GSIS and GARCIA vs.

KMG DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
G.R. No. 170132 December 6, 2006

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) and WINSTON F. GARCIA, in his capacity as GSIS President & General Manager, petitioners,
vs.
KAPISANAN NG MGA MANGGAGAWA SA GSIS, respondents.

FACTS: Forming a huge part of the October 4 to October 7, 2004 mass action participants were GSIS personnel, among them members of the herein
respondent Kapisanan Ng Mga Manggagawa sa GSIS (KMG or the Union), a public sector union of GSIS rank-and-file employees.

On or about October 10, 2004, the manager of the GSIS Investigating Unit issued a memorandum directing 131 union and non-union members to show
cause why they should not be charged administratively for their participation in said rally. In reaction, KMGs counsel, Atty. Manuel Molina, sought
reconsideration of said directive on the ground, among others, that the subject employees resumed work on October 8, 2004 in obedience to the return-
to-work order thus issued. The plea for reconsideration was, however, effectively denied by the filing, on October 25, 2004, of administrative charges
against some 110 KMG members for grave misconduct and conduct prejudicial to the best interest of the service.

KMG filed a petition for prohibition with the CA against these charges. The CA granted the petition and enjoined the GSIS from implementing the issued
formal charges and from issuing other formal charges arising from the same facts and events.

CA equated the right to form associations with the right to engage in strike and similar activities available to workers in the private sector. In the concrete,
the appellate court concluded that inasmuch as GSIS employees are not barred from forming, joining or assisting employees organization, petitioner
Garcia could not validly initiate charges against GSIS employees waging or joining rallies and demonstrations notwithstanding the service-disruptive effect
of such mass action.

ISSUE: WON the strike conducted by the GSIS employees were valid

HELD: NO

The 1987 Constitution expressly guaranteeing, for the first time, the right of government personnel to self-organization to complement the provision
according workers the right to engage in peaceful concerted activities, including the right to strike in accordance with law.. It was against the backdrop of
the aforesaid provisions of the 1987 Constitution that the Court resolved Bangalisan v. Court of Appeals. In it, we held, citing MPSTA v. Laguio, Jr., that
employees in the public service may not engage in strikes or in concerted and unauthorized stoppage of work; that the right of government employees
to organize is limited to the formation of unions or associations, without including the right to strike.

Specifically, the right of civil servants to organize themselves was positively recognized in Association of Court of Appeals Employees vs. Ferrer-Caleja. But,
as in the exercise of the rights of free expression and of assembly, there are standards for allowable limitations such as the legitimacy of the purpose of
the association, [and] the overriding considerations of national security.

As regards the right to strike, the Constitution itself qualifies its exercise with the provision in accordance with law. This is a clear manifestation that the
state may, by law, regulate the use of this right, or even deny certain sectors such right. Executive Order 180 which provides guidelines for the exercise of
the right of government workers to organize, for instance, implicitly endorsed an earlier CSC circular which enjoins under pain of administrative sanctions,
all government officers and employees from staging strikes, demonstrations, mass leaves, walkouts and other forms of mass action which will result in
temporary stoppage or disruption of public service by stating that the Civil Service law and rules governing concerted activities and strikes in government
service shall be observed.

Public employees going on disruptive unauthorized absences to join concerted mass actions may be held liable for conduct prejudicial to the best interest
of the service.

With the view we take of the events that transpired on October 4-7, 2004, what respondents members launched or participated in during that time
partook of a strike or, what contextually amounts to the same thing, a prohibited concerted activity. The phrase prohibited concerted activity refers to
any collective activity undertaken by government employees, by themselves or through their employees organization, with the intent of effecting work
stoppage or service disruption in order to realize their demands or force concessions, economic or otherwise; it includes mass leaves, walkouts, pickets and
acts of similar nature. Indeed, for four straight days, participating KMG members and other GSIS employees staged a walk out and waged or participated in
a mass protest or demonstration right at the very doorstep of the GSIS main office building. The record of attendance for the period material shows that,
on the first day of the protest, 851 employees, or forty eight per cent (48%) of the total number of employees in the main office (1,756) took to the streets
during office hours, from 6 a.m. to 2 p.m.,leaving the other employees to fend for themselves in an office where a host of transactions take place every
business day. On the second day, 707 employees left their respective work stations, while 538 participated in the mass action on the third day. A smaller
number, i.e., 306 employees, but by no means an insignificant few, joined the fourth day activity.

In whatever name respondent desires to call the four-day mass action in October 2004, the stubborn fact remains that the erring employees, instead of
exploring non-crippling activities during their free time, had taken a disruptive approach to attain whatever it was they were specifically after. As events
evolved, they assembled in front of the GSIS main office building during office hours and staged rallies and protests, and even tried to convince others to
join their cause, thus provoking work stoppage and service-delivery disruption, the very evil sought to be forestalled by the prohibition against strikes by
government personnel.

To petitioner Garcia, as President and General Manager of GSIS, rests the authority and responsibility, under Section 45 of Republic Act No. 8291, the GSIS
Act of 1997, to remove, suspend or otherwise discipline GSIS personnel for cause. At bottom then, petitioner Garcia, by filing or causing the filing of
administrative charges against the absenting participants of the October 4-7, 2004 mass action, merely performed a duty expected of him and enjoined by
law. Regardless of the mood petitioner Garcia was in when he signed the charge sheet, his act can easily be sustained as legally correct and doubtless
within his jurisdiction.

BRENT SCHOOL, INC.DIMACHE vs. RONALDO ZAMORA and DOROTEO R. ALEGRE

G.R. No. L-48494 February 5, 1990 en banc

FACTS:

Private respondent Doroteo R. Alegre was engaged as athletic director by petitioner Brent School, Inc. at a yearly compensation of P20,000.00. The
contract fixed a specific term for its existence, five (5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Subsequent
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subsidiary agreements dated March 15, 1973, August 28, 1973, and September 14, 1974 reiterated the same terms and conditions, including the expiry
date, as those contained in the original contract of July 18, 1971.

On April 20,1976, Alegre was given a copy of the report filed by Brent School with the Department of Labor advising of the termination of his services
effective on July 16, 1976. The stated ground for the termination was "completion of contract, expiration of the definite period of employment." Although
protesting the announced termination stating that his services were necessary and desirable in the usual business of his employer, and his employment
lasted for 5 years - therefore he had acquired the status of regular employee - Alegre accepted the amount of P3,177.71, and signed a receipt therefor
containing the phrase, "in full payment of services for the period May 16, to July 17, 1976 as full payment of contract."

The Regional Director considered Brent School's report as an application for clearance to terminate employment (not a report of termination), and
accepting the recommendation of the Labor Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent
employee," to his former position without loss of seniority rights and with full back wages.

ISSUE:

Whether or not the provisions of the Labor Code, as amended, have anathematized "fixed period employment" or employment for a term.

RULING:

Respondent Alegre's contract of employment with Brent School having lawfully terminated with and by reason of the expiration of the agreed term of
period thereof, he is declared not entitled to reinstatement.

The employment contract between Brent School and Alegre was executed on July 18, 1971, at a time when the Labor Code of the Philippines (P.D. 442) had
not yet been promulgated. At that time, the validity of term employment was impliedly recognized by the Termination Pay Law, R.A. 1052, as amended by
R.A. 1787. Prior, thereto, it was the Code of Commerce (Article 302) which governed employment without a fixed period, and also implicitly acknowledged
the propriety of employment with a fixed period. The Civil Code of the Philippines, which was approved on June 18, 1949 and became effective on August
30,1950, itself deals with obligations with a period. No prohibition against term-or fixed-period employment is contained in any of its articles or is
otherwise deducible therefrom.

