. However, in exceptional cases, a belated
appeal may be given due course if greater injustice will be visited upon the party
should the appeal be denied. The Court has allowed this extraordinary measure
even at the expense of sacrificing order and efficiency if only to serve the greater
principles of substantial justice and equity.
LABOR LAW: Indirect employment
The fact that there is no actual and direct employer-employee relationship between
petitioner and respondents does not absolve the former from liability for the latters
monetary claims. When petitioner contracted DNL Security's services, petitioner
became an indirect employer of respondents, pursuant to Article 107 of the Labor
Code which states: The provisions of the immediately preceding Article shall
likewise apply to any person, partnership, association or corporation which, not

being an employer, contracts with an independent contractor for the performance of

any work, task, job or project.
Petitioners liability covers the payment of respondents salary differential and
13thmonth pay during the time they worked for petitioner. In addition, petitioner is
solidarily liable with DNL Security for respondents unpaid wagesfrom February 1993
until April 20, 1993. While it is true that respondents continued working for
petitioner after the expiration of their contract, based on the instruction of DNL
Security, petitioner did not object to such assignment and allowed respondents to
render service. Thus, petitioner impliedly approved the extension of respondents
services.Accordingly, petitioner is bound by the provisions of the Labor Code on
indirect employment.
However, GSIS is exempt from paying separation pay because it is punitive in
character, and an indirect employer cannot be held liable for this unless it conspired
with the dismissal.
Petition partly granted. GSIS is solidarily liable with DNL Security.

UNITED FIELD SEA WATCHMAN AND CHECKERS AGENCY, JAIME AMAMIO,

GLENN GUIRAL, AND PHILIPPINE PORTS AUTHORITY, PETITIONERS,
V.

WILLIE REQUILLO, NORBEM DAHANG, JR., ROMEO BUHANGIN, ANTONIO

RUAZA, ELSIE TABLA, AND CONSTANTINO DANUCO, RESPONDENTS .

FACTS

Respondents were security guards of the United Field Sea Watchman and Checkers
Agency (UFSWCA) assigned to the Port of Surigao City operated by the Philippine
Ports Authority (PPA). UFSWCA is a single proprietorship owned by Jaime Amamio.
Its operations in Surigao City are managed by Glenn Guiral.
In the course of their employment, respondents applied for loans with the SSS Office
at Surigao City. To their dismay, they found that UFSWCA has not been remitting to
the SSS their contributions being deducted regularly from their salaries. Upon
advice of the SSS, they filed with the DOLE in Surigao del Norte complaints against
UFSWCA.
On June 30, 1997, UFSWCA issued Agency Order No. 167-97 reassigning
respondents to various PPA offices in Iligan City, Ozamiz City, Cagayan, Nasipit, and
Iloilo. Respondents refused to heed the agency order as they were residing in
Surigao City with their families and they considered the order a form of retaliation
on the part of UFSWCA. Instead, they continued reporting for work at the PPA office
in Surigao City. Hence, UFSWCA refused to pay their salaries for the month of June
1997 as they were considered absent without leave.
Consequently, respondents filed with the Labor Arbitration Branch in Butuan City a
complaint for illegal dismissal, unfair labor practice and nonpayment of wages,
backwages, differential pay, and rest day premium pay against petitioners.
Labor Arbiter Rogelio Legaspi found repondents dismissal illegal and ordered
UFSWCA and/or Jaime Amamio and PPA, Surgao City to jointly and severally pay
respondents salary differentials, 13th month pay, service incentive leave pay,
unpaid salaries, premium pay for holidays and rest days, backwages as well as
damages for illegal dismissal and unfair labor practice.
On appeal by petitioners, NLRC deleted the awards for backawages, damages, and
attorneys fees as well as the awards granted to Constancio Danuco.
On petition for certiorari by respondents, the CA set aside the Resolution of the
NLRC holding that it committed grave abuse of discretion amounting to lack or
excess of jurisdiction when it gave due course to petitioners appeal which was filed
beyond the reglementary period. The CAs decision was premised on the finding of
patent irregularity in the registry return slips addressed to private respondent Jaime
Amamio and his counsel Atty. Estanislao Ebarle which are not the original return

