G.R. No. 149440.

January 28, 2003]HACIENDA FATIMA and/or PATRICIO VILLEGAS,

ALFONSO VILLEGAS and CRISTINESEGURA, petitioners, vs. NATIONAL FEDERATION
OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE, respondents.
FACTS In the course of a labor dispute between the petitioner and respondent union, the
unionmembers were not given work for more than one month. In protest, complainants staged
astrike which was however settled upon the signing of a Memorandum of Agreement.
Aconciliation meeting was conducted wherein Luisa Rombo, Ramona Rombo, Bobong
Abrega,and Boboy Silva were not considered by the company as employees, and thus may not
bemembers of the union. It was also agreed that a number of other employees will be
reinstated.When respondents again reneged on its commitment, complainants filed the present
complaint.It is alleged by the petitioners that the above employees are mere seasonal
employees.
ISSUE Whether or not the seasonal employees have become regular employees.
HELD The SC held that for respondents to be excluded from those classified as regular
employees, it is not enough that they perform work or services that are seasonal in nature. They
must havealso been employed only for the duration of one season. The evidence proves the
existence of the first, but not of the second, condition. The fact that respondents -- with the
exception of Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva -- repeatedly
worked assugarcane workers for petitioners for several years is not denied by the latter.
Evidently,petitioners employed respondents for more than one season. Therefore, the general
rule of regular employment is applicable.The primary standard of determining regular
employment is the reasonable connection betweenthe particular activity performed by the
employee in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual tradeor business of the employer. The
connection can be determined by considering the nature of the work performed and its relation
to the scheme of the particular business or trade in itsentirety. Also if the employee has been
performing the job for at least a year, even if theperformance is not continuous and merely
intermittent, the law deems repeated and continuingneed for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect tosuch activity and while such activity
exists.Petition is denied.

NORKIS TRADING CO., INC., ATTY. NORBERTO QUISUMBING, JR., RACQUEL

LICSI,EMMANUEL S. TAMAYO and NICHOL JUDE THADDEUS JURIDICO, petitioners,
vs.NATIONAL LABOR RELATIONS COMMISSION and MA. ARLENE C. GNILO, respondents
FACTS Private respondent started working for petitioner Norkis Trading Co., Inc. and was
initiallyassigned in the Calamba, Laguna branch. She was later appointed as Acting
AdministrativeFinance Officer with assignment at Naga City Branch, a position she held until
she achievedregular employment status. On December 1, 1993, she was appointed as
BranchBookkeeper/Cashier of Naga City Branch (Rank Category 4B). On January 24, 2001,
she waspromoted as Acting Senior Branch Control Officer for Bicol Region. During this time,
Privaterespondent was instructed by her immediate superior to confirm transactions pertaining
tocollections and deposits of BCO Marivic Faura at Polangui. However, provate respondent
wasinformed by the company there was information received that that private respondent
allegedlydisregarded the detailed instructions of her superior and failed to perform her duties as
a SeniorBranch Control Officer. She was thus directed to explain in writing what actually
transpiredduring her assignment at Polangui. She complied by submitting her written. An
investigation bythe companys Internal Audit Group ensued and private respondent was
formally charged with Negligence Resulting to Material Loss. She was instructed to make
herself available byreporting to the Inquiry Assistance Panel (IAP) in the companys head office
in Mandaluyong. After the hearing of the IAP was concluded, private respondent made a written
Request for Re-assignment addressed to Ms. De Jesus to be assigned as Cashier of the
Naga Branch which isvacant and considering that she is a resident of Naga City and a mother.
The company did not accede to her requests and she continued reporting at the main office
performing whateverwork assigned to her, such as monitoring of collections at Cubao Branch for
which shesubmitted an accomplishment report to Deputy Controller Emmanuel S. Tamayo.
For the period March 18 to April 1, 2003, the company withheld the Transportation and Travel
Allowance (TNT) being received by private respondent amounting to P7,555.00,
whichprompted her to formally protest her questionable assignment at the Home Office (HO)
inMandaluyong City which she insisted is against her appointment as Senior BCO for Bicol
Regionand Samar. In a letter, addressed to Deputy Controller Emmanuel S. Tamayo,
privaterespondent berated management for wanting to ease her out of the company due to a
laborcase (constructive dismissal) filed by her husband, who also worked at Norkis for more
thanthirteen (13) years, and such withdrawal of her travel allowances is calculated to
causesuffering on her part. She expressed that the situation has become unbearable for her so
that she is constrained to report back to Naga City, there being no written order issued
bymanagement for her to stay in the main office.Upon returning to Naga City, however, private
respondent learned from a co-employee that Deputy Controller Tamayo through a telephone call
gave instruction to deny her entry to thebranch premises and access to company records. She
caused this incident to be entered at thelocal police blotter. She later received a faxed
Speedletter from Deputy Managing DirectorNichol Jude Thaddeus C. Juridico and Deputy
Controller Emmanuel S. Tamayo directing her toreport back to the main office reminding her that
her new assignment required her to report tothe main office pending issuance of a permanent
assignment, and that she was instructed tomonitor the BCO of Porta Coeli Finance Corporation
(PCFC) branches and to assist the BCO Accounting Manager Belen Yaun in the meantime. She
was ordered to explain in writing withinforty-eight (48) hours why no disciplinary action should
be taken against her for abandonment of work, which under existing company policy, carries the
penalty of dismissal. She was alsodirected to refund the total amount of P123,685.00 of travel
and transportation allowancereceived by her during the period June 1, 2002 and March 17,
2003 because she is not entitledthereto while assigned at the main office.

In her faxed reply, private respondent explained that she reported at the main office startingJune
10, 2002 upon assurance given by her former superior, Ms. Aurea De Jesus, that she shallbe
receiving her regular TNT package as Senior BCO-Bicol Region and Samar since her stay
inthe main office would be just temporary as they will just iron out the problem in
PolanguiBranch. There was hesitation on her part since being a permanent resident of Naga
City andmother of three (3) children, she will be dislocated and separated from her family. She
insistedthat it was never clarified to her that her area of assignment is being changed and also
deniedthat Deputy Controller Tamayo specifically instructed her to monitor the BCOs of Porta
CoeliFinance Corporation (PCFC) or assist Ms. Belen Yaun, pointing out that if she ever
assisted Ms. Yaun it was her initiative to get herself busy and if ever she had a record of travel
to a PCFCbranch, it was done out of an emergency or her superior was just forced to. She
asserted that her assignment at the HO is a demotion intended to make her feel that her
continued presencein the company is no longer necessary because neither Mr. Tamayo nor Ms.
Yaun have beentalking to her. Were it not for her monthly TNT, she could not have stayed at
the HO becauseher take-home pay amounted to only a little over P2,500.00 every fifteen (15)
days, and itssubsequent withdrawal by the company constrained her to report back to Naga City
branch, herrepeated requests to be returned to her post having been ignored for the reason that
topmanagement was against it. She asserted that her TNT being a long and accepted
companypolicy, may not be arbitrarily withdrawn and that all her cash advances and liquidations
havebeen previously approved by her superiors including Mr. Tamayo. She deplored the
mentalanguish and social humiliation wrought to her by her present predicament and sought
understanding from the management, wanting to know the reasons behind their instruction
todeny her entry to the premises of the Naga City branch and access to company records as if
she were a thief.In a memorandum, management reiterated its directive to private respondent
for her to report back to the main office, reminding her that despite her denial regarding any
instruction fromMr. Tamayo for her to monitor the PCFC branches, records showed that she had
compliedbased on reports she had submitted to the office. Private respondent, however,
maintained herposition that she could no longer report to the Home Office after the company
withdrew hermonthly TNT. She asserted that considering her difficult situation, she had no
choice but tostick to her appointment as Senior BCO-Bicol Region and Samar there being no
supersedingmemo changing her assignment.Private respondent then received a memorandum
from the IAP for an investigation on thecharges of abandonment of work, insubordination and
refusal to report back to the place of work (Head Office), and directing her to attend a hearing at
the main office. Private respondent acknowledged receipt of said memo but proposed that the
hearing be held at Naga City or that she be allowed to make a cash advance to defray her
expenses in going to Mandaluyong City toattend the hearing and investigation by the IAP. She
failed to attend the IAP hearing on thescheduled date as she had been waiting for action from
management regarding the concernsshe had communicated. On that same day, she found out
that her salary for the period April 1to 15, 2003 was withheld and failing to get an explanation
from management, she again reported the matter to the police. Thereupon, she faxed a letter
addressed to HRD ManagerRaquel Licsi that the situation had become unbearable for her
tantamount to constructivedismissal and consequently she will ventilate her case before the
NLRC.Private respondent subsequently filed a complaint for constructive dismissal before the
regionalarbitration branch at Naga City, with claims for nonpayment of salaries, service incentive
leavepay, 13th month pay, and praying for reinstatement with full back wages, and moral
andexemplary damages, and attorneys fees. After, private respondent received another memo
onthe rescheduled date of IAP hearing, but in a handwritten reply she submitted to the Naga
CityBranch, she manifested that she could not longer report at the HO in view of the case she
hadalready instituted with the NLRC. The company later terminated her services effective May
2,2003