It is plain then that when the employment contract was signed between Brent School and Alegre, it was perfectly legitimate for them to include in it a
stipulation fixing the duration thereof Stipulations for a term were explicitly recognized as valid by this Court.

The status of legitimacy continued to be enjoyed by fixed-period employment contracts under the Labor Code (PD 442), which went into effect on
November 1, 1974. The Code contained explicit references to fixed period employment, or employment with a fixed or definite period. Nevertheless,
obscuration of the principle of licitness of term employment began to take place at about this time.

Article 320 originally stated that the "termination of employment of probationary employees and those employed WITH A FIXED PERIOD shall be subject to
such regulations as the Secretary of Labor may prescribe." Article 321 prescribed the just causes for which an employer could terminate "an employment
without a definite period." And Article 319 undertook to define "employment without a fixed period" in the following manner: where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the
employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

Subsequently, the foregoing articles regarding employment with "a definite period" and "regular" employment were amended by Presidential Decree No.
850, effective December 16, 1975.

Article 320, dealing with "Probationary and fixed period employment," was altered by eliminating the reference to persons "employed with a fixed period,"
and was renumbered (becoming Article 271).

As it is evident that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust the gamut of employment contracts to
which the lack of a fixed period would be an anomaly, but would also appear to restrict, without reasonable distinctions, the right of an employee to freely
stipulate with his employer the duration of his engagement, it logically follows that such a literal interpretation should be eschewed or avoided. The law
must be given a reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term employment and subverting to
boot the principle of freedom of contract to remedy the evil of employer's using it as a means to prevent their employees from obtaining security of tenure
is like cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the head.

Such interpretation puts the seal on Bibiso upon the effect of the expiry of an agreed period of employment as still good rulea rule reaffirmed in the
recent case of Escudero vs. Office of the President (G.R. No. 57822, April 26, 1989) where, in the fairly analogous case of a teacher being served by her
school a notice of termination following the expiration of the last of three successive fixed-term employment contracts, the Court held:
Reyes (the teacher's) argument is not persuasive. It loses sight of the fact that her employment was probationary, contractual in nature, and one with a
definitive period. At the expiration of the period stipulated in the contract, her appointment was deemed terminated and the letter informing her of the
non-renewal of her contract is not a condition sine qua non before Reyes may be deemed to have ceased in the employ of petitioner UST. The notice is a
mere reminder that Reyes' contract of employment was due to expire and that the contract would no longer be renewed. It is not a letter of termination.

Paraphrasing Escudero, respondent Alegre's employment was terminated upon the

expiration of his last contract with Brent School on July 16, 1976 without the necessity of any notice. The advance written advice given the Department of
Labor with copy to said petitioner was a mere reminder of the impending expiration of his contract, not a letter of termination, nor an application for
clearance to terminate which needed the approval of the Department of Labor to make the termination of his services effective. In any case, such
clearance should properly have been given, not denied.

MERLINDA JACINTO, ET.AL. vs. HON. COURT OF APPEALS; THE CIVIL SERVICE COMMISSION; and THE SECRETARY OF EDUCATION, CULTURE AND SPORTS,
respondents.
By:Wea Matriz

FACTS: Petitioners are public school teachers from various schools in Metropolitan Manila. They incurred unauthorized absences in connection with the
mass actions then staged. DECS Sec. Cario immediately issued a return-to-work order, but it was ignored by petitioners. Sec. Cario issued formal charges
and preventive suspension orders against them. They were administratively charged with gross misconduct; gross neglect of duty, etc. for joining
unauthorized mass actions; ignoring report-to-work directives; etc. During the investigation, petitioners did not file their answers or controvert the charges
against them. As a consequence, Sec. Cario, in his decisions found them guilty as charged and imposed the penalty of dismissal except Jacinto which is
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and Agustin who were meted only six (6) months suspension.
Merit Systems Protection Board (MSPB): dismissed the appeals for lack of merit
CSC: set aside the Orders of the MSPB; found the petitioners (except Merlinda Jacinto) guilty of Conduct Prejudicial to the Best Interest of the Service;
imposed upon them the penalty of six (6) months suspension without pay; and automatically reinstated them to the service without payment of back
salaries; the CSC found her guilty of Violation of Reasonable Office Rules and Regulations; imposed upon her the penalty of reprimand; and automatically
reinstated her in the service without payment of back salaries
CA: Affirmed decision of CSC
Hence, this petition.
ISSUE: Whether civil servants are guilty of grave misconduct in participating in mass actions.
HELD: Yes. The terms and conditions of employment in the government, including any political subdivision or instrumentality thereof and government-
owned and controlled corporations with original charters are governed by law and employees therein shall not strike for the purpose of securing changes.
Workers in the public sector do not enjoy the right to strike, the Constitution itself qualifies its exercise with the proviso in accordance with law. This is a
clear manifestation that the state may, by law, regulate the use of this right, or even deny certain sectors such right. The Civil Service law and rules
governing concerted activities and strikes in the government service shall be observed.
The teachers have given cause for their suspension, for being absent in their classes and joining in the mass actions. They were not fully innocent of the
charges against them although they were eventually found guilty only of conduct prejudicial to the best interest of the service and not grave misconduct or
other offense warranting their dismissal from the service; being found liable for a lesser offense is not equivalent to exoneration. In the case of Merlinda
Jacinto, there was a finding that there was no proof that she joined the unlawful mass actions.
DISPOSITIVE: Petition is DENIED and the assailed Decision of the Court of Appeals is affirmed with modification.

SSS Employee Asso. v CA 175 SCRA 686 (July 28, 1989)

Facts: The petitioners went on strike after the SSS failed to act upon the unions demands concerning the implementation of their CBA. SSS filed before the
court action for damages with prayer for writ of preliminary injunction against petitioners for staging an illegal strike. The court issued a temporary
restraining order pending the resolution of the application for preliminary injunction while petitioners filed a motion to dismiss alleging the courts lack of
jurisdiction over the subject matter. Petitioners contend that the court made reversible error in taking cognizance on the subject matter since the
jurisdiction lies on the DOLE or the National Labor Relations Commission as the case involves a labor dispute. The SSS contends on one hand that the
petitioners are covered by the Civil Service laws, rules and regulation thus have no right to strike. They are not covered by the NLRC or DOLE therefore the
court may enjoin the petitioners from striking.

Issue: Whether or not SSS employers have the right to strike

Whether or not the CA erred in taking jurisdiction over the subject matter.

Held: The Constitutional provisions enshrined on Human Rights and Social Justice provides guarantee among workers with the right to organize and
conduct peaceful concerted activities such as strikes. On one hand, Section 14 of E.O No. 180 provides that the Civil Service law and rules governing
concerted activities and strikes in the government service shall be observed,
subject to any legislation that may be enacted by Congress referring to Memorandum Circular No. 6, s. 1987 of the Civil Service Commission which states
that prior to the enactment by Congress of applicable laws concerning strike by government employees enjoins under pain of administrative sanctions, all
government officers and employees from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which will result in
temporary stoppage or disruption of public service. Therefore in the absence of any legislation allowing govt. employees to strike they are prohibited from
doing so.

In Sec. 1 of E.O. No. 180 the employees in the civil service are denominated as government employees and that the SSS is one such government-
controlled corporation with an original charter, having been created under R.A. No. 1161, its employees are part of the civil service and are covered by the
Civil Service Commissions memorandum prohibiting strikes.

Neither the DOLE nor the NLRC has jurisdiction over the subject matter but instead it is the Public Sector Labor-Management Council which is not granted
by law authority to issue writ of injunction in labor disputes within its jurisdiction thus the resort of SSS before the general court for the issuance of a writ
of injunction to enjoin the strike is appropriate.