slips of the Decision of the Labor Arbiter. The non-submission of the original return
slips is an indication that if the originals were submitted they would reveal that
private respondent Jaime Amamio and Atty. Estanislao Ebarle received the Decision
of the Labor Arbiter on a much earlier date.
Hence, the instant petition.
ISSUE
Whether or not the Court of Appeals erred in holding that petitioners appeal to the
NLRC was filed beyond the reglementary period.
HELD
Petition is denied. The decision and resolution of the CA are affirmed.
Rule 131, Section 3 (e) of the Revised Rules of Evidence provides that evidence
willfully suppressed would be adverse if produced. There being no contradictory
evidence to debunk such supposition, the presumption stands.
Article 223 of the Labor Code provides in part:
ART. 223. Appeals. Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders, x x x.
The appeal not having been filed within the ten (10) day period to appeal, the
appeal filed by private respondents before the NLRC should not have been given
due course. The failure of private respondents to perfect the appeal in accordance
with the prescribed procedure renders the same ineffective to stop the running of
the ten (10) day reglementary period to appeal
The right to appeal is not part of due process but a mere statutory privilege that has
to be exercised only in the manner and in accordance with the provisions of law.
Since the perfection of an appeal within the statutory reglementary period is not
only mandatory but also jurisdictional, petitioners failure to perfect their appeal to
the NLRC seasonably rendered the Labor Arbiters Decision final and executory.
Accordingly, the NLRC has no jurisdiction to give due course to petitioners appeal,
much less render a Resolution modifying the Labor Arbiters Decision. Indeed, such
Resolution is a patent nullity for want of jurisdiction.

WOODRIDGE
Petitioner,

SCHOOL

(now

known

as

WOODRIDGE

COLLEGE,

INC.),

v.
JOANNE C. PE BENITO and RANDY T. BALAGUER, Respondents.
Facts:
Woodridge School hired Joanne C. Pe Benito and Randy T. Balaguer as probationary
high school teachers. Their contracts of employment covered a three (3) year
probationary period. Respondents, together with twenty other teachers, presented
petitioner with a Manifesto Establishing Relevant Issues Concerning the School.
Petitioner sent two separate Memoranda to respondents placing them under
preventive suspension for a period of thirty days for maligning the school. Petitioner
issued respondents their Notice of Termination, informing respondents that they did
not qualify as regular employees for their failure to meet the performance standards
made known to them at the start of their probationary period. Respondents filed a
complaint for illegal dismissal.
Issue:
Whether respondents are regular employees.
Held:
Respondents were not regular or permanent employees; they had not yet
completed three (3) years of satisfactory service as academic personnel that would
have entitled them to tenure as permanent employees in accordance with the
Manual of Regulations for Private Schools. A probationary employee is one who, for
a given period of time, is being observed and evaluated to determine whether or
not he is qualified for permanent employment. A probationary appointment affords
the employer an opportunity to observe the skill, competence and attitude of a
probationer. The word "probationary," as used to describe the period of
employment, implies the purpose of the term or period. While the employer
observes the fitness, propriety and efficiency of a probationer to ascertain whether
he is qualified for permanent employment, the probationer at the same time seeks
to prove to the employer that he has the qualifications to meet the reasonable
standards for permanent employment. Petitioner failed to substantiate their claim
by documentary evidence. Considering that respondents were on probation for
three years, and they were subjected to yearly evaluation by the students and by

the school administrators (principal and vice-principal), it is safe to assume that the
results thereof were definitely documented. As such, petitioner should have
presented the evaluation reports and other related documents to support its claim,
instead of relying solely on the affidavits of their witnesses. The unavoidable
inference, therefore, remains that the respondents dismissal is invalid.