ISSUE
Whether or not the decision decision to transfer or re-assign private respondent from Naga
Cityto the head office in Manila was a legitimate exercise of petitioner corporations
management prerogative.
HELD
The Supreme Court ruled in the negative. Employers are allowed, under the broad concept of
management prerogative, to regulate all aspects of personnel administration including
hiring,work assignments, working methods, time, place and manner of work, tools to be
used,processes to be followed, supervision of workers, working regulations, transfer of
employees,work supervision, lay-off of workers, and the dismissal and recall of workers.It is the
employers prerogative, based on its assessment and perception of its employees
qualifications, aptitudes, and competence, to move them around in the various areas of
itsbusiness operations in order to ascertain where they will function with maximum benefit to
thecompany. An employees right to security of tenure does not give him such a vested right in
hisposition as would deprive the company of its prerogative to change his assignment or
transferhim where he will be most useful. When his transfer is not unreasonable, nor
inconvenient, norprejudicial to him, and it does not involve a demotion in rank or a diminution of
his salaries,benefits, and other privileges, the employee may not complain that it amounts to a
constructivedismissal.The managements right to transfer or re-assign its personnel, however,
is not absolute as it issubject to limitations imposed by law, collective bargaining agreements,
and general principlesof fair play and justice.The managerial prerogative to transfer personnel
must be exercised without grave abuse of discretion, bearing in mind the basic elements of
justice and fair play. Having the right shouldnot be confused with the manner in which that right
is exercised. Thus, it cannot be used as asubterfuge by the employer to rid himself of an
undesirable worker. In particular, the employermust be able to show that the transfer is not
unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in
rank or a diminution of his salaries, privileges andother benefits. Should the employer fail to
overcome this burden of proof, the employees transfer shall be tantamount to constructive
dismissal, which has been defined as a quittingbecause continued employment is rendered
impossible, unreasonable or unlikely; as an offerinvolving a demotion in rank and diminution in
pay. Likewise, constructive dismissal exists whenan act of clear discrimination, insensibility or
disdain by an employer has become so unbearableto the employee leaving him with no option
but to forego with his continued employment.In this case, petitioners failed to pass this test.
While petitioners invoke management prerogative in the transfer of private respondent to
Manila, there is no showing at all of anyvalid and legitimate reason (i.e., business necessity) for
the verbal transfer order, as in fact private respondent was not given work to do, only
occasionally and constantly avoided by hersuperiors. Her meek and desperate plea to be
allowed to return to her former post in Naga CityBranch was met with total silence on
managements end. Such insensitivity and disdainpervading her work environment became
more intense when her travel allowances werewithdrawn and management demanded for
refund of those amounts received by her on theground that she is not entitled thereto while
posted in the main office, which realized sucherroneous grant only at a late stage after all the
vouchers underwent routine approval by theconcerned officers of the company. No other
conclusion is discernible from the attendant circumstances except to confirm private
respondents sentiment gleaned from what she hadbeen hearing all along, that top management
indeed wanted to ease her out of the company,as a consequence of her husbands filing of a
similar illegal dismissal suit before the NLRC.
Petition is denied.

[G.R. No. 149371. April 13, 2005] ABERDEEN COURT, INC., and RICHARD NG, petitioners,
vs. MATEO C. AGUSTIN JR.,respondent.
FACTS
Aberdeen Court, Inc., employed Mateo C. Agustin (Agustin), herein respondent, for the
purposeof trouble shooting the electrical problems in said petitioners establishment. Agustin
wasengaged on a six-month probationary basis. The employment contract provided that should
hisperformance be considered unsatisfactory at any time by management during his
probationaryperiod, the management can terminate my services at any time, even before the
termination of the agreed six-month period.During his probationary period, the personnel of
Centigrade Industries, Inc. performed areading of the exhaust air balancing at the fifth and sixth
floors of Aberdeens premises.Petitioners claim that Agustin was placed in charge of the
undertaking. On the other hand, Agustin asserts that Engr. Abad merely requested him to
accompany the aforesaid personnel toshow the location of the exhaust air outlet at the fifth and
sixth floors of the premises. He aversthat the request of Engr. Abad is actually the responsibility
of the companys mechanicalengineers. Despite the fact that the request of Engr. Abad is not a
part of his job since he is not a mechanical engineer and there were three (3) other mechanical
engineers on duty in thecompany premises, Agustin, being a subordinate of Engr. Abad, obliged
and accompanied theaforementioned personnel to the location. There were no other specific
instructions from Engr. Abad to petitioner with respect to the conduct or actual reading to be
made by the Centigradepersonnel.It must be noted that the reading of exhaust air balancing is
under the category of heating,ventilating and air conditioning (HVAC) which are within the realm
of field of work of mechanical engineers. Being an electrical engineer, petitioner obviously has
no knowledge of the procedure and the equipment used by mechanical engineers in the
conduct of the readingof the exhaust air balancing. After the Centigrade personnel finished their
job, they submitted their report to Agustin.Petitioners allege that Agustin accepted and signed
the report, without verifying its correctness.Engineer Abad later checked the work of the
Centigrade employees only to find out that four rooms in the fifth floor and five rooms in the sixth
floor were incorrectly done. In contrast, Agustin states that after the report was handed to him,
he took the same to Engr. Abad, whohe claims was responsible for evaluating and confirming
the said report. Allegedly, instead of signing it himself, Engr. Abad directed respondent to sign it,
giving the reason that Agustin waspresent when the reading was conducted. Respondent
Agustin complied, but he now points out that his signature was not accompanied by any
qualification that he accepted the report onbehalf of Aberdeen. He claims that he signed merely
to evidence that he received a copy of thereport. According to petitioners, Aberdeen
management confronted Agustin with his failure tocheck the job and asked him to explain his
side. Agustin allegedly ignored management and left the company, which made it impossible for
Aberdeen to transmit any further notice to him.However, Agustin claims that two days after the
report was submitted by Centigrade Industries,he was summarily dismissed. In the afternoon of
that day, he received a telephone call fromthe personnel office of respondent company ordering
him to report to that office after his tourof duty. At about seven p.m. at the personnel office, Ms.
Lani Carlos of the PersonnelDepartment, informed him that Aberdeen Court is terminating his
services as electricalengineer. Petitioner was flabbergasted. Ms. Carlos then informed him that
he could get his two(2) weeks salary in the amount of P4,000, more or less, on the condition
that he will sign somedocuments which provides that the company has no more liability and that
he is voluntarilyresigning from Aberdeen Court. Aware of his rights, petitioner did not sign the
offereddocuments. He was then hurriedly led to the door by Ms. Carlos. The following day or
onJanuary 16, 1997, petitioner requested assistance from the Department of Labor
andEmployment (DOLE). A DOLE personnel told him to report for work since private
respondentsdid not serve him a notice of termination. As instructed, petitioner reported for work

on thesame day. Upon arriving at the company premises, petitioner asked Ms. Carlos if he could
stillreport for work but private respondents personnel officer told him that he cannot do
so.Respondent Agustin then filed a complaint for illegal dismissal.
ISSUE
Whether or not respondent was illegally dismissed.
HELD
The SC held that it can be gleaned from Article 281 of the Labor Code that there are two
grounds to legally terminate a probationary employee. It may be done either: a) for a just cause
or b) when employee fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the start of the employment.
Petitioners say that Agustin was terminated because he failed to qualify as a regular employee.
Petitioners, however, allegedly did not show that respondent was apprised of these reasonable
standards at the start of the employment. The rudiments of due process demand that an
employee should be apprised beforehand of the conditions of his employment and the basis
forhis advancement.The Implementing Rules of the Labor Code in Book VI, Rule I, Section 6,
also provides:Probationary employment. -- There is probationary employment where the
employee, upon hisengagement, is made to undergo a trial period during which the employer
determines his fitness to qualify for regular employment, based on reasonable standards made
known to himat the time of engagement.Probationary employment shall be governed by the
following rules:. . .(c) The services of an employee who has been engaged on probationary
basis may beterminated only for a just cause, when he fails to qualify as a regular employee in
accordancewith the reasonable standards prescribed by the employer.(d) In all cases of
probationary employment, the employer shall make known to the employeethe standards under
which he will qualify as a regular employee at the time of his engagement.Where no standards
are made known to the employee at that time, he shall be deemed aregular employee.The
above rule, however, should not be used to exculpate a probationary employee who acts ina
manner contrary to basic knowledge and common sense, in regard to which there is no needto
spell out a policy or standard to be met. It bears stressing that even if technically the readingof
air exhaust balancing is not within the realm of expertise of the complainant, still it ought not to
be missed that prudence and due diligence imposed upon him not to readily accept thereport
handed to him by the workers of Centigrade Industries. Required of the complainant wasthat he
himself proceed to the work area, inquire from the workers as to any difficultiesencountered,
problems fixed and otherwise observe for himself the progress and/orcondition/quality of the
work performed. As it is, the SC found it hard to believe that complainant would just have been
made to sign thereport to signify his presence. By saying so, complainant is inadvertently
degrading himself froman electrical engineer to a mere watchdog. It is in this regard that the SC
concured with therespondents that by his omission, lack of concern and grasp of basic
knowledge and commonsense, complainant has shown himself to be undeserving of continued
employment fromprobationary employee to regular employee. Nevertheless, it appears that
petitioners violateddue process in the dismissal of respondent, by not affording him the required
notice. As thisCourt held in Agabon, et al. v. NLRC, an employer who dismisses an employee for
just causebut does so without notice, is liable for nominal damages in the amount of P30,000.

Angel Jardin vs NLRC and Goodman Taxi (Philjama International Inc.

FACTS: Petitioners were drivers of the respondent, a domestic corporation engaged in the
operation of Goodman Taxi. Petitioners used to drive the taxi of the respondents on a 24 hour

work schedule under the boundary system and they would earn an average of 400 a day.
Nevertheless, the respondent admittedly regularly deducts from the petitioners daily earnings 30
pesos for the washing of the taxi units. Believing that the deduction is illegal, petitioners decided
to form a labor union to protect their rights and interest. Upon learning of this by the respondent,
he refused to let the petitioners to drive his taxi units, the latter suspected that they were singled
out because they are the active members of the union. Thereafter, they filed a complaint to the
labor arbiter for unfair labor practice, illegal dismissal and illegal deduction of the washing fees.
The labor arbtiter dismissed the complaint, but was reversed by the NLRC. Respondent filed for
a motion for reconsideration but was denied, remaining hopeful, again filed a motion for
reconsideration for the second time and was entertained and an order was rendered in their
favour. Petitioners, filed for reconsideration.
ISSUE: Whether or not employer-employee relationship exist.
HELD:
Yes. In the number of cases decided by the court, it ruled that the relationship between
operators and drivers under the boundary system is that of employer-employee and not of
lessor-lessee as argued by the NLRC. The court already explained that in the lease of chattels,
the lessor loses complete control over the chattel leased although the lessee cannot be reckless
in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case
of operators and drivers, the former exercise supervision and control over the latter. The
management of the business is in the owners hand. The owner as holder of the certificate of
public convenience must see to it that the drivers follow the route prescribed by the franchising
authority. The fact that the drivers do not received fixed salary but get only that excess of the
boundary is not sufficient to withdraw the relationship between that of the employer- employee.
This is based in the four fold test provided to determine the relationship, to wit: (1) the selection
and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power to control the employee's conduct, or the so-called "control test." Of these four, the
last one is the most important.The so-called "control test" is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an employer-employee
relationship. Since the relationship was already determined the termination of employment was
illegal for it did not comply with the notice and hearing prior termination and further there was no
just cause for such termination. In the issue of the washing fee, the court held that it was a valid
deduction. It is incumbent upon the driver to restore the unit he has driven to the same clean
condition when he took it out.