G.R. No. 85985 August 13, 1993

PHILIPPINE AIRLINES, INC. (PAL) vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA and PHILIPPINE AIRLINES
EMPLOYEES ASSOCIATION (PALEA)
FACTS:
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The Code was circulated among the employees and
was immediately implemented, and some employees were forthwith subjected to the disciplinary measures embodied therein.
on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint before the National Labor Relations Commission (NLRC) for
unfair labor practice with the following remarks: ULP with arbitrary implementation of PALs Code of Discipline without notice and prior discussion with
Union by Management. In its position paper, PALEA contended that PAL, by its unilateral implementation of the Code, was guilty of unfair labor practice,
specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code. PALEA alleged that copies of the Code had been circulated in limited
numbers; that being penal in nature the Code must conform with the requirements of sufficient publication, and that the Code was arbitrary, oppressive,
and prejudicial to the rights of the employees. It prayed that implementation of the Code be held in abeyance; that PAL should discuss the substance of the
Code with PALEA; that employees dismissed under the Code be reinstated and their cases subjected to further hearing; and that PAL be declared guilty of
unfair labor practice and be ordered to pay damages.
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe rules and regulations regarding employess conduct in
carrying out their duties and functions, and alleging that by implementing the Code, it had not violated the collective bargaining agreement (CBA) or any
provision of the Labor Code.
Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed to appear at the scheduled date. Interpreting such
failure as a waiver of the parties right to present evidence, the labor arbiter considered the case submitted for decision. On November 7, 1986, a decision
was rendered finding no bad faith on the part of PAL in adopting the Code and ruling that no unfair labor practice had been committed. However, the
arbiter held that PAL was not totally fault free considering that while the issuance of rules and regulations governing the conduct of employees is a
legitimate management prerogative such rules and regulations must meet the test of reasonableness, propriety and fairness.
PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner Encarnacion, with Presiding Commissioner Bonto-Perez and
Commissioner Maglaya concurring, found no evidence of unfair labor practice committed by PAL and affirmed the dismissal of PALEAs charge.
PAL then filed the instant petition for certiorari charging public respondents with grave abuse of discretion
ISSUE:
whether management may be compelled to share with the union or its employees its prerogative of formulating a code of discipline.
HELD:
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Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the Labor Code, that the law explicitly
considered it a State policy (t)o ensure the participation of workers in decision and policy-making processes affecting the rights, duties and welfare.
However, even in the absence of said clear provision of law, the exercise of management prerogatives was never considered boundless.
San Miguel Brewery vs Ople: So long as a companys management prerogatives are exercised in good faith for the advancement of the employers interest
and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold
them.
UST vs NLRC: All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by limitations found in law, a
collective bargaining agreement, or the general principles of fair play and justice.
a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In
treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. PAL asserts that all its
employees have been furnished copies of the Code. Public respondents found to the contrary, which finding, to say the least is entitled to great respect.
the collective bargaining agreement may not be interpreted as cession of employees rights to participate in the deliberation of matters which may affect
their rights and the formulation of policies relative thereto. And one such mater is the formulation of a code of discipline.
industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. Thus, even before
Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the State, (d) To promote the
enlightenment of workers concerning their rights and obligations . . . as employees. This was, of course, amplified by Republic Act No 6715 when it
decreed the participation of workers in decision and policy making processes affecting their rights, duties and welfare. PALs position that it cannot be
saddled with the obligation of sharing management prerogatives as during the formulation of the Code, Republic Act No. 6715 had not yet been enacted
(Petitioners Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such obligation was not yet founded in law when the Code was
formulated, the attainment of a harmonious labor-management relationship and the then already existing state policy of enlightening workers concerning
their rights as employees demand no less than the observance of transparency in managerial moves affecting employees rights.

Victorias Milling Co. Inc. v. Social Security Commission [G.R. No. L-16704. March 17, 1962]

FACTS
The Social Security Commission issued its Circular No. 22 of the following tenor:
Effective November 1, 1958, all Employers in computing the premiums due the System, will take into consideration and include in the Employees
remuneration all bonuses and overtime pay, as well as the cash value of other media of remuneration. All these will comprise the Employees remuneration
or earnings, upon which the 3-1/2% and 2-1/2% contributions will be based, up to a maximum of P500 for any one month.
Upon receipt of a copy thereof, petitioner Victorias Milling Company, Inc., through counsel, wrote the Social Security Commission in effect protesting
against the circular as contradictory to a previous Circular No. 7, expressly excluding overtime pay and bonus in the computation of the employers and
employees respective monthly premium contributions, and submitting, In order to assist your System in arriving at a proper interpretation of the term
compensation for the purposes of such computation, their observations on Republic Act 1161 and its amendment and on the general interpretation of
the words compensation, remuneration and wages. Counsel further questioned the validity of the circular for lack of authority on the part of the
Social Security Commission to promulgate it without the approval of the President and for lack of publication in the Official Gazette.

ISSUE
Whether or not Circular No. 22 is a rule or regulation as contemplated in Section 4(a) of Republic Act 1161 empowering the Social Security Commission to
adopt, amend and repeal subject to the approval of the President such rules and regulations as may be necessary to carry out the provisions and purposes
of this Act.

RULING
No. The Commissions Circular No. 22 is not a rule or regulation that needed the approval of the President and publication in the Official Gazette to be
effective, but a mere administrative interpretation of the statute, a mere statement of general policy or opinion as to how the law should be construed.
The Circular purports merely to advise employers-members of the System of what, in the light of the amendment of the law, they should include in
determining the monthly compensation of their employees upon which the social security contributions should be based. The Circular neither needs
approval from the President nor publication in the Official Gazette.

FREEDOM FROM DEBT COALITION vs. ERC

G.R. 161113, August 9, 2005

Facts: Section 34 of RA 9136 (EPIRA), imposes Universal Charge upon end-users of electricity, a charge imposed for the recovery of stranded cost. ERC
issued its Implementing Rules and Regulations defining Universal Charge refers to the charge, if any, imposed for the recovery of Stranded Debts,
Stranded Contract Costs of NPC and Stranded Contract Costs of Eligible Contracts of Distribution Utilities and other purposes pursuant to Section 34 of
the EPIRA. National Power Corporation-Strategic Power Utilities Group (NPC-SPUG) filed with Energy Regulatory Commission (ERC) a petition for the
availment from the Universal Charge of its share for Missionary Electrification. The ERC decided the NPCs petition authorizing it to draw up to P70, 000,
000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject to the availability of funds for the Environmental Fund component of the
Universal Charge. On the basis of the said ERC decisions, Panay Electric Company, Inc. (PECO) charged Romeo P. Gerochi and all other end-users with the
Universal Charge as reflected in their respective electric bills starting from the month of July 2003. Petitioners submit that the assailed provision of law and
its IRR which sought to implement the same are unconstitutional on the following grounds: 1. The universal charge provided for under Section 34 of the
EPIRA and sought to be implemented under Sec. 2, Rule 18 of the IRR of the said law is a tax which is to be collected from all electric end-users and self-
generating entities. The power to tax is strictly a legislative function and as such, the delegation of said power to any executive or administrative agency
like the ERC is unconstitutional, giving the same unlimited authority. The assailed provision clearly provides that the Universal Charge is to be determined,
fixed and approved by the ERC, hence leaving to the latter complete discretionary legislative authority;2. The ERC is also empowered to approve and
determine where the funds collected should be used; 3. The imposition of the Universal Charge on all end-users is oppressive and confiscatory and
amounts to taxation without representation as the consumers were not given a chance to be heard and represented.

Issue: Whether or not there is undue delegation of legislative power to tax on the part of the ERC.