SAN MIGUEL CORPORATION, Petitioner

V.
CAROLINE C. DEL ROSARIO, Respondent.
G.R. Nos. 168194 & 168603 December 13, 2005

Facts:
On April 17, 2000, respondent was employed by petitioner as key account specialist.
Petitioner informed respondent that her probationary employment will be severed at
the close of the business hours of March 12, 2001. After respondent was refused
entry to petitioners premises.
Respondent filed a complaint against petitioner for illegal dismissal and
underpayment/non-payment of monetary benefits. Respondent alleged that
petitioner feigned an excess in manpower because after her dismissal, it hired new
recruits and re-employed two of her batch mates.
On the other hand, petitioner claimed that respondent was a probationary employee
whose services were terminated as a result of the excess manpower that could no
longer be accommodated by the company. Respondent was allegedly employed as a
temporary reliever of Patrick Senen, an account specialist, who met an accident.
Anticipating an increase in sales volume, petitioner hired respondent as an account
specialist on a probationary status and was assigned at petitioners Greater Manila
Area-Key Accounts Group (GMA-KAG) Beer Sales Group. However, petitioners
expected business growth did not materialize, hence, it reorganized the GMA-KAG,
and created the Centralized Key Accounts Group. This restructuring led to an initial

excess of 49 regular employees, who were redeployed to other positions, including

the one occupied by respondent.
Decisions:
LA: declared respondent a regular employee because her employment
exceeded six months and holding that she was illegally dismissed, as there was no
authorized cause to terminate her employment. It further ruled that petitioners
failure to rebut respondents claim that it hired additional employees after she was
dismissed belie the companys alleged redundancy. It rendered the dismissal of
complainant as illegal and ordering her reinstatement with full backwages;
Holiday Pay, Service Incentive Leave, 13th Month Pay, moral and
exemplary damages.
On appeal by petitioner to the NLRC
NLRC: modified the decision of LA holding that respondent is a regular employee
whose termination from employment was valid but ineffectual for petitioners failure
to comply with the 30-day notice to the employee and the DOLE. Thus, respondent
SMC is hereby ordered to pay complainant separation pay equivalent to her
one-month pay per year of service reckoned from her first day of employment
and award for full backwages shall be accordingly adjusted to cover the period from
the time she was ineffectually dismissed up to the date of this Resolution.
Complainants award for unpaid service incentive leave and 13th month pay shall
be reduced respectively. Complainants award for holiday pay and moral and
exemplary damages is (sic) deleted.
NLRC denied the motions for reconsideration filed by both parties. Thereafter,
petitioner and respondent filed separate petitions with the Court of Appeals
CA: In CA-G.R. SP No. 84081 - granted the respondents petition and reinstated
with modification the Labor Arbiters decision finding her to be an illegally dismissed
regular employee, but deleted the award for holiday pay for lack of basis. The CA
noted that petitioner gave no satisfactory explanation for the hiring of employees
after respondents termination and the absence of company criteria in determining
who among the employees will be dismissed, the dismissal is illegal and ordering
her reinstatement with full backwages, moral and exemplary damages.
In CA-G.R. SP No. 83725 (San Miguel Corp) the instant petition is dismissed.
Hence, petitioner instituted these two separate petitions for review praying that the
questioned decisions and resolutions of the Court of Appeals in CA-G.R. SP No.
84081 and CA-G.R. SP No. 83725 be set aside and that respondents complaint be
dismissed.
Issues:

1. whether or not respondent is a regular employee of petitioner;