September
HOLIDAY
INN
14,
MANILA
1993
vs.
COMMISSION
RELATIONS
G.R. No. 109114 September 14, 1993

HOLIDAY INN MANILA and/or HUBERT LINER and BABY

DISQUITADO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Second Division) and
ELENA HONASAN, respondents.

CRUZ, J.:
The employer has absolute discretion in hiring his employees in accordance
with his standards of competence and probity. This is his prerogative. Once
hired, however, the employees are entitled to the protection of the law even
during the probation period and more so after they have become members of
the regular force. The employer does not have the same freedom in the hiring
of his employees as in their dismissal.
Elena Honasan applied for employment with the Holiday Inn and was on April
15, 1991, accepted for "on-the-job training" as a telephone operator for a
period of three weeks. 1 For her services, she received food and transportation allowance. 2 On
May 13, 1992, after completing her training, she was employed on a "probationary basis" for a period of
six months ending November 12,
1991. 3

Her employment contract stipulated that the Hotel could terminate her
probationary employment at any time prior to the expiration of the six-month
period in the event of her failure (a) to learn or progress in her job; (b) to
faithfully observe and comply with the hotel rules and the instructions and
orders of her superiors; or (c) to perform her duties according to hotel
standards.
On November 8, 1991, four days before the expiration of the stipulated
deadline, Holiday Inn notified her of her dismissal, on the ground that her
performance had not come up to the standards of the Hotel. 4
Through counsel, Honasan filed a complaint for illegal dismissal, claiming that
she was already a regular employee at the time of her separation and so was
entitled to full security of tenure. 5 The complaint was dismissed on April 22, 1992 by the Labor
Arbiter, 6 who held that her separation was justified under Article 281 of the Labor Code providing as
follows:

Probationary employment shall not exceed six (6) months from

the date the employee started working, unless it is covered by an

apprenticeship agreement stipulating a longer period. The

services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when he
fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is
allowed to work after a probationary period shall be considered a
regular employee.
On appeal, this decision was reversed by the NLRC, which held that Honasan
had become a regular employee and so could not be dismissed as a
probationer. 7 In its own decision dated November 27, 1992, the NLRC ordered the petitioners to
reinstate Honasan "to her former position without loss of seniority rights and other privileges with
backwages without deduction and qualification." Reconsideration was denied in a resolution dated
January 26, 1993. 8

The petitioners now fault the NLRC for having entertained Honasan's appeal
although it was filed out of time and for holding that Honasan was already a
regular employee at the time of her dismissal, which was made 4 days days
before the expiration of the probation period.
The petition has no merit.
On the timeliness of the appeal, it is well-settled that all notices which a party
is entitled to receive must be coursed through his counsel of record.
Consequently, the running of the reglementary period is reckoned from the
date of receipt of the judgment by the counsel of the appellant. 9 Notice to the
appellant himself is not sufficient notice. 10 Honasan's counsel received the decision of the Labor Arbiter
on May 18, 1992. 11 Before that, however, the appeal had already been filed by Honasan herself, on May
8, 1992. 12 The petitioners claim that she filed it on the thirteenth but this is irrelevant. Even if the latter
date was accepted, the appeal was nevertheless still filed on time, in fact even before the start of the
reglementary period.

On the issue of illegal dismissal, we find that Honasan was placed by the
petitioner on probation twice, first during her on-the-job training for three
weeks, and next during another period of six months, ostensibly in
accordance with Article 281. Her probation clearly exceeded the period of six
months prescribed by this article.
Probation is the period during which the employer may determine if the
employee is qualified for possible inclusion in the regular force. In the case at
bar, the period was for three weeks, during Honasan's on-the-job training.
When her services were continued after this training, the petitioners in effect

recognized that she had passed probation and was qualified to be a regular
employee.
Honasan was certainly under observation during her three-week on-the-job
training. If her services proved unsatisfactory then, she could have been
dropped as early as during that period. But she was not. On the contrary, her
services were continued, presumably because they were acceptable, although
she was formally placed this time on probation.
Even if it be supposed that the probation did not end with the three-week
period of on-the-job training, there is still no reason why that period should not
be included in the stipulated six-month period of probation. Honasan was
accepted for on-the-job training on April 15, 1991. Assuming that her probation
could be extended beyond that date, it nevertheless could continue only up to
October 15, 1991, after the end of six months from the earlier date. Under this
more lenient approach, she had become a regular employee of Holiday Inn
and acquired full security of tenure as of October 15, 1991.
The consequence is that she could no longer be summarily separated on the
ground invoked by the petitioners. As a regular employee, she had acquired
the protection of Article 279 of the Labor Code stating as follows:
Art. 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.
The grounds for the removal of a regular employee are enumerated in Articles
282, 283 and 284 of the Labor Code. The procedure for such removal is
prescribed in Rule XIV, Book V of the Omnibus Rules Implementing the Labor
Code. These rules were not observed in the case at bar as Honasan was
simply told that her services were being terminated because they were found
to be unsatisfactory. No administrative investigation of any kind was
undertaken to justify this ground. She was not even accorded prior notice, let
alone a chance to be heard.

We find in the Hotel's system of double probation a transparent scheme to

circumvent the plain mandate of the law and make it easier for it to dismiss its
employees even after they shall have already passed probation. The
petitioners had ample time to summarily terminate Honasan's services during
her period of probation if they were deemed unsatisfactory. Not having done
so, they may dismiss her now only upon proof of any of the legal grounds for
the separation of regular employees, to be established according to the
prescribed procedure.
The policy of the Constitution is to give the utmost protection to the working
class when subjected to such maneuvers as the one attempted by the
petitioners. This Court is fully committed to that policy and has always been
quick to rise in defense of the rights of labor, as in this case.
WHEREFORE, the petition is DISMISSED, with costs against petitioners. It is
so ordered.
St. Theresitas Academy vs. NLRC
(AJG)
G. R. No. 94523October 27, 1992Grino-Aquino,
J.
Petitioners:
St. Theresitas Academy and/or the Servants of St. Joseph, represented by Sr. Anita Bago
Respondents:
NLRC and Lilia Ariola
SUMMARY:
Lilia Ariola worked as a school teacher for STA for 22 years before retiring. Took a break for 3
years, then rehired again by the school because of the schools need for good teachers.
Because of some issues, the board
of directors of the school decided that they would not rehire retired teachers and that present
teachers who arerehired will not be entitled to a renewal of their contract. After 4 years of
satisfactory service, Ariola was terminated,hence filed for illegal dismissal. LA to SC ruled that
the dismissal was illegal. According to the Manual of Regulationsfor private schools, full time
teachers who rendered 3 years of satisfactory service shall be considered permanent. Also,
when she was rehired, she need not have to undergo the 3-year probationary employment for
new teachers for her teaching competence had already been tried and tested during her 22
years of service to the school in 1954 to1976. Hence, she re-entered service as a permanent
teacher already. She could not be discharged solely because of the expiration of her contract.
FACTS:

Lilia Ariola worked as a school teacher for St. Theresitas Academy (STA) for 22 years or for
1954 up to her
retirement in 1956.

3 years later, in 1979, the Mother Superior needed her to teach again because the school is in
need of qualified and good Math and English teachers. She agreed, on the condition that she
will be rehired as aregular and not as a newly-hired teacher. STA accepted.

Pre-termination issue:
There is this summer living allowance being paid to the teachers in 1979-81. After that, STA
stopped giving them such, explaining that the payment of such allowance was a mistake and
thatthey are not anymore able to afford to give it to them. The teachers protested. This made the
owner of STAin Silay City (Siervas de San Jose) angry! So they issued a resolution which
prohibits rehiring of a retiredteacher, and that any rehired teacher who is present as a faculty
member shall be notified that the contractshall not be renewed for the coming year.

After four (4) years of continuous satisfactory service, complainant was notified on March 1,
1983 that her contract would no longer be renewed at the end of the school year 1982-83.

Hence, Ariola filed with the NLRC a complaint for illegal dismissal and some benefits.

Labor Arbiters Ruling:

o
Ordered STA to pay separation pay.

NLRCs Ruling:
o
The year-to-year contract between petitioner and private respondent violated the Labor
Code,hence, despite the fixed period provided therein, private respondent became a "regular"
employeewho could not be dismissed except for cause.
o
When the year-to-year contracts went beyond three years, private respondent became a
"regular"
or "permanent" employee,
pursuant to Sec. 75 of the Manual of Regulations for private
schools
, which provides that "full-time teachers who have rendered three consecutive years of
satisfactory service shall be considered permanent
.

o
The policy of the school of no longer renewing the year-to-year contracts of teachers who had
beenrecalled from retirement, violated the security of tenure of the complainant.

Hence, this petition

ISSUES:
1. Whether or not Ariola is a regular employee --- YES
HELD:

Petition DISMISSED.

Decision of NLRC affirmed.

RATIO:
STAs Argument

The NLRC ruling

confuses
the three year-to-year
probationary
contracts given to
new
teachers before theybecome "regular and permanent," with the year-to-year or other fixed
period contract given to teachers
whoare being recalled from retirement
; for the year-to-year contract with a retired teacher is not intended to testthe teacher's fitness to
be hired on a permanent basis, unlike a new teacher who must first be tested; and

It is the prerogative of an employer to adopt a policy of not rehiring

retired
teachers and of not renewing theannual contracts of teachers
who have been recalled from retirement
.
SCs Ruling

The Labor Code defines regular employment. However, with respect to school teachers,
paragraph 75 of theManual or Regulations for Private Schools provides:
TIME TEACHERS WHO HAVE RENDERED THREE
(3)
YEARS OF SATISFACTORY SERVICE SHALL BECONSIDERED PERMANENT
.