Held: No, there is no undue delegation of powers to the ERC. The EPIRA is complete in all its essential terms and conditions, and it contains sufficient
standards. Although Sec. 34 of the EPIRA merely provides that within one (1) year from the effectivity thereof, a Universal Charge to be determined, fixed
and approved by the ERC, shall be imposed on all electricity end-users, and therefore, does not state the specific amount to be paid as Universal Charge,
the amount nevertheless is made certain by the legislative parameters provided by the law itself when it provided for the promulgation and enforcement
of a National Grid Code, and a Distribution Code. In making his recommendation to the President on the existence of either of the two conditions, the
Secretary of Finance is not acting as the alter ego of the President or even her subordinate. In such instance, he is not subject to the power of control and
direction of the President. He is acting as the agent of the legislative department, to determine and declare the event upon which its expressed will is to
take effect. The Secretary becomes the means or tool by which legislative policy is determined and implemented, considering that he possesses all the

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facilities to gather data and information and has a much broader perspective to properly evaluate them. His personality in such instance is in reality but a
projection of that of Congress. Thus, being the agent of Congress and not of the President, the President cannot alter or modify or nullify, or set aside the
findings of the Secretary and to substitute the judgment of the former for that of the latter. Congress simply granted the Secretary the authority to
ascertain the existence of a fact. If it is exists, the Secretary, by legislative mandate, must submit such information to the President who must impose the
12% VAT rate. There is no undue delegation of legislation power but only of the discretion as to the execution of a law.

KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA vs. CA and COCA-COLA BOTTLERS PHILS.,

FACTS:

June 1998, the Contract Bargaining Agreement for the years 1995-1998 executed between petitioner union and private respondent company
expired.
Petitioner then submitted its demands to the company for another round of collective bargaining negotiations.
After having some labor disputes, on 26 December 1998, both parties executed and signed a MOA providing for salary increases and other
economic and non-economic benefits.
It likewise contained a provision for the regularization of contractual, casual and/or agency workers who have been working with private
respondent for more than one year.
Pursuant to the provisions of the MOA, both parties identified 64 vacant regular positions that may be occupied by the existing casual,
contractual or agency employees who have been in the company for more than one year.
Then, 61 employees passed the screening and extended regular employment status.
Consequently, petitioners demanded the payment of salary and other benefits to the newly regularized employees retroactive to 1 December
1998, in accord with the MOA.
However, the private respondent refused to yield the said demands contending that the date of effectivity of the regularization of said
employees were 1 May 1999 and 1 October 1999.
Thus, petitioner filed a complaint before the NLRC for the alleged violations of the subject MOA by the private respondent.
On 9 December 1999, private respondent closed its Manila and Antipolo plants.
NLRC dismissed the complaint. It stated that: Under MOA, the 61 regularized employees are not entitled to their claims only the employees who
were regular in July 1998 and continued being such upon the signing of the MOA on December 26, 1998 deserve retroactive payment. Since the
61 regularized employees were regularized only on May 1, 1999 and October 1, 1999, they have no right to claim entitlement to the MOA
benefits.

ISSUE:
WON CCBP violated the terms and conditions contained in the MOA dated 26 December 1998 when it did not recognize the regularization of the 61
employees as effective on 1 December 1998?

RULING:
Private respondent violated the provision of the MOA when it did not consider the regularization of the 61 employees effective 1 December 1998, and
accorded to them the full benefits of the MOA.

According to the pertinent provision of the MOA:

1. Non-regular employee (casual, contractual or agency worker) who has already served the company and is presently occupying or has occupied the
position to be filled-up for at least one (1) year shall be given priority in filling-up the position by converting his non-regular employment status to regular
employment status, effective 01 December 1998 without need of undergoing through the companys regular recruitment procedures such as interview and
qualifying examination.

It is erroneous for the NLRC to conclude that the regularization of the 61 employees does not retroact to December 1, 1998.

We hold that the effectivity date of the regularization of the 61 employees was on December 1, 1998.

As stated in the MOA, only those who have worked with the company for one year as of 1 December 1998 and are still working for the company as of the
signing of the MOA, will be considered for regularization.

Evidently, it is erroneous for the NLRC to conclude that extending to them the benefits of the MOA would violate the principle of "no-work-no-pay" as they
are actually rendering service to the company even before December 1, 1998, and continued to do so. They were accorded the status of regular employees
because they were rendering service to the company for the required period.

Hence, even without the subject MOA provision, the 61 employees must be extended regular employment status after the lapse of one year. All those who
have been with the company for one year by said date must automatically be considered regular employees by operation of law.

Barayoga v ASSETS

FACTS: Petitioner Bisudeco-Philsucor Corfarm Workers Union is composed of workers of Bicolandia Sugar Development Corporation (BISUDECO), a sugar
plantation mill located in Camarines Sur. Respondent Asset Privatization Trust (APT), a public trust was created under Proclamation No. 50, mandated to
conserve, provisionally manage and dispose of non-performing assets of the Philippine government identified for privatization or disposition. Thus,
pursuant to Proclamation No. 50, then President Corazon Aquino issued Administrative Order No. 14, where the financial claim of the Philippine
National Bank against BISUDECO in the form of a loan secured by a chattel, was transferred to APT as a trustee of the government. Sometime later,
Philippine Sugar Corporation (Philsucor) took over the management of the sugar plantation and milling operations. Meanwhile, because of BISUDECOs
continued failure of to pay its outstanding loan with PNB, its mortgaged properties were foreclosed and subsequently sold in a public auction to APT, as the
sole bidder.

The union filed a labor case against BISUDECO-Phisucor for unfair labor practice and illegal dismissal when, the management, conditioned their
re-hiring upon their resignation from the union but, nonetheless employed the services of outsiders under the pakyaw system. Now, the APT's Board of
Trustees sold the plantation to Peafrancia Sugar Mill (Pensumil). The board, however, passed another resolution authorizing the payment of separation
benefits to BISUDECO's employees in the event of the company's privatization. Not included in the Resolution, though, were petitioner-union's members
who had not been recalled to work. Thus, petitioners impleaded respondents APT and Pensumil in the labor case, all respondents interposed the defense
of lack of employer-employee relationship.

5
 The Labor Arbiter and the NLRC thereafter, ordered APT to pay herein complainants. It was ruled that while no employer-employee relationship
existed between members of the petitioner union and APT, at the time of the employees' illegal dismissal, the assets of BISUDECO had been transferred to
the national government through APT. On appeal, the appellate court, under Rule 65 of the Rules of Court, held that the APT liable for petitioners' claims
for unfair labor practice because the petitioners' claims could not be enforced against APT as mortgagee of the foreclosed properties of BISUDECO. Hence,
under Rule 45 of the Rules of Court, petitioner-union's members who were not recalled to work by Philsucor, seek to hold APT liable for their monetary
claims and allegedly illegal dismissal.

ISSUE: Whether APT is liable for the claims of petitioners against their former employer.

HELD: NO. Workers' claims for unpaid wages and monetary benefits cannot be paid outside of a bankruptcy or judicial liquidation proceedings against the
employer. It is settled that the application of Article 110 of the Labor Code1 is contingent upon the institution of those proceedings, during which all
creditors are convened, their claims ascertained and inventoried, and their preferences determined. Assured thereby is an orderly determination of the
preference given to creditors' claims; and preserved in harmony is the legal scheme of classification, concurrence and preference of credits in the Civil
Code, the Insolvency Law, and the Labor Code.

Responsibility for the liabilities of a mortgagor towards its employees cannot be transferred via an auction sale to a purchaser who is also the mortgagee-
creditor of the foreclosed assets and chattels. Clearly, the mortgagee-creditor has no employer-employee relations with the mortgagors workers. The
mortgage constitutes a lien on the determinate properties of the employer-debtor, because it is a specially preferred credit to which the workers
monetary claims is deemed subordinate.