2. whether or not respondent was illegally dismissed;
3. if so, whether or not respondent is entitled to any monetary benefit.
Ruling:
1. In termination cases, like the present controversy, the burden of proving the
circumstances that would justify the employees dismissal rests with the employer.
The best proof that petitioner should have presented to prove the probationary
status of respondent is her employment contract. None, having been presented, the
continuous employment of respondent as an account specialist for almost 11
months, means that she was a regular employee and not a temporary reliever or a
probationary employee. The 2 Payroll Authorities offered by petitioner showing that
respondent was hired as a replacement, and later, as a probationary employee do
not constitute substantial evidence. As correctly found by the NLRC, none of these
documents bear the conformity of respondent, and are therefore, self-serving.
And while it is true that by way of exception, the period of probationary employment
may exceed six months when the parties so agree, such as when the same is
established by company policy, or when it is required by the nature of the work,
none of these exceptional circumstance were proven in the present case. Hence,
respondent whose employment exceeded six months is undoubtedly a regular
employee of petitioner.
2. Redundancy, for purposes of the Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirements
of the enterprise. Succinctly put, a position is redundant where it is superfluous, and
superfluity of a position or positions may be the outcome of a number of factors,
such as overhiring of workers, decreased volume of business, or dropping of a
particular product line or service activity previously manufactured or undertaken by
the enterprise. In the case at bar, petitioner presented an affidavit of its Sales
Manager and a memorandum of the company both to the effect that there is a need
to redeploy its regular employees and terminate the employment of temporary
employees, in view of an excess in manpower. These documents, however, do not
satisfy the requirement of substantial evidence that a reasonable mind might accept
as adequate to support a conclusion.
In balancing the interest between labor and capital, the prudent recourse in
termination cases is to safeguard the prized security of tenure of employees and to
require employers to present the best evidence obtainable, especially so because in
most cases, the documents or proof needed to resolve the validity of the
termination, are in the possession of employers. A contrary ruling would encourage
employers to prevent the regularization of an employee by simply invoking a
feigned or unsubstantiated redundancy program.

Granting that petitioner was able to substantiate the validity of its reorganization or
restructuring, it nevertheless, failed to effect a fair and reasonable criterion in
dismissing respondent. The criteria in implementing a redundancy are: (a) less
preferred status, e.g. temporary employee; (b) efficiency; and (c) seniority.
In dismissing respondent, petitioner averred that in choosing the employee to be
retained and to be placed in the limited available positions, it had to give priority to
the regular employees, over petitioner who is only a probationary employee. What
further militated against the alleged redundancy advanced by petitioner is their
failure to refute respondents assertion that after her dismissal, it hired new recruits
and re-employed two of her batch mates. Other than the lame excuse that it is
respondent who has the burden of proving the same, it presented no proof to fortify
its denial.
3. ARTICLE 279. Security of tenure. In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to
his full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement.
Considering that respondent was illegally dismissed, she is entitled not
only to reinstatement but also to payment of full backwages, computed
from the time her compensation was actually withheld from her on March
13, 2001, up to her actual reinstatement. As a regular employee of
petitioner from the date of her employment on April 17, 2000, she is
likewise entitled to other benefits, i.e., service incentive leave pay and
13th month pay computed from such date also up to her actual
reinstatement.
Respondent is not, however, entitled to holiday pay because the records
reveal that she is a monthly paid regular employee. Under Section 2, Rule IV,
Book III of the Omnibus Rules Implementing the Labor Code, employees who are
uniformly paid by the month, irrespective of the number of working days therein,
shall be presumed to be paid for all the days in the month whether worked or not.
Hence, the Court of Appeals correctly deleted said award.