Furthermore, paragraphs 7 and 9 of the Teacher's Contract which the petitioner and the private
respondentsigned, categorically stipulated:
Par. 7 - This CONTRACT SHALL BE IN FULL FORCE AND EFFECT during the school year
1982-1983 from June to March, unless sooner terminated by either party for valid causes and
approvedby the Director of Private Schools. In the absence of valid cause(s) for termination of
services,
thisCONTRACT shall be rendered for the same period until the teacher shall have gained a
Regular or Permanent Status, pursuant to the pertinent provisions of the Manual of Regulations
for PrivateSchools
.
Par. 9
- This CONTRACT shall not affect the Permanent Status of the teacher, even if entered
intoevery school year
;
provided that the Probationary Period for new teachers shall be three (3) years
.
Ariola, after being rehired, worked for four more satisfactory years.
When she was rehired in 1979 she did not have to undergo the 3-year probationary employment
for new teachers for her teaching competence had already been tried and tested during her 22
years of service to the school in 1954 to 1976. She re-entered the service in 1979 as a regular
or permanent teacher.
She could not be discharged solely on account of the expiration of her fourth annual contract.
She could onlybe dismissed for cause and with due process, as provided in the Labor Code.

PINES CIT Y EDUCAT IONAL CENT ER VS NLRC

[GR. NO. 96779, NOVEMBER 10, 1993]

Facts: PETITION for certiorari to reverse a resolution ofthe NLRC. Facts: Private respondents
were all employed as teachers on probationary basis by petitionerPines City Educational
Center, represented in this proceedings by its President, Eugenio Baltao. With the exception
ofJane Bentrez who was hired as a grade school teacher, the remaining privaterespondents

were hired as college instructors. All the private respondents, except Picart and Chan, signed
contracts ofemployment with petitioner for a fixed duration. On March 31, 1989, due to the
expiration ofprivate respondents'contracts and their poor performanceas teachers, they were
notified of petitioners'decision not to renew theircontracts anymore. Private respondents filed a
complaint for illegal dismissal beforethe Labor Arbiter, alleging that their dismissals werewithout
cause and in violation ofdue process. Except for private respondent Leila Dominguez who
worked with petitioners for one semester, all other privaterespondents were employedfor one to
two years.They were never informed in writing by petitioners regarding the standards or criteria
ofevaluation so as to enable them to meet the requirements for appointment as regular
employees.They were merely notified in writing by petitioners, through its chancellor, Dra. Nimia
R. Concepcion, ofthe termination oftheir respectiveservices as on March 31, 1989, on account
oftheir below-par performance as teachers. Petitioners contended that
privaterespondents'separation from employment, apart from their poorperformance, was due to
the expiration ofthe periods stipulated in their respective contracts. In the case ofprivate
respondent Dangwa Bentrez, the duration ofhis employment contract was for one year,
orbeginning June,1988 to March 1989 whereas in the case ofthe other private respondents, the
duration oftheir employment contracts was for one semester,or beginning November, 1988 to
March 1989. These stipulations werethe laws that governed theirrelationships, and there was
nothing in said contracts which was contrary to law, morals, good customs and public policy.
They argued further that they cannot be compelledo enter into new contracts with private
respondents.they concluded that the separation ofprivate respondents from the service was
justified. Labor Arbiters decision: the LaborArbiter rendered judgment in favor ofprivate
respondents, On appeal to the National Labor Relations Commission,the latteraffirmed in toto in
its resolution dated November 29, 1990,with the additional reasoning that "the stipulation in the
contract providing for a definite period in the employmentofcomplainantis obviously null and
void, as such stipulation directly assails the safeguards laid down in Article280 (ofthe Labor
Code), which explicitly abhors the consideration ofwritten or oral agreements pertaining to
definite period in regular employments. Hence, the present petition for certiorari with prayer for
the issuance ofa temporary restraining order.
Issue: T HAT THERE ISPRIMA FACIE EVIDENCE OF GRAVE ABUSE OF DISCRET ION ON T
HE PART OF T HE LABORARBIT ERBY WANT ONLY,CAPRICIOUSLY AND MALICIOUSLY
DISREGARDING PROVISIONS OF T HE LAWAND JURISPRUDENCE LAID DOWN IN
DECISIONSOF T HE HONORABLE SUPREME COURT .
Ruling: In the present case, however, We have to make a distinction. Insofar as the private
respondents who knowingly and voluntarily agreed upon fixed periods of employment are
concerned, theirservices werelawfully terminated by reason ofthe expiration of the periods of
their respective contracts. These are Dangwa Bentrez, Apollo Ribaya, Sr., Ruperta Ribaya,
VirginiaBoado, Cecilia Emocling,Jose Bentrez, Leila Dominguez and Rose Ann Bermudez.
Thus, public respondent committed grave abuse of discretion in affirming the decision of the
Labor Arbiter ordering the reinstatement and payment of full backwages and other benefits and
privileges. With respect to private respondents Roland Picart and Lucia Chan, both ofwhom did
not sign any contractfixing the periods of their employment nor to have knowingly and voluntarily
agreed upon fixed periods of employment, petitioners had the burden of proving that the
termination of their services was legal. As probationary employees, they are likewise protected
by the security of tenure provision of the Constitution. Consequently, they cannot be removed
from their positions unless for cause. We concur with these factual findings, there being no
showing that they were resolved arbitrarily. Thus, the order for their reinstatement and payment
offull backwages and other benefits and privileges from the time they were dismissed up to their
actual reinstatement is proper, conformably with Article 27 9 of the Labor Code, as amended by

Section 34 ofRepublic Act No. 6715, which took effect on March 21, 1989. It should be noted
that private respondents RolandPicart and Lucia Chan were dismissed illegally on March 31,
1989, or after the effectivity of said amendatory law. However, in ascertaining the total amount
of backwages payable to them, we go back to the rule prior to the mercury drug rule that the
total amount derived from employment elsewhere by the employee from the date of dismissal
up to the date ofreinstatement, ifany, should be deducted therefrom. We restate the underlying
reason that employees should not be permitted to enrich themselves at the expense of their
employer. In addition, the law abhors double compensation. 19 to this extent, our ruling in Alex
Ferrer, et al., v. NLRC, et al., G.R. No. 100898, promulgated on July 5, 1993, is hereby
modified. Fallo: WHEREFORE, the resolution ofpublic respondent National Labor
RelationsCommission dated November 29, 1990 is hereby MODIFIED. privaterespondents
Roland Picart and Lucia Chan are ordered reinstated withoutloss of seniority rights and other
privileges and their backwages paid in full inclusive ofallowances, and to their otherbenefits or
their monetary equivalent pursuant to Article 279 ofthe Labor Code, as amended by Section 34
ofRepublic ActNo. 67 15, subject to deduction ofincomeearned elsewhere during the period
ofdismissal, ifany, to be computed from the time they were dismissed up to the time oftheir
actual reinstatement. the rest ofthe Labor Arbiter's decision dat ed February 28, 1990, as
affirmed by the NLRCis set aside. The temporary restraining order issued on March 11,1991 is
made permanent.

Philippine Daily Inquirer v. Magtibay

Facts: Philippine Daily Inquirer, Inc. (PDI) hired Leon Magtibay (Magtibay) as a contractual
worker for 5 months. After the expiration of the said contract, PDI hired him again with a
probationary period of 6 months. A week before the end of the second contract, PDI handed him
his termination letter due to failure in meeting company standards. Magtibay then filed a
complaint for illegal dismissal before the Labor Arbiter stating that he has now become a regular
employee by working for more than 6 months. The PDI union supported him stating unfair labor
practice. Saying that he did not know he was supposed to follow company standards and that
he was not given due process in his termination. PDI explained that his 5-month contract should
not be included with his 6-month contract allowing him to be considered a regular employee,
and that he was in fact given an orientation on what the company standards were. The Labor
Arbiter agreed with PDI and dismissed his complaint and acquitted PDI of illegal dismissal and
unfair labor practice. When the case was brought to the NLRC, it reversed the Arbiters
decision and charged PDI with illegal dismissal due to the fact that Magtibay was now
considered a regular employee. Also, Magtibay was not told that he must abide by company
standards. The Court of Appeals agreed with the NLRC. PDI filed a motion for reconsideration
to no avail.
Issue: Whether or not a probationary employeesfailure to follow company standards is
ground for illegal dismissal.
WON PDI is liable for violating procedural due process in terminating Magtibay.
Ruling: The NLRC and CAs decisions were reversed and set aside thereby reinstating the
Labor Arbiters decision to acquit PDI of illegal dismissal and unfair labor practice. The SC ruled
that company standards are meant to be followed even if an employee is not made aware of

them. It is inherent that company standards are always in effect and employees, probationary or
regular, are expected to meet them. Also, PDI is did not violate procedural process due to the
fact the Magtibay was on a probationary period and was not up to company standards. Reason
is that a probationary has the duty to prove his worth to the employer to become a permanent
employee. The due process here is in the constant observance and evaluation of Magtibay s
performance, in which he failed by violating certain company rules and regulations.

Magsalin v. National Organization of Working Men

Facts:
1. The private respondents worked as sales route helpers for the petitioner (Coca Cola) for 5
months and thereafter they were hired on a daily basis. According to the petitioner, the
respondents were merely hired as substitutes for regular helpers when the latter were
unavailable or due to shortage of manpower/high volume of work. These workers would then
wait every morning outside the gates and if hired, they would be paid their wages at the end of
the day.
2. The respondents asked the petitioner to make them regular but the latter refused. Hence, 23
of these temporary workers filed a case for illegal dismissal.
Issue: W/N the respondents' work is deemed necessary and desirable in the usual business or
trade of the petitioner
RULING: Yes. The repeated hiring of the respondent workers and continuing need of their daily
services clearly attest to the necessity or desirability of their services in the regular conduct of
the business/trade of petitioner.
In determining whether employment is regular or not, the applicable test is the reasonable
connection between a particular activity performed in relation to the usual business or trade of
the employer. The nature of work must be viewed from the perspective of the business in its
entirety and not confined scope.