Samahang Mangagawa etc. vs NLRC 295 SCRA 171 (1998)

FACTS:
Petitioner Samahang Manggagawa sa Top Form Manufacturing United Workers of the Philippines (SMTFM) was the certified collective bargaining
representative of all regular rank and file employees of private respondent Top Form Manufacturing Philippines, Inc. On February 27, 1990, the
parties agreed to discuss unresolved economic issues. On the minutes of the meeting, the Union proposed that any future wage increase given by
the government should be implemented by the company across-the-board or non-conditional. Management requested the union to retain this
provision since their sincerity was already proven when the P25.00 wage increase was granted across-the-board. The union decided to defer this
provision, relying on the undertakings made by the officials of the company who negotiated with them and since the company has granted to us
government mandated wage increases on across-the-board basis

On October 15, 1990, the RTWPB-NCR issued Wage Order increasing the salary of the workers. The union requested the implementation of said
wage orders. However, they demanded that the increase be on an across-the-board basis. Private respondent refused to accede to that demand.
Instead, it implemented a scheme of increases purportedly to avoid wage distortion.

The union demanded that it should fulfill its pledge of sincerity to the union by granting an across-the-board wage increases (sic) to all employees
under the wage orders. The union reiterated that it had agreed to retain the old provision of CBA on the strength of private respondents promise
and assurance of an across-the-board salary increase should the government mandate salary increases.

The union filed a complaint with the NCR NLRC alleging that private respondents act of reneging on its undertaking/promise clearly constitutes an
act of unfair labor practice through bargaining in bad faith. It charged private respondent with acts of unfair labor practices or violation of Article
247 of the Labor Code, as amended, specifically bargaining in bad faith, and prayed that it be awarded actual, moral and exemplary damages. The
union added that it was charging private respondent with violation of Article 100 of the Labor Code.

Private respondent contends that there was no agreement to the effect that future wage increases mandated by the government should be
implemented on an across-the-board basis. Otherwise, that agreement would have been incorporated and expressly stipulated in the CBA.

ISSUE: Whether or not private respondent committed an unfair labor practice in its refusal to grant across-the-board wage increase.

HELD:
No. The private respondent did not commit an unfair labor practice in its refusal to grant across-the-board wage increase.

The alleged violation of Article 100 of the Labor Code, as amended, as well as Article XVII, Section 7 of the existing CBA as herein earlier quoted is likewise
found by this Branch to have no basis in fact and in law. No benefits or privileges previously enjoyed by the employees were withdrawn as a result of the
implementation of the subject orders. Likewise, the alleged company practice of implementing wage increases declared by the government on an across-
the-board basis has not been duly established by the complainants evidence. The complainants asserted that the company implemented Republic Act No.
6727 which granted a wage increase of P25.00 effective July 1, 1989 on an across-the-board basis. Granting that the same is true, such isolated single act
that respondents adopted would definitely not ripen into a company practice.

Petitioner union does not deny that discussion on its proposal that all government-mandated salary increases should be on an across-the-board basis was
deferred, purportedly because it relied upon the undertaking of the negotiating panel of private respondent. Neither does petitioner union deny the fact
that there is no provision of the 1990 CBA containing a stipulation that the company will grant across-the-board to its employees the mandated wage
increase. They simply assert that private respondent committed acts of unfair labor practices by virtue of its contractual commitment made during the
collective bargaining process. The mere fact, however, that the proposal in question was not included in the CBA indicates that no contractual commitment
thereon was ever made by private respondent as no agreement had been arrived at by the parties.

Obviously the purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on the parties; but the failure to reach an
agreement after negotiations continued for a reasonable period does not establish a lack of good faith. The statutes invite and contemplate a collective
bargaining contract, but they do not compel one. The duty to bargain does not include the obligation to reach an agreement

HONDA PHILS., INC., petitioner, vs. SAMAHAN NG MALAYANG MANGGAGAWA SA HONDA, respondent.

1 Article 110. Workers preference in case of bankruptcy. In the event of bankruptcy or liquidation of the employers business, his workers shall enjoy
first preference as regards their unpaid wages and other monetary claims shall be paid in full before the claims of the Government and other creditors may
be paid.
6
G.R. No. 145561 June 15, 2005

Facts:
1. The case stems from the Collective Bargaining Agreement (CBA) forged between petitioner Honda and respondent union Samahan ng Malayang
Manggagawa sa Honda (respondent union) wherein
a. The COMPANY shall maintain the present practice in the implementation [of] the 13th month pay.
b. The COMPANY shall grant a 14th Month Pay, computed on the same basis as computation of 13th Month Pay.
c. The COMPANY agrees to continue the practice of granting, in its discretion, financial assistance to covered employees in December of
each year, of not less than 100% of basic pay
2. This CBA is effective until year 2000.
a. In the latter part of 1998, the parties started re-negotiations for the fourth and fifth years of their CBA.
b. When the talks between the parties bogged down, respondent union filed a Notice of Strike on the ground of bargaining deadlock.
Thereafter, Honda filed a Notice of Lockout.
c. Department of Labor and Employment (DOLE) Secretary Laguesma assumed jurisdiction over the labor dispute and ordered the parties
to cease and desist from committing acts that would aggravate the situation.
d. Respondent union filed a second Notice of Strike on the ground of unfair labor practice alleging that Honda illegally contracted out
work to the detriment of the workers. Respondent union went on strike and picketed the premises of Honda
3. DOLE Acting Secretary Felicisimo Joson, Jr. assumed jurisdiction over the case and certified the same to the National Labor Relations Commission
(NLRC) for compulsory arbitration.
a. The striking employees were ordered to return to work and the management accepted them back under the same terms prior to the
strike staged.
4. The management of Honda issued a memorandum announcing its new computation of the 13th and 14th month pay to be granted to all its
employees whereby the thirty-one (31)-day long strike shall be considered unworked days for purposes of computing said benefits.
a. As per the companys new formula, the amount equivalent to 1/12 of the employees basic salary shall be deducted from these
bonuses, with a commitment however that in the event that the strike is declared legal, Honda shall pay the amount deducted.
5. Respondent union opposed the pro-rated computation of the bonuses
6. Voluntary Arbitrator Herminigildo C. Javen: invalidated Hondas computation
a. The Companys implementation of pro-rated 13th Month pay, 14th Month pay and Financial Assistance [is] invalid.
b. The Company is thus ordered to compute each provision in full month basic pay and pay the amounts in question within ten (10) days
after this Decision shall have become final and executory.
7. CA: the petition was dismissed for lack of merit

Issue: WON the pro-rated computation of the 13th month pay and the other bonuses in question is valid and lawful.

Honda wanted to implement a pro-rated computation of the benefits based on the "no work, no pay" rule.