AMADEO FISHING CORPORATION

v.
NIERRA

FACTS:
Petitioner Amadeo Fishing Corporation is a domestic corporation engaged principally
in deep sea fishing in the high seas. Private respondents Romeo Nierra, Raul Naces
and Alberto Ojayas were reserved crew members of the petitioners fishing boat,
theF/B Eduardo08 which was conducting fishing operations in Indonesia.
The issuance of the gate pass for all fish taken out of the company premises, as
allowances, purchases or donations, is made atthe weighing shed near the wharf,
about 500 meters away from the main gate. Only fish brokers weighed the fish.
Security guardsare also posted within the vicinity to look after the fish, and the
movements of the buyers and labourers.
On March 9, 1998, the private respondents were about to exit the company
premises at the main gate. The guard on duty wouldnot let them pass; the private
respondents had fish in their possession about seven kilos of Skipjack Tuna and
Yellow Fin which required a gate pass.
The private respondents insisted that a gate pass was no longer necessary,
as they personally caught the fish. The guard confiscated the fish and stored it
in the company canteen.
General Manager of the fishing corporation remarked that their actuations
constituted theft and ordered the personnel departmentto institute criminal charges
against the private respondents, and, if the circumstances warranted, terminate
their employment for gross
insubordination,
disrespect
and
arrogance
towards their employer and immediate superior. Thereafter, the private
respondents were terminated.
The petitioners filed criminal charges of qualified theft against the private
respondents. However, the trial court dismissed thecriminal case in an Order11
dated September 23, 1998 due to insufficiency of evidence.
On August 18, 1998, the private respondents filed a Complaint for Illegal Dismissal
against Amadeo Fishing Corporation.
On June 30, 1999, the Labor Arbiter dismissed the complaint for illegal dismissal for
lack of merit. the Labor Arbiter held that theCity Prosecutors finding of a prima
facie case for qualified theft and the recommendation of the filing of an Information
before acourt of competent jurisdiction constituted "substantial evidence that
warranted a finding of the existence of a just cause for thetermination of the
complainants on the ground of loss of trust and confidence.
On appeal, the NLRC affirmed with modification the Labor Arbiters ruling. However,
the NLRC also ruled that the petitioners failed to comply with the procedural
requirements of dismissal, namely, notice
and hearing. The NLRC further
concluded that anyexcuse, defense, or justification by the private respondents

would not matter, as their dismissal from employment was already aforegone
conclusion.
The private respondents elevated the case before the CA. The CA agreed with the
NLRC, holding that in dismissing the privaterespondents employment, the
petitioners failed to observe the two-notice rule.
The petitioners filed a motion for reconsideration of the said ruling, which the
appellate court denied, hence, this petition.
ISSUE:
Whether the private respondents were illegally dismissed from employment.
HELD:
In general, management has the prerogative to discipline its employees and to
impose appropriate penalties on erring workerspursuant to company rules and
regulations. In this case, there is no dispute that the private respondents were
aware of thecompany policy requiring a gate pass for all fish that would be taken
out of the premises. If, indeed, it were true that respondent Nierra previously had a
gate pass, which he claimed was destroyed, he could have just as easily gotten a
new one.
As borne out by the records, respondent Naces had already twice been
reprimanded: once for taking 15 kilos of fish without permission and selling the
same to an outsider; and again for being under the influence of liquor and leaving
the vessel withoutproper permission from the supervisor. Considering these
previous infractions and the fact that one of the private respondentswas on liquor,
petitioner Odango had the right to be concerned about the actuations
of the private respondents. Loss ofconfidence can be a ground for dismissing
an employee when there is basis for the same or when the employer has reasonable
ground to believe, if not entertain, the moral conviction that the employee is
responsible for the misconduct and that the nature ofhis participation therein
renders him unworthy of the trust and confidence demanded by his position.
Article 282 of the Labor Code of the Philippines provides that an employer may
terminate an employee based on fraud or willful breach of the trust reposed in
him by his employer or duly-authorized representative. This is premised
on
the
fact that
an employee concerned holds a position of trust and
confidence. This situation holds where an employee or official of thecompany is
entrusted with responsibility involving delicate matters, such as the
custody, handling or care of theemployers property. In the case of company
personnel occupying such positions of responsibility, the Court has repeatedly
heldthat loss of trust and confidence justifies termination. Indeed, an
employees acquittal in a criminal case does not automatically preclude a

determination that he has been guilty of acts inimical to the employers interest
resulting in loss of trust and confidence.
While the private respondents were dismissed for cause, the CA correctly held that
the petitioners failed to observe thetwo-notice rule under Article 277(b) of the Labor
Code in dismissing them from employment.Thus, the petitioners claim that the
private respondents were properly notified of their termination is unavailing. The
employerscompliance with the second requirement (the notice of termination) does
not cure the initial defect of the absence of the properwritten charge required by
law.