ALU-TUCP vs. NLRC and NSC

[G.R. No. 109902. August 02, 1994]
FACTS: Petitioners, as employees of private respondent National Steel Corporation
(NSC), filed separate complaints for unfair labor practice, regularization and

monetary benefits with the NLRC, Sub-Regional Arbitration Branch XII, Iligan City.
The complaints were consolidated and after hearing, the Labor Arbiter declared
petitioners regular project employees who shall continue their employment as such
for as long as such [project] activity exists, but entitled to the salary of a regular
employee pursuant to the provisions in the collective bargaining agreement. It also
ordered payment of salary differentials.
The NLRC in its questioned resolutions modified the Labor Arbiters decision. It
affirmed the Labor Arbiters holding that petitioners were project employees since
they were hired to perform work in a specific undertaking the Five Years
Expansion Program, the completion of which had been determined at the time of
their engagement and which operation was not directly related to the business of
steel manufacturing. The NLRC, however, set aside the award to petitioners of the
same benefits enjoyed by regular employees for lack of legal and factual basis.
The law on the matter is Article 280 of the Labor Code, where the petitioners argue
that they are regular employees of NSC because: (i) their jobs are necessary,
desirable and work-related to private respondents main business, steel-making;
and (ii) they have rendered service for six (6) or more years to private respondent
NSC.
ISSUE: Whether or not petitioners are considered permanent employees as
opposed to being only project employees of NSC.
HELD: NO. Petition for Certiorari dismissed for lack of merit. NLRC Resolutions
affirmed.
RATIO: Function of the proviso. Petitioners are not considered permanent
employees. However, contrary to petitioners apprehensions, the designation of
named employees as project employees and their assignment to a specific project
are effected and implemented in good faith, and not merely as a means of evading
otherwise applicable requirements of labor laws.
On the claim that petitioners service to NSC of more than six (6) years should
qualify them as regular employees, the Supreme Court believed this claim is
without legal basis. The simple fact that the employment of petitioners as project
employees had gone beyond one (1) year, does not detract from, or legally dissolve,
their status as project employees. The second paragraph of Article 280 of the
Labor Code, quoted above, providing that an employee who has served for at least
one (1) year, shall be considered a regular employee, relates to casual employees,
not to project employees.

Ricardo Fernandez vs. NLRC and DM Consunji, Inc. (1994, Nocon)

FACTS: Fernandez was hired by DM Consunji (November 1974). He worked for the latter until
March 1936, when his employment was terminated on the ground that the project to which he
was assigned was already completed. He thus filed a complaint for illegal dismissal with the
Labor Arbiter. The Labor Arbiter (May 1988) found that Fernandez worked continuously in
various projects ranging from 5 to 20 years and belonged to a workpool (i.e. his dismissal was
illegal). DM Consunji appealed, on the ground that Fernandez was a project employee hired on
a project-to-project basis, depending on the availability of projects. It pointed to the gaps in
Fernandez employment history to show that he was hired on an off-and-on basis.
The NLRC (September 1989), in view of (1) lack of evidence to prove the continuous
employment of Fernandez, and (2) the intermittent nature of their work as shown by project
contracts, ruled that Fernandez was a project employee. Fernandez interposed a MFR which
was denied for lack of merit (July 1991). The NLRC also noted that the MFR was filed only on
January 29, 1990, which was beyond the 10d reglementary period from date of receipt of
decision (November 13, 1989). Without mentioning the denial of the MFR, Ricardo Fernandez
filed a petition before the SC, assailing the NLRC Decision, arguing that it is more in keeping
with the intent and spirit of the law to consider him as regular employees.
ISSUE: W/N the NLRC acted with GAD in reversing the Labor Arbiters decision by
dismissing the complaint for illegal dismissal on the finding that they were project employees.
NO.
RULING: [Procedural] The yardstick to measure the timeliness of a petition for certiorari is the
reasonableness of the duration of time that had expired from the commission of the acts
complained of up to the institution of the proceedings to annul the same. Here, Fernandez
negligence or indifference for such a long period of time (November 13, 1989 - receipt of
Decision; Agusut 2, 1991 - receipt of denial of MFR; July 21, 1992 - filing of petition for
certiorari) has in the meantime rendered the questioned decision final and no longer assailable.
[Substantive] DM Consunji presented material documents (covering November 5, 1974 - March
23, 1986) showing that Fernandez was hired as a project employee with the specific dates of
hiring, duration of hiring, dates of his lay-offs, and the termination reports submitted to the
Minister of Labor. Such documents clearly showed gaps of month/s between the hiring of
Fernandez in numerous projects where he was assigned. Thus, he is governed by Policy
Instruction No. 20: Project employees are those employed in connection with a particular
construction project. They are not entitled to termination pay if they are terminated as a result of
the completion of the project or any phase thereof in which they are employed, regardless of the
number of projects in which they have been employed by a particular construction company.
The proviso in the second par. of Art. 280 (LC) (refer to your codal) deems as regular
employees only those casual employees who have rendered at least one year of service
regardless of the fact that such service may be continuous or broken. It is NOT applicable to
project employees who are specifically exempt therefrom.

Alabang Country Club, Inc., et al. vs. NLRC,

et al. - GR No. 157611

Facts:
Petitioner Alabang Country Club Inc. (ACCI), is a stock, non-profit corporation that operates and
maintains a country club and various sports and recreational facilities for the exclusive use of its
members. Sometime in 1993, Francisco Ferrer, then President of ACCI, requested its Internal
Auditor, to conduct a study on the profitability of ACCIs Food and Beverage Department (F & B
Department). Consequently, report showed that from 1989 to 1993, F & B Department had been
incurring substantial losses.
Realizing that it was no longer profitable for ACCI to maintain its own F & B Department, the
management decided to cease from operating the department and to open the same to a
contractor, such as a concessionaire, which would be willing to operate its own food and
beverage business within the club. Thus, ACCI sent its F & B Department employees individual
letters informing them that their services were being terminated and that they would be paid
separation pay. The Union in turn, with the authority of individual respondents, filed a complaint
for illegal dismissal.
Issue:
Whether or not the clubs right to terminate its employees for an authorized cause, particularly to
secure its continued viability and existence is valid.
Held:
When petitioner decided to cease operating its F & B Department and open the same to a
concessionaire, it did not reduce the number of personnel assigned thereat. It terminated the
employment of all personnel assigned at the department.
Petitioners failure to prove that the closure of its F & B Department was due to substantial
losses notwithstanding, the Court finds that individual respondents were dismissed on the
ground of closure or cessation of an undertaking not due to serious business losses or financial
reverses, which is allowed under Article 283 of the Labor Code.
The closure of operation of an establishment or undertaking not due to serious business losses
or financial reverses includes both the complete cessation of operations and the cessation of
only part of a companys activities.

R.B. Michael Press and Annalene Reyes Escobia against their former machine
operator,respondent Nicasio C. Galit,
The Facts

respondent was employed by petitioner R.B. Michael Press as an offset machine operator,
Duringhis employment, Galit was tardy for a total of 190 times and was absent without leave for
a totalof nine and a half days.

respondent was ordered to render overtime service in order to comply with a job order deadline,
but he refused to do so. The following day respondent reported for work but petitioner
Escobiatold him not to work, and to return later in the afternoon for a hearing. When he
returned, a copyof an Office Memorandum was served on him

Petitioners aver that Galit was dismissed due to the following offenses: (1) tardiness
constitutingneglect of duty; (2) serious misconduct; and (3) insubordination or willful
disobedience.

respondent was terminated from employment, gave him his two-day salary and a
terminationletter.

Respondent subsequently filed a complaint for illegal dismissal and money claims before the
National Labor Relations Commission (NLRC)

The CA found that it was not the tardiness and absences committed by respondent, but his
refusalto render overtime work which caused the termination of his employment. It ruled that the
timeframe in which respondent was afforded procedural due process is dubitable; he could not
have been afforded ample opportunity to explain his side and to adduce evidence on his behalf.
It further ruled that the basis for computing his back wages should be his daily salary at the time
of his dismissal which was PhP 230, and that his back wages should be computed from the time
of his dismissal up to the finality of the CAs decision.
Issues
1.whether there was just cause to terminate the employment of respondent
2.whether due process was observed in the dismissal process
3.whether respondent is entitled to back wages and other benefits despite his refusal to be
reinstated.
Ruling Respondents tardiness cannot be considered condoned by petitioners
In the case at bar, respondent did not adduce any evidence to show waiver or condonation on
the part of petitioners. Thus the finding of the CA that petitioners cannot use the previous
absences and tardiness because respondent was not subjected to any penalty is bereft of legal
basis. The petitioners did not impose any punishment for the numerous absences and tardiness
of respondent. Thus, said infractions can be used collectively by petitioners as a ground for
dismissal. Respondent is admittedly a daily wage earner and hence is paid based on such
arrangement. For said daily paid workers, the principle of "a days pay for a days work" is
squarely applicable. Hence it cannot be construed in any wise that such nonpayment of the
daily wage on the days he was absent constitutes a penalty.
Insubordination or willful disobedience
For willful disobedience to be a valid cause for dismissal, these two elements must concur:(1)
the employees assailed conduct must have been willful, that is, characterized by a wrongful and
perverse attitude(2) the order violated must have been reasonable, lawful, made known to the
employee, and must pertain to the duties which he had been engaged to discharge.
The issue now is, whether respondents refusal or failure to render overtime work was willful;
that is, whether such refusal or failure was characterized by a wrongful and perverse attitude.
The fact that respondent refused to provide overtime work despite his knowledge that there is a
production deadline that needs to be met, and that without him, the offset machine operator, no
further printing can be had, shows his wrongful and perverse mental attitude; thus, there is