Held: No. We agree with the findings of the arbitrator that the assailed CBA provisions are far from being unequivocal

1. A collective bargaining agreement refers to the negotiated contract between a legitimate labor organization and the employer concerning wages,
hours of work and all other terms and conditions of employment in a bargaining unit.8 As in all contracts, the parties in a CBA may establish such
stipulations, clauses, terms and conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public
order or public policy.
a. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the
express policy of the law.
2. According to the company, the phrase "present practice" as mentioned in the CBA refers to the manner and requisites with respect to the
payment of the bonuses, i.e., 50% to be given in May and the other 50% in December of each year. Respondent union, however, insists that the
CBA provisions relating to the implementation of the 13th month pay necessarily relate to the computation of the same.
a. A cursory reading of the provisions will show that they did not state categorically whether the computation of the 13th month pay,
14th month pay and the financial assistance would be based on one full months basic salary of the employees, or pro-rated based on
the compensation actually received.
b. The arbitrator thus properly resolved the ambiguity in favor of labor as mandated by Article 1702 of the Civil Code.
c. The Court of Appeals affirmed the arbitrators finding and added that the computation of the 13th month pay should be based on the
length of service and not on the actual wage earned by the worker.
3. Factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdiction, are generally
accorded not only respect but even finality, and bind us when supported by substantial evidence. It is not our function to assess and evaluate the
evidence all over again, particularly where the findings of both the arbiter and the Court of Appeals coincide.
4. The "basic salary" of an employee for the purpose of computing the 13th month pay shall include all remunerations or earnings paid by his
employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the
regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime premium, night differential and holiday
pay, and cost-of-living allowances.
5. More importantly, it has not been refuted that Honda has not implemented any pro-rating of the 13th month pay before the instant case.
a. Honda did not adduce evidence to show that the 13th month, 14th month and financial assistance benefits were previously subject to
deductions or pro-rating or that these were dependent upon the companys financial standing
b. The Company (Honda) explicitly accepted that it was the strike held that prompt[ed] them to adopt a pro-rata computation, aside
[from] being in [a] state of rehabilitation due to 227M substantial losses in 1997, 114M in 1998 and 215M lost of sales in 1999 due to
strike. This is an implicit acceptance that prior to the strike, a full month basic pay computation was the "present practice" intended to
be maintained in the CBA.
c. The memorandum dated November 22, 1999 which Honda issued shows that it was the first time a pro-rating scheme was to be
implemented in the company. It was a convenient coincidence for the company that the work stoppage held by the employees lasted
for thirty-one (31) days or exactly one month. This enabled them to devise a formula using 11/12 of the total annual salary as base
amount for computation instead of the entire amount for a 12-month period.
6. That a full month payment of the 13th month pay is the established practice at Honda is further bolstered by the affidavits executed by Feliteo
Bautista and Edgardo Cruzada. Both attested that when they were absent from work due to motorcycle accidents, and after they have exhausted
all their leave credits and were no longer receiving their monthly salary from Honda, they still received the full amount of their 13th month, 14th
month and financial assistance pay.
a. With regard to the length of time the company practice should have been exercised to constitute voluntary employer practice which
cannot be unilaterally withdrawn by the employer, we hold that jurisprudence has not laid down any rule requiring a specific minimum
number of years.

7
 b. Lastly, the foregoing interpretation of law and jurisprudence is more in keeping with the underlying principle for the grant of this
benefit. It is primarily given to alleviate the plight of workers and to help them cope with the exorbitant increases in the cost of living.
To allow the pro-ration of the 13th month pay in this case is to undermine the wisdom behind the law and the mandate that the
workingmans welfare should be the primordial and paramount consideration.

Case Digest: Vergara, Jr. v. Coca-Cola Bottlers

G.R. No. 176985 : April 1, 2013

RICARDO E. VERGARA, JR., Petitioner, v. COCA-COLA BOTTLERS PHILIPPINES, INC., Respondent.

PERALTA,J.:

FACTS:

Petitioner Ricardo E. Vergara, Jr. was an employee of respondent Coca-Cola Bottlers Philippines, Inc. from May 1968 until he retired on January 31, 2002 as
a District Sales Supervisor (DSS) for Las Pis City, Metro Manila. As stipulated in respondents existing Retirement Plan Rules and Regulations at the time, the
Annual Performance Incentive Pay of RSMs, DSSs, and SSSs shall be considered in the computation of retirement benefits.

Claiming his entitlement to an additional PhP474,600.00 as Sales Management Incentives (SMI) and to the amount of PhP496,016.67 which respondent
allegedly deducted illegally, representing the unpaid accounts of two dealers within his jurisdiction, petitioner filed a complaint before the NLRC on June
11, 2002 for the payment of his Full Retirement Benefits, Merit Increase, Commission/Incentives, Length of Service, Actual, Moral and Exemplary Damages,
and Attorneys Fees. Subsequently, they filed their respective Position Paper and Reply thereto dealing on the two remaining issues of SMI entitlement and
illegal deduction.

The LA rendered a Decision in favor of petitioner, directing respondent to reimburse the amount illegally deducted from petitioners retirement package
and to integrate therein his SMI privilege. Upon appeal of respondent, however, the NLRC modified the award and deleted the payment of SMI.

Petitioner then moved to partially execute the reimbursement of illegal deduction, which the LA granted despite respondents opposition. Later, without
prejudice to the pendency of petitioners petition for certiorari before the CA, the parties executed a Compromise Agreementon October 4, 2006, whereby
petitioner acknowledged full payment by respondent of the amount of PhP496,016.67 covering the amount illegally deducted.

The CA dismissed petitioners case on January 9, 2007 and denied his motion for reconsideration thereafter. Hence, this present petition to resolve the
singular issue of whether the SMI should be included in the computation of petitioners retirement benefits on the ground of consistent company practice.
Petitioner insistently avers that many DSSs who retired without achieving the sales and collection targets were given the average SMI in their retirement
package.

ISSUE: Whether or not petitioner is entitled to the payment of SMI

HELD: No. CA decision affirmed.

Labor Law- To be considered as a regular company practice, the employee must prove by substantial evidence that the giving of the benefit is done over a
long period of time, and that it has been made consistently and deliberately.

There is diminution of benefits when the following requisites are present: (1) the grant or benefit is founded on a policy or has ripened into a practice over
a long period of time; (2) the practice is consistent and deliberate; (3) the practice is not due to error in the construction or application of a doubtful or
difficult question of law; and (4) the diminution or discontinuance is done unilaterally by the employer.

To be considered as a regular company practice, the employee must prove by substantial evidence that the giving of the benefit is done over a long period
of time, and that it has been made consistently and deliberately. Jurisprudence has not laid down any hard-and-fast rule as to the length of time that
company practice should have been exercised in order to constitute voluntary employer practice.The common denominator in previously decided cases
appears to be the regularity and deliberateness of the grant of benefits over a significant period of time. It requires an indubitable showing that the
employer agreed to continue giving the benefit knowing fully well that the employees are not covered by any provision of the law or agreement requiring
payment thereof. In sum, the benefit must be characterized by regularity, voluntary and deliberate intent of the employer to grant the benefit over a
considerable period of time.

Upon review of the entire case records, the SC finds no substantial evidence to prove that the grant of SMI to all retired DSSs regardless of whether or not
they qualify to the same had ripened into company practice. Despite more than sufficient opportunity given him while his case was pending before the
NLRC, the CA, and even to this Court, petitioner utterly failed to adduce proof to establish his allegation that SMI has been consistently, deliberately and
voluntarily granted to all retired DSSs without any qualification or conditions whatsoever.