willfulness. The Court rule that respondent unjustifiably refused to render overtime work despite
a valid order to do so. The totality of his offenses against petitioner R.B. Michael Press shows
that he was a difficult employee.
Due process: twin notice and hearing requirement
Under the twin notice requirement, the employees must be given two (2) notices before his
employment could be terminated: (1) a first notice to apprise the employees of their fault, and
(2) a second notice to communicate to the employees that their employment is being
terminated. On the surface, it would seem that petitioners observed due process (twin notice
and hearing requirement): On February 23, 1999 petitioner notified respondent of the hearing to
be conducted later that day. On the same day before the hearing, respondent was furnished a
copy of an office memorandum which contained a list of his offenses, and a notice of a
scheduled hearing in the afternoon of the same day. The next day, February 24, 1999, he was
notified that his employment with petitioner R.B. Michael Press had been terminated. The
hearing was immediately set in the afternoon of February 23, 1999the day respondent
received the first notice. Therefore, he was not given any opportunity at all to consult a union
official or lawyer, and, worse, to prepare for his defense. Regarding the February 23, 1999
afternoon hearing, it can be inferred that respondent, without any lawyer or friend to counsel
him, was not given any chance at all to adduce evidence in his defense. In the February 24,
1999 notice of dismissal, petitioners simply justified respondents dismissal by citing his
admission of the offenses charged. It did not specify the details surrounding the offenses and
the specific company rule or Labor Code provision upon which the dismissal was grounded. The
Court concludes that termination of respondent was railroaded in serious breach of his right to
due process. Therefore, the CA decision is REVERSED and SET ASIDE
. The Court declares respondents dismissal from employment VALID and LEGAL
. Petitioners are, however, ordered jointly and solidarily to pay respondent nominal damages in
the amount of PhP 30,000 for violation of respondents right to due process.

JUANITO A. GARCIA and ALBERTO J. DUMAGO,Petitioners,

vs.
PHILIPPINE AIRLINES, INC.,Respondent.
FACTS:
An administrative charge was filed by PAL against its employees-herein petitioners after they
were allegedly caught in the act of sniffing shabu when a team of company security personnel
and law enforcers raided the PAL Technical Centers Tool room Section. After due notice, PAL
dismissed petitioners for transgressing the PAL Code of Discipline, prompting them to file a
complaint for illegal dismissal and damages which was resolved by the Labor Arbiter in their
favor, thus ordering PAL to immediately comply with the reinstatement aspect of the decision.

Prior to the promulgation of the Labor Arbiters decision, the SEC placed PAL which was
suffering from severe financial losses. From the Labor Arbiters decision, PAL appealed to the
NLRC which reversed said decision of the Labor Arbiter and dismissed petitioners complaint for
lack of merit. Petitioners Motion for Reconsideration was denied and Entry of Judgment was
issued. Subsequently, the Labor Arbiter issued a Writ of Execution respecting the reinstatement
aspect of his decision, and he issued a Notice of Garnishment. PAL thereupon moved to quash
the Writ and to lift the Notice while petitioners moved to release the garnished amount. In a
related move, PAL filed an Urgent Petition for Injunction with the NLRC which affirmed the
validity of the Writ and the Notice issued by the Labor Arbiter but suspended and referred the
action to the Rehabilitation Receiver for appropriate action. PAL elevated the matter to the
appellate court which reversed the NLRC s decision. Hence, t his petition.
ISSUES:
(1) whether or not a subsequent finding of a valid dismissal removes the basis for implementing
the reinstatement aspect of a
labor arbiters decision? and
(2) whether or not the impossibility to comply with the reinstatement order due to corporate
rehabilitation provides a reasonable justification for the failure to exercise the options under
Article 223 of the Labor Code?
HELD:
Since petitioners claim against PAL is a money claim for their wages during the pendency of
PALs appeal to the NLRC, this should have been suspended pending the rehabilitation
proceedings. It was then suspended while ongoing rehabilitation. In view of the termination of
the rehabilitation proceedings, the Court now proceeds to resolve the remaining issue for
consideration. As to the first issue, the court held that a subsequent finding of a valid dismissal
removes the basis for implementing the reinstatement aspect of a labor arbiters decision.
Based on jurisprudential trend applying par 3 of Article 223 of the Labor Code which provides
that In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be executory,
pending appeal. The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein. The view as maintained in a number of cases is that Even if the
order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of
the employer to reinstate and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court. On the other hand, if the employee has been
reinstated during the appeal period and such reinstatement order is reversed with finality, the
employee is not required to reimburse whatever salary he received for he is entitled to such,
more so if he actually rendered services during the period. The provision of Article 223 is clear
that an award for reinstatement shall be immediately executory even pending appeal and the
posting of a bond by the employer shall not stay the execution for reinstatement. The legislative
intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable, even
pending appeal. To require the application for and issuance of a writ of execution as
prerequisites for the execution of a reinstatement award would certainly betray and run counter
to the very object and intent of Article 223. The reason is simple. As to the second issue, the
Court held that the peculiar predicament of a corporate rehabilitation rendered it impossible for
respondent to exercise its option under the circumstances. The spirit of the rule on
reinstatement pending appeal animates the proceedings once the Labor Arbiter issues the
decision containing an order of reinstatement. Reinstatement pending appeal necessitates its

immediate execution during the pendency of the appeal, if the law is to serve its noble purpose.
At the same time, any attempt on the part of the employer to evade or delay its execution,
should not be countenanced. After the labor arbiters decision is reversed by a higher tribunal,
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 new NLRC Rules of Procedure, now require the employer to submit a report of compliance
within 10 calendar days from receipt of the Labor Arbiters decision, disobedience to which
clearly denotes a refusal to reinstate. It is apparent that there was inaction on the part of
respondent to reinstate them, but whether such omission was justified depends on the onset of
the exigency of corporate rehabilitation. It is settled that upon appointment by the SEC of a
rehabilitation receiver, all actions for claims before any court, tribunal or board against the
corporation shall ipso jure be suspended. Case law recognizes that unless there is a restraining
order, the implementation of the order of reinstatement is ministerial and mandatory. This
injunction or suspension of claims by legislative fiat partakes of the nature of a restraining order
that constitutes a legal justification for respondents non -compliance with the reinstatement
order. Respondents failure to exercise the alternative options of actual reinstatement and
payroll reinstatement was thus justified. Such being the case, respondents obligation to pay the
salaries pending appeal, as the normal effect of the non-exercise of the options, did not attach.

Ocean Builders Construction v. Cubacub

Ocean Builders Construction v. Cubacub (2011) / Carpio-Morales
Facts
B. Cubacub was employed as OBC's maintenance man. B had chicken pox and was
adviced by GM Hao to rest for 3 days at the OBC's barracks. 3 days later, he did his
usual chores, and asked Silangga to accompany him to his house so he can rest.
Hao gave B 1k and ordered Silangga to bring B to the hospital. Silangga + 2 others
brought B to the Caybiga Hospital. B was confined, and the following day, the
hospital called for B's parents (+ Dr. Frias) and transferred B to the QCGH where he
was placed in the ICU and died the ff day. QCGH's death cert: immediate cause of
death is cardio-respiratory arrest; antecedent cause is pneumonia. Dr. Frias' causes:
cardiac arrest, multiple organ system failure, septicemia, chicken pox.
The Cubacubs filed a complaint for damages against OBC, alleging that GM
Hao was guilty of negligence, leading to B's death. RTC dismissed the complaint,
saying that Hao was not under any obligation to bring B to better hospitals. The CA
reversed this, saying that Hao violated LC 161. OBC's MfR was denied.
Issue and Holding
WON Hao was negligent. NO
1.
The present case is one for damages based on torts (employer-employee reln
incidental)
1.
Three elements

1.
Duty
2.
Breach
3.
Injury and proximate causation
2.
Provision concerned: LC 161: duty of petitioner to provide adequate
medical assistance to employees in case of emergency
1.
no allegation that company is hazardous; no allegation on the #
of employees in OBC - if more than 50, it needs to have a nurse, et al. (accdg to
Hao, 7 regular + 20 contractual employees only)
2.
accdg to RTC, what Hao did / advised constituted adequate and
immediate medical assistance; Hao does not appear to have a medical background
so he may not be expected to have known that B needs to be in a better hospital
3.
Hao's alleged negligence cannot be considered as the proximate
cause
1.
PROXIMATE CAUSE - that which, in natural and
continuous sequence, unbroken by an efficient intervening cause, produces injury &
w/o w/c, the result would not have occurred; direct result or a reasonably probable
consequence of the act or omission
4.
Not in the records: B contracting chicken pox from a co-worker;
Hao negligent in not bringing said co-worker to a doctor / isolation area

ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION and/or JESS

MANUEL, petitioners, vs. IRENE R. RANCHEZ, respondents.
NACHURA, J.:
FACTS:
Respondent Ranchez was a probationary employee for 5 months. She was hired as a cashier by Robinsons
sometime within that period. Two weeks after she was hired, she reported the loss of cash which she had
placed in the company locker. She offered to pay for the lost amount but the Operations Manager of
Robinsons had her strip-searched then reported her to the police even though they found nothing on her
person. An information for Qualified Theft was filed with the Quezon City Regional Trial Court. She was
detained for 2 weeks for failure to immediately post bail. Weeks later, respondent Ranchez filed a
complaint for illegal dismissal and damages. A year later, Robinsons sent to respondent by mail a notice
of termination and/or notice of expiration of probationary employment.