DENIED

Arco Metal Products Co. vs Samahan 554 SCRA 111 (2008)

FACTS:

December 2003, petitioner paid the 13th month pay, bonus, and leave encashment of three union members in amounts proportional to the
service they actually rendered in a year, which is less than a full twelve (12) months.
Respondent protested the prorated scheme, claiming that on several occasions petitioner did not prorate the payment of the same benefits to
seven (7) employees who had not served for the full 12 months. The payments were made in 1992, 1993, 1994, 1996, 1999, 2003, and 2004.
According to respondent, the prorated payment violates the rule against diminution of benefits under Article 100 of the Labor Code. Thus, they
filed a complaint before the National Conciliation and Mediation Board (NCMB).
Petitioner claims that its full payment of benefits regardless of the length of service to the company does not constitute voluntary employer
practice. It points out that the payments had been erroneously made and they occurred in isolated cases in the years 1992, 1993, 1994, 1999,
2002 and 2003. According to petitioner, it was only in 2003 that the accounting department discovered the error when there were already
three (3) employees involved with prolonged absences and the error was corrected by implementing the pro-rata payment of benefits pursuant

8
 to law and their existing CBA. It adds that the seven earlier cases of full payment of benefits went unnoticed considering the proportion of one
employee concerned (per year) vis vis the 170 employees of the company. Petitioner describes the situation as a clear oversight which
should not be taken against it.
The appellate court found that petitioner, however, had an existing voluntary practice of paying the aforesaid benefits in full to its employees,
thereby rejecting the claim that petitioner erred in paying full benefits to its seven employees. The appellate court noted that aside from the
affidavit of petitioners officer, it has not presented any evidence in support of its position that it has no voluntary practice of granting the
contested benefits in full and without regard to the service actually rendered within the year. It also questioned why it took petitioner eleven
(11) years before it was able to discover the alleged error.

ISSUE: Whether or not the full payment of benefits regardless of the length of service to the company does constitute voluntary employer practice.

HELD: It was held that the full payment of benefits regardless of the length of service to the company constituted voluntary employer practice.

Any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued or eliminated by the employer. The principle
of non-diminution of benefits is founded on the Constitutional mandate to "protect the rights of workers and promote their welfare, and to afford
labor full protection. Said mandate in turn is the basis of Article 4 of the Labor Code which states that all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations shall be rendered in favor of labor.

In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely, voluntarily and consistently granting full benefits to its
employees regardless of the length of service rendered. True, there were only a total of seven employees who benefited from such a practice, but it
was an established practice nonetheless. Jurisprudence has not laid down any rule specifying a minimum number of years within which a company
practice must be exercised in order to constitute voluntary company practice. Thus, it can be six (6) years, three (3) years, or even as short as two (2)
years. Petitioner cannot shirk away from its responsibility by merely claiming that it was a mistake or an error, supported only by an affidavit of its
manufacturing group.

If petitioner wants to prove that it merely erred in giving full benefits, it could have easily presented other proofs, such as the names of other
employees who did not fully serve for one year and thus were given prorated benefits. This could have easily bolstered petitioners theory of
mistake/error, but sadly, no evidence to that effect was presented.

2. SEVILLA TRADING COMPANY, Petitioner, vs. A.V.A. TOMAS E. SEMANA, SEVILLA TRADING WORKERS UNIONSUPER, Respondents.
G.R. No. 152456 : April 28, 2004
FACTS:

On appeal is the Decision of the Court of Appeals (CA) sustaining the sustaining the Decision of Accredited Voluntary Arbitrator Tomas E. Semana.

For two to three years prior to 1999, petitioner Sevilla Trading Company (Petitioner), a domestic corporation engaged in trading business,
organized and existing under Philippine laws, added to the base figure, in its computation of the 13th-month pay of its employees, the amount of other
benefits received by the employees which are beyond the basic pay.

Petitioner claimed that it entrusted the preparation of the payroll to its office staff, including the computation and payment of the 13th-month
pay and other benefits.When it changed its person in charge of the payroll in the process of computerizing its payroll, and after audit was conducted, it
allegedly discovered the error of including non-basic pay or other benefits in the base figure used in the computation of the 13th-month pay of its
employees.It cited the Rules and Regulations Implementing P.D. No. 851 which stated:

Basic salary shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include
cost-of-living allowances granted pursuant to P.D. No. 525 or Letter of Instruction No. 174, profit-sharing payments, and all allowances and
monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation
of the Decree on December 16, 1975.

Petitioner then effected a change in the computation of the thirteenth month pay, as follows:

13th-month pay = net basic pay

Hence, the new computation reduced the employees thirteenth month pay.The daily piece-rate workers represented by private respondent
Sevilla Trading Workers Union SUPER (Union, for short), a duly organized and registered union, through the Grievance Machinery in their Collective
Bargaining Agreement, contested the new computation and reduction of their thirteenth month pay.The parties failed to resolve the issue.

The Union alleged that petitioner violated the rule prohibiting the elimination or diminution of employees benefits as provided for in Art. 100 of
the Labor Code, as amended.They claimed that paid leaves, like sick leave, vacation leave, paternity leave, union leave, bereavement leave, holiday pay and
other leaves with pay in the CBA should be included in the base figure in the computation of their 13th-month pay.

ISSUE:

WONa voluntary act of the employerwhich was favorable to the employees though not conforming to law, has ripened into a practice and therefore can be
withdrawn, reduced, diminished, discontinued or eliminated?

HELD:

NO. As such the SC affirms the decision of the Accredited Voluntary Arbitrator Tomas E. Semana granting to pay corresponding back wages to all covered
and entitled employees arising from the exclusion of said benefits in the computation of 13th-month pay.

RATIO DECIDENDI:

9
With regard to the length of time the company practice should have been exercised to constitute voluntary employer practice which cannot be unilaterally
withdrawn by the employer, we hold that jurisprudence has not laid down any rule requiring a specific minimum number of years. In the above quoted
case of Davao Fruits Corporation vs. Associated Labor Unions, the company practice lasted for six (6) years. In another case, Davao Integrated Port
Stevedoring Services vs. Abarquez, the employer, for three (3) years and nine (9) months, approved the commutation to cash of the unenjoyed portion of
the sick leave with pay benefits of its intermittent workers. While in Tiangco vs. Leogardo, Jr. the employer carried on the practice of giving a fixed monthly
emergency allowance from November 1976 to February 1980, or three (3) years and four (4) months. In all these cases, this Court held that the grant of
these benefits has ripened into company practice or policy which cannot be peremptorily withdrawn. In the case at bar, petitioner Sevilla Trading kept
the practice of including non-basic benefits such as paid leaves for unused sick leave and vacation leave in the computation of their 13th-month pay for at
least two (2) years. This, we rule likewise constitutes voluntary employer practice which cannot be unilaterally withdrawn by the employer without
violating Art. 100 of the Labor Code.

Suico vs NLRC 513 SCRA 375 (2007)

FACTS:
Culver B. Suico, Teresa D. Ceniza, Ronald R. Dacut (complainants were regular employees of Philippine Long Distance Telephone Company (PLDT)
Cebu Jones Exchange and members of Manggagawa ng Komunikasyon ng Pilipinas (MKP).
September 1997, MKP launched a strike against PLDT. Complainants participated in the strike by picketing the PLDT.
PLDT sent 2 notice to explanation to Suico et.al, for the acts of violation that happen during the strike. But the complainant failed to provide the
required written explanation the acts charged to them. They replied informing, that they opt to exercise their rights to due process and request
to furnish a copy of the formal written complaint complaint filed them, statement of witness/es and preliminary investigations and/or report/s
conducted on the aforesaid incident, if any.
PLDT findings based on the available evidence found the complainants guilty and were subsequently terminated
Suico et.al filed a complaint for illegal dismissal and damages.
It is the view of PLDT that in the dismissal of employees for strike-related violence, it is sufficient to merely declare the latter to have lost their
employment without having to comply with any procedure for their termination. PLDT, refused to implement said policy, contending that it
applies to administrative cases only and not to strike-related cases such as the ones involving Suico, et al.

ISSUE: Whether PLDT violated the requirements of due process under the Labor Code when it dismissed said employees without heeding their request for
the conduct of a formal hearing as provided for under PLDT Systems Practice No. 94-016 and prior to submission of their respective answers to the charges
against them.

HELD: The procedure adopted by PLDT in dismissing Suico, et al. fell short of the requirements of due process.