The Labor Arbiter dismissed the complaint for illegal dismissal, alleging that at the time of filing
respondent Ranchez had not yet been terminated. She was merely investigated. However, the NLRC
reversed this ruling, stating that Ranchez was illegally dismissed and that Robinson's should reinstate her.
It held that Ranchez was deprived of due process when she was strip-searched and sent to jail for two
weeks because such amounted to constructive dismissal, making it impossible for the respondent to
continue under the employment. Even though she was merely a probationary employee, the lapse of the
probationary contract did not amount to a valid dismissal because there was already an unwarranted
constructive dismissal beforehand.
The NLRC denied Robinson's motion for reconsideration. The CA affirmed the decision of the NLRC.
ISSUE: Whether respondent was illegally terminated from employment by petitioners.
HELD: The petition is unmeritorious.
LABOR LAW: Probationary employees; termination of employment
There is probationary employment when the employee upon his engagement is made to undergo a trial
period during which the employer determines his fitness to qualify for regular employment based on
reasonable standards made known to him at the time of engagement.
A probationary employee, like a regular employee, enjoys security of tenure.However, in cases of
probationary employment, aside from just or authorized causes of termination, an additional ground is
provided under Article 281 of the Labor Code,i.e., the probationary employee may also be terminated for
failure to qualify as a regular employee in accordance with reasonable standards made known by the
employer to the employee at the time of the engagement.Thus, the services of an employee who has been
engaged on probationary basis may be terminated for any of the following:
(1) a just or
(2) an authorized cause; and
(3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by
the employer.
Article 277(b) of the Labor Code mandates that the employer shall furnish the worker, whose
employment is sought to be terminated, a written notice containing a statement of the causes of
termination, and shall afford the latter ample opportunity to be heard and to defend himself with the
assistance of a representative if he so desires, in accordance with company rules and regulations pursuant
to the guidelines set by the Department of Labor and Employment.
In the instant case, based on the facts on record, petitioners failed to accord respondent 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 and the Prosecutor's Office, left respondent with no choice but
to cry foul.Administrative investigation was not conducted by petitioner Supermarket.On the same day
that the missing money was reported by respondent to her immediate superior, the company already prejudged her guilt without proper investigation, and instantly reported her to the police as the suspected
thief, which resulted in her languishing in jail for two weeks.
The due process requirements under the Labor Code are mandatory and may not be replaced with police
investigation or court proceedings. An illegally or constructively dismissed employee, respondent is
entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and

(2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively.
In this case, since respondent was a probationary employee at the time she was constructively dismissed
by petitioners, she is entitled to separation pay and backwages. Reinstatement of respondent is no longer
viable considering the circumstances.
DENIED
=======================================================================

Realda v. New Age Graphics, Inc. et. al.

G.R. No. 192190, April 25, 2012.

Dismissal; willful disobedience. For willful disobedience to be a valid cause for

dismissal, these two elements must concur: (1) the employees assailed conduct must
have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee, and
must pertain to the duties which he had been engaged to discharge.
The petitioners arbitrary defiance to Graphics, Inc.s order for him to render overtime
work constitutes willful disobedience. Because of his refusal to render overtime work,
the company failed to meet its printing deadlines, resulting in losses to the company.
The Supreme Court took into account the fact that petitioner was inclined to absent
himself and to report late for work despite being previously penalized, and affirmed the
CAs ruling that the petitioner is indeed utterly defiant of the lawful orders and the
reasonable work standards prescribed by his employer. The Court reiterated its previous
rulings stating that an employer has the right to require the performance of overtime
service in any of the situations contemplated under Article 89 of the Labor Code and an
employees non-compliance is willful disobedience.

Automotive Engine, et al. v.Progresibong Unyon, et al.

FACTS:
This is a resolution to the Partial Motion for Reconsideration filed by Progresibong Unyon ng
Manggagawa sa AER (Unyon).
In G.R. No. 160138, Automotive Engine Rebuilders, Inc. (AER) filed a complaint against Unyon
and its eighteen (18) members for illegal strike.
In G.R. No. 160192, Unyon, together with its thirty-two (32) members filed a complaint against
AER alleging that AER is guilty of Unfair Labor Practices, Illegal Dismissal, Illegal Suspension,
and Run-away shop. Unyon prayed for reinstatement of its members with full payment of
backwages.
The Labor Arbiter rendered a decision in favor of Unyon and directed AER to reinstate the
concerned employees but without backwages. Both parties appealed to the NLRC.
The NLRC reversed the Labor Arbiters decision and ruled that the strike conducted by Unyon
was illegal and therefore the employees should not be reinstated. Unyon filed a motion for
reconsideration. The NLRC denied the motion.
Unyon appealed to the Court of Appeals. The CA ordered the reinstatement of the employees
but without backwages.
Aggrieved, both parties filed the present consolidated petitions. Unyon argued that the CA erred
in not awarding backwages. AER, on the other hand, argued that the CA erred in ordering the
reinstatement of the employees.
The Supreme Court rendered its decision denying the petition. It maintained the CAs decision of
reinstatement without backwages. Hence, Unyon filed the subject Motion for Partial
Reconsideration.
ISSUE: Whether or not the employees are entitled to reinstatement with payment of full
backwages?
HELD: After going over the records again, the Court holds that only nine (9) of the
fourteen (14) excluded employees deserve to be reinstated immediately with backwages.
LABOR LAW: reinstatement, backwages
Records disclose that thirty-two (32) employees filed a complaint for illegal suspension and
unfair labor practice against AER. Out of these 32 workers, only eighteen (18) of them were
charged by AER with illegal strike leaving fourteen (14) of them excluded from its complaint.
Technically, as no charges for illegal strike were filed against these 14 employees, they cannot
be among those found guilty of illegal strike. Therefore, they should be reinstated and given
their backwages.

Out of these 14 employees, however, five (5) failed to write their names and affix their
signatures in the Membership Resolution attached to the petition filed before the CA, authorizing
Union President Arnold Villota to represent them. Because of their failure to affix their names
and signatures in the Membership Resolution, only nine (9) employees who signed their names
can be granted the relief prayed for.
These excluded nine (9) workers, who signed their names in their petition before the CA,
deserve to be reinstated immediately and granted backwages. It is basic in jurisprudence that
illegally dismissed workers are entitled to reinstatement with backwages plus interest at the
legal rate.
Motion for Partial Reconsideration with respect to nine (9) employees GRANTED.

SAMPAGUITA AUTO TRANSPORT v. NLRC

G.R. No. 197384. January 30, 2013
Facts
Sampaguita Auto Transport Corporation was charged with illegal dismissal for allegedly firing
Sagad when he was, as he claimed, hired as a regular employee, not as a probationary
employee as the company claimed. Allegedly, sometime around September, an evaluator
boarded Sagads bus. Theevaluator described Sagads manner of driving as "reckless driver,
nakikipaggitgitan, nakikipaghabulan, nagsasakay sa gitna ng kalsada, sumusubsob ang
pasahero. " Sagadhe claimed that he could not have been driving as reported because his
pregnant wife and one of his children were with him on the bus. He admitted though that at one
time, he chased a bus to serve warning on its driver not to block his bus when he was
overtaking. He also admitted that once in a while, he sped up to make up for lost time in making
trips. The company further alleged it conducted a an evaluation of Sagads performance. It
requested conductors who had worked with Sagad to comment on his work. Conductors
revealed that Sagad proposed that they cheat on the company by way of an unreported early
bus trip. Dispatcher E. Castillo likewise submitted a negative report and even recommended the
termination of Sagadsemployment. The company also cited Sagads involvement in a hit-andrun accident. Allegedly, Sagad did not report the accident to the company. Upon conclusion of
the evaluation, the company terminated Sagads employment for his failure to qualify as a
regular employee.
Issue
The issues are (1) whether Sampaguita Auto Transport Corp. dismissed Sagad illegally; and (2)
whether he is entitled to back wages and separation pay, totalingP604,050.00, after working
with the company for barely five months.
Held/Ratio
(1) No. The SC ruled that Sagad was not dismissed without basis. During his brief employment
with the company, he exhibited the tendency to speedup when he finds the need for it, very
obviously in violation of traffic rules, regulations and company policy. Instead of negating the
evaluators observations, his admissions make them credible. Also, the SC find no evidence that
Hemoroz and Lucero had an ax to grind against Sagad so that they would lie about their
impression of him as a bus driver. Significantly, their statements validate Castillos own

observation that he heard talks of Sagads orders to the conductors for them to cheat on the
company. The scheme, contrary to Sagads explanation, can only be committed with the
cooperation, or even at the behest, of the driver, as the proposed scheme is for the bus to make
unscheduled, but unreported, early trips.
The company cites Sagads involvement in a hit-and-run incident. The Traffic Accident
Investigation Report45 is evidence to such incident. The report was corroborated by the sworn
statements of driver of the Elf truck, UFF-597, the second party in the incident, and the driver of
the White Honda City, the first partyin the vehicular accident. Also, the CA misappreciated the
law when it declared that the grounds relied upon by the company in terminating Sagads
employment are not among those enumerated under Article 282 of the Labor Code as just
causes for employee dismissals. Article 282 of the Code provides:
Art. 282. Termination by employer.

An employer may terminate an employment for any of the following causes:(a) Serious
misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;(b) Gross and habitual neglect by the employee of his
duties;(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;(d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his family or his duly authorized
representative; and (e) Other causes analogous to the foregoing. The irregularities or infractions
committed by Sagad in connection with his work asa bus driver constitute a serious misconduct
or, at the very least, conduct analogous to serious misconduct, under the above-cited Article 282
of the Labor Code. To be sure, his tendency to speed up during his trips, his reckless driving, his
picking up passengers in the middle of the road, his racing with other buses and his jostling for
vantage positions do not speak well of him as a bus driver. Under the circumstances, Sagad has
become a liability rather than an asset to his employer, more so when we consider that he
attempted to cheat on the company or could have, in fact, defrauded the company during his
brief tenure as a bus driver.
This calls to mind Castillos report on the low revenue of Sagads bus, an observation which is
validated by the companys Daily Operation Reports fro m June to October2006.50
All told, we find substantial evidence supporting Sagads removal as a bus driver.
Through his reckless driving and his schemes to defraud the company, Sagad committed
serious misconduct and breach of the trust and confidence of his employer, which, without
doubt, are just causes for his separation from the service.
It is well to stress, at this point, an earlier pronouncement of the Court "that justiceis in every
case for the deserving, to be dispensed in the light of the established facts and applicable law
and doctrine."(2) No. Even as we find a just cause for Sagads dismissal, we agree with the CA
that the company failed to comply with the two-notice rule. It failed to serve notice of:(1) the
particular acts for which Sagad was being dismissed on November 5, 2006and (2) his actual
dismissal. Consistent with our ruling in Agabon v. NLRC, 52 wehold that the violation of Sagad's
right to procedural due process entitles him to an indemnity in the form of nominal damages.
Considering the circumstances in the present case, we deem it appropriate to award Sagad
P30,000.00.