The requirements of due process by which to test the validity of the procedure adopted by PLDT in dismissing Suico, et al. are those embodied in Art. 277
(b) of the Labor Code, Rule XXII of the Implementing Rules of Book V and Systems Practice No. 94-016.

PLDT complied with the two-notice requirement of due process. The first notices sent to Suico, et al. set out in detail the nature and circumstances of the
violations imputed to them, required them to explain their side and expressly warned them of the possibility of their dismissal should their explanation be
found wanting. The last notices informed Suico, et al. of the decision to terminate their employment and cited the evidence upon which the decision was
based.68 These two notices would have sufficed had it not been for the existence of Systems Practice No. 94-016. Under Systems Practice No. 94-016, PLDT
granted its employee the alternative of either filing a written answer to the charges or requesting for opportunity to be heard and defend himself with the
assistance of his counsel or union representative, if he so desires.

Suico, et al. exercised their option under Systems Practice No. 94-016 by requesting that a formal hearing be conducted and that they be given copies of
sworn statements and other pertinent documents to enable them to prepare for the hearing. 69 This option is part of their right to due process. PLDT is
bound to comply with the Systems Practice.

Company policies or practices are binding on the parties.60 Some can ripen into an obligation on the part of the employer,61 such as those which confer
benefits on employees 62 or regulate the procedures and requirements for their termination

Art. 277 (b) in relation to Art. 264 (a)55 and (e)56 recognizes the right to due process of all workers, without distinction as to the cause of their termination. 57
Where no distinction is given, none is construed.58 Hence, the foregoing standards of due process apply to the termination of employment of Suico, et al.
even if the cause therefor was their supposed involvement in strike-related violence prohibited under Art. 264 (a) and (e).

Moreover, the procedure for termination prescribed under Art. 277(b) and Rule XXII of the Implementing Rules of Book V is supplemented by existing
company policy. Art. 277(b) provides that the procedure for termination prescribed therein is without prejudice to the adoption by the employer of
company policy on the matter, provided this conforms with the guidelines set by the DOLE such as Rule XXII of the Implementing Rules of Book V. This is
consistent with the established principle that employers are allowed, under the broad concept of management prerogative, to adopt company policies that
regulate all aspects of personnel administration including the dismissal and recall of workers.

MANEJA VS NLRC 290 SCRA 603 (1998)

FACTS: Petitioner Rosario Maneja worked with private respondent Manila Midtown Hotel beginning January 1985, as a telephone operator. She was a
member of the National Union of Workers in Hotels, Restaurants and Allied Industries (NUWHRAIN) with an existing CBA with the private respondent.

In February 13, 1990, a fellow telephone operator, Rowena Loleng, received a request for long distance call (RLDC) form and a deposit for P500.00 from a
Japanese guest but the call was unanswered. The deposit was then forwarded to the cashier. The same evening, the Japanese guest again made an RLDC
and deposited another P500.00 but the call was also unanswered. Loleng passed the RLDC to Maneja for follow up.

ON February 15, the cashier inquired about the P1000 deposit made. After a search, the first one was found in the guest folio while the other in the folder
for cancelled calls. Petitioner Maneja saw that the 2 nd RLDC form was not time stamped so she placed it in the machine to stamp it with the date February
15. But after realizing that the call was made 2 days before, she changed the date to February 13.

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On March 7, the chief telephone operator asked the petitioner and Loleng to explain the Feb 15 incident. Both submitted their written explanation. On
March 20, a written report was submitted, stating that their actions were covered violations of the Offenses Subject to Disciplinary Action (OSDA) as
1. Forging, falsifying official documents and;
2. Culpable carelessnessnegligence or failure to follow specific instruction/s or established procedure/s
On March 23, petitioner was then served notice of dismissal effective on April 1. She refused to sign and wrote under protest.

On October 2, 1990, Maneja filed a complaint for illegal dismissal against private respondent before the labor arbiter (LA). LA found that the petitioner was
illegally dismissed, stating that even though the case revolves on the matter of implementation and interpretation of company policies and is thus within
the jurisdiction of the grievance procedure under the CBA, Art. 217 Labor Code confers original and exclusive jurisdiction of all termination cases to LA.
NLRC dismissed the case for lack of jurisdiction of LA because the case was subject to voluntary arbitration.

Petitioner insists that her termination is not an unresolved grievance as there had been no grievance meeting between the union and the management.
Petitioner alleged that it has been a company policy that termination cases are not referred to the grievance machinery but directly to LA.

ISSUE: W/N THE LABOR ARBITER HAD JURISDICTION TO DECIDE THE CASE

HELD: NLRCs interpretation of Art 216c Labor Code is erroneous. Even though such provision provides that LA have no jurisdiction over cases arising from
interpretation and implementation of CBAs (must be submitted to the grievance machine or voluntary arbitration), it must be read in conjunction with Art
261 which grants voluntary arbitrators original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies which is not the case here.

According to the Sanyo case, there is dismissal which does not involve an interpretation or implementation of a CBA or interpretation or enforcement of
company personnel policies but involves termination. Where the dispute is just in the interpretation, implementation or enforcement stage, it may be
referred to the grievance machinery set up in the CBA or by voluntary arbitration. Where the was already actual termination, i.e. violation of rights, it is
already cognizable by LA.

Moreover, Art 260 also stipulates that only disputes involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators. In the case at bar, the union does not event come into the picture as the practice in said Hotel in cases of termination is that they are not
referred anymore to the grievance comitte and that the terminated employee who wishes to question the legality of his termination usually goes to LA for
arbitration, whether the termination arose from the interpretation or enforcement of the company personnel policies or otherwise.

Petitioner was illegally dismissed as there are two requisites in a valid dismissal: 1. That the dismissal must be for any causes expressed in Art 282 Labor
Code and; 2. The employee must be given an opportunity to be heard and to defend himself.
1. There is no cause for dismissal as the petitioners actions were not contrary to company practice and there is also no basis for personal
appropriation based on the facts
2. An examination of the record reveals that no hearing whatsoever was ever conducted by the Hotel before Maneja was dismissed. While it may
be true that the petitioner submitted a written explanation, no hearing was actually conducted before she was terminated. She was not
accorded the opportunity to fully defend herself which is clearly a violation of her right to due process.

Maneja vs. NLRC

G.R. 124013 June 5, 1998

Topic: Company Policies as an informal source of labor law

Facts: Maneja (employee) worked for Manila Midtown Hotel(MMH) (employer) as a telephone operator. Maneja was dismissed by MMH due to violation
of their company policy on culpable negligence negligence or failure to follow specific instruction(s) or established procedure(s). Maneja filed a complaint
for illegal dismissal against MMH. Labor Arbiter Oswald Lorenzo ruled in favor of Maneja. Lorenzo noted that on the face of the complaint, the issue
revolves around the implementation and interpretation of existing company policies, and as such it is within the jurisdiction of the grievance procedure
under the CBA between MMH and NUWRAIN (the Union in which Maneja is a member), but he still assumed jurisdiction over the case since termination
cases is within his jurisdiction.

Issue: Does the Labor Arbiter have jurisdiction over the case?

Ruling: Yes. Since there has been an actual termination, the matter falls within the jurisdiction of the Labor Arbiter. The dismissal of Maneja does not call
for the interpretation or enforcement of company personnel policies but is a termination dispute which comes under the jurisdiction of the Labor Arbiter.

It should be explained that company personnel policies are guiding principles stated in broad, long-range terms express the philosophy or beliefs of an
organizations top authority regarding personnel matters. They deal with matters affecting efficiency and well-being of employees and include, among
others, the procedure in the administration of wages, benefits, promotions, transfer and other personnel movements which are usually not spelled out in
the collective agreement. The usual source of grievances, however, are the rules and regulations governing disciplinary actions.

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