Pasos v. PNCC
FACTS:
Based on the PNCCs Personnel Action Form Appointment for Project Employm
ent, petitioner was designated as Clerk II (Accounting) and was assigned to the NAIA II Pr
oject. However, his employment did not end on the expiration but was extended until for more
than two years. He was rehired, his employment was extended, rehired, and finally, his project e
mployment was terminated. However, his superior required him still to report. Upon the medica
l examination, he was required by the doctor to take sick leave which he did. Upon his return aft
er 74 days, he was informed that he was already dismissed.
ISSUE:
Whether or not employers failure to file termination reports after every project c
ompletion constitutes the regularity of the project employee.
RULING:
Yes. Duration of project employment should be determined at the time of hiring.
While for first three months, petitioner can be considered a project employee of PNCC, his empl
oyment thereafter, when his services were extended without any specification of as to the durati
on, made him a regular employee of PNCC. And his status as a regular employee was not affecte
d by the fact that he was assigned to several other projects and there were intervals in between s
aid projects since he enjoys security of tenure.
Moreover, failure of an employer to file termination reports after every project completion prove
s that an employee is not a project employee. Records clearly showed that PNCC did not report t
he termination of petitioners supposed project employment for the NAIA II Project to the DOL
E. Department Order No. 19, or the Guidelines Governing the Employment of Workers in the C
onstruction Industry, requires employers to submit a report of an employees termination to th
e nearest public employment office every time an employees employment is terminated due to a
completion of a project. PNCC submitted as evidence of its compliance with the requirement sup
posed photocopies of its termination reports, each listing petitioner as among the employees affe
cted. Unfortunately, none of the reports submitted pertain to the NAIA II Project. Moreover, DO
LE NCR verified that petitioner is not included in the list of affected workers based on the termi
nation reports filed by PNCC. This certification from DOLE was not refuted by PNCC.
With regard his dismissal, a regular employee dismissed for a cause other than the just or author
ized causes provided by law is illegally dismissed. Petitioners regular employment was terminat
ed by PNCC due to contract expiration or project completion, which are both not among the just
or authorized causes provided in the Labor Code, as amended, for dismissing a regular employee
. Thus, petitioner was illegally dismissed and according to Article 279 of the Labor Code, he is en
titled to reinstatement, full back wages, inclusive of allowances, and to his other benefits or their
monetary equivalent from the time his compensation was withheld from him up to the time of hi
s actual reinstatement.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

JEROME M. DAABAY, petitoner v. COCA-COLA BOTTLERS PHILS., INC.,

respondent
G.R. No. 199890 | August 19, 2013

FACTS
Petitioner Jerome Daabay was employed as Sales Logistics Checker with Coca-Cola Bottlers Phils., Inc.
until his termination in June 2005, following receipt of information that he was part of a conspiracy that
allowed the pilferage of company property. The losses to the company comprised of cases of assorted
softdrinks, empty bottles, missing shells and missing pallets valued at P20,860,913.00.
After requiring Daabay to explain in writing his participation in the scheme, followed by a formal
investigation, Coca-Cola served upon Daabay a Notice of Termination that cited pilferage, serious
misconduct and loss of trust and confidence as grounds.
Daabay filed a complaint for illegal dismissal, illegal suspension, unfair labor practice and monetary
claims against Coca-Cola Bottlers Phils., Inc. and three officers of the company.
On April 18, 2008. Executive Labor Arbiter Noel Magbanua rendered a decision in favor of Daabay. He
ruled that Daabay was illegally dismissed because his participation in the alleged conspiracy was not
proved by substantial evidence. He further ordered the payment to Daabay of backwages and separation
pay (1 month for every year of service) or retirement benefits, as may be applicable.
Upon Coca-Cola et al's appeal with the NLRC, the NLRC reversed the finding of illegal dismissal. It held
that there was "reasonable and well-founded basis to dismiss Daabay, not only for serious misconduct,
but also for breach of trust or loss of confidence arising from such company losses". It ruled that Daabay's
participation in the conspiracy was sufficiently established, evidenced by his signature in several
documents that made the fraudulent scheme possible, as well as in his failure to detect the pilferage,
considering that such is necessarily connected with his duties and functions. Despite the ruling on the
legality of the dismissal, however, the NLRC awarded retirement benefits in favor of Daabay.
Coca-Cola filed a partial motion for reconsideration to assail the award of retirement benefits. NLRC
denied the MR, explaining that "there was a need to humanize the severe effects of dismissal" and
"tilt the scales of justice in favor of labor as a measure of equity and compassionate social
justice."
Coca-Cola appealed to the CA. The CA agreed that the award of retirement benefits lacked basis,
considering that Daabay was dismissed for just cause. It granted Coca-Cola's petition and deleted the
portion of the NLRC resolution remanding the case to the Executive Labor Arbiter or Regional Arbitration
Branch of origin for computation of retirement benefits.
ISSUE
Whether Daabay is entitled to the retirement benefits awarded by NLRC, despite his dismissal for a just
cause.
RULING
No. Being intended as a mere measure of equity and social justice, the NLRCs award was then akin to
a financial assistance or separation pay that is granted to a dismissed employee notwithstanding the
legality of his dismissal. Jurisprudence on such financial assistance and separation pay then equally
apply to this case. The Court has ruled, time and again, that financial assistance, or whatever name it
is called, as a measure of social justice is allowed only in instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character. As
explained in PLDT v NLRC: "[S]eparation pay shall be allowed as a measure of social justice only in those
instances where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker,
the employer may not be required to give the dismissed employee separation pay, or financial assistance,
or whatever other name it is called, on the ground of social justice."

A contrary rule would have the effect of rewarding rather than punishing the rring employee of his offense.
If the employee who steals from the company is granted separation pay even as he is validly dismissed, it
is not unlikely that he will commit a similar offense in his next employment because he thinks he can
expect a like leniency if he is again found out. This kind of misplaced compassion is not going to do labor
in general any good as it will encourage the infiltration of its ranks by those who do not deserve the
protection and concern of the Constitution.
Considering that Daabay was declared by the NLRC to have been lawfully dismissed by Coca-Cola on
the grounds of serious misconduct, breach of trust and loss of confidence, the award based on equity is
unwarranted.
THE PETITION IS DENIED. CA DECISION IS AFFIRMED.

SKM ART CRAFT CORP. v EFREN BAUCA, ET AL.

GR 171282 | NOV 27 2013

FACTS:
The 23 respondents were employed by petitioner SKM Art Craft Corporation which is engaged
in the handicraft business. On April 18, 2000, around 1:12 a.m., a fire occurred at the inspection
and receiving/repair/packing area of petitioners premises in Intramuros, Manila. The fire
investigation report stated that the structure and the beach rubber building were totally
damaged. Also burned were four container vans and a trailer truck. The estimated damage
was P22 million.
On May 8, 2000, petitioner informed respondents that it will suspend its operations for six
months, effective May 9, 2000. On May 16, 2000, only eight days after receiving notice of the
suspension of petitioners operations, the 23 respondents (and other co-workers) filed a
complaint for illegal dismissal. They alleged that there was discrimination in choosing the
workers to be laid off and that petitioner had discovered that most of them were members of a
newly-organized union.
Petitioner denied the claim of illegal dismissal and said that Article 286 of the Labor Code allows
the bona fide suspension of a business or undertaking for a period not exceeding six months.
Petitioner claimed that the fire cost it millions in losses and that it is impossible to resume its
normal operations for a significant period of time.
LA: respondents were illegally dismissed and ordered petitioner to reinstate them and pay them
back wages. The Labor Arbiter ruled that the fire that burned a part of petitioners premises may
validate the suspension of respondents employment, but the suspension must not exceed six
months. Since petitioner failed to recall respondents after the lapse of six months, the Labor
Arbiter held that respondents were illegally dismissed.
NLRC: set aside the Labor Arbiters Decision and ruled that there was no illegal dismissal.
CA: set aside the NLRC Decision and Resolution and reinstated the Labor Arbiters Decision.
The CA ruled that petitioner failed to prove that its suspension of operations is bona fide . The
CA noted that the proof of alleged losses the list of items and materials allegedly burned
was not even certified or signed by petitioners accountant or comptroller. And even if the
suspension of operations is considered bona fide, the CA said that respondents were not
reinstated after six months.

ISSUE:

Whether respondents were illegally dismissed.

HELD: While we agree with the NLRC that the suspension of petitioners operation is valid, the
Labor Arbiter and the CA are correct that respondents were illegally dismissed since they were
not recalled after six months, after the bona fide suspension of petitioners operations.
We agree with the Labor Arbiter and the CA that respondents were already considered illegally
dismissed since petitioner failed to recall them after six months, when its bona fide suspension
of operations lapsed. We stress that under Article 286 of the Labor Code, the employment will
not be deemed terminated if the bona fide suspension of operations does not exceed six
months. But if the suspension of operations exceeds six months, the employment will be
considered terminated.
Under Article 286 of the Labor Code, the bona fide suspension of the operation of a business or
undertaking for a period not exceeding six months shall not terminate employment.
Consequently, when the bona fide suspension of the operation of a business or undertaking
exceeds six months, then the employment of the employee shall be deemed terminated. By the
same token and applying said rule by analogy, if the employee was forced to remain without
work or assignment for a period exceeding six months, then he is in effect constructively
dismissed.
Indeed, petitioners manifestation dated October 2, 2001 that it is willing to admit respondents if
they return to work was belatedly made, almost one year after petitioners suspension of
operations expired in November 2000. We find that petitioner no longer recalled, nor wanted to
recall, respondents after six months.
HENCE, THE RESPONDENTS WERE ILLEGALLY DISMISSED.
(This case was submitted for settlement. Wherein respondents herein signed a Release, Waiver
and Quitclaim; the court upheld the settlement. But for the purpose of determining whether there
was illegal dismissal in the case at bar, mention the ruling above.)