1
VII. PRESCRIPTION OF CLAIMS
A. CLAIM FOR ILLEGAL DISMISSAL
B. MONEY CLAIMS
185 INC SHIPMANAGEMENT, INC., CAPTAIN
SIGFREDO E. MONTERROYO AND/OR
INTERORIENT NAVIGATION LIMITED,
Petitioners, v. ALEXANDER L. MORADAS,
Respondent.
FACTS:
Alexander L. Moradas (respondent) was
employed as wiper for the vessel MV
Commander (vessel) by petitioner INC
Shipmanagement, Inc., for a period of 10 months.
On October 13, 2000, respondent
claimed that while he was disposing of the
garbage in the incinerator room of the vessel,
certain chemicals splashed all over his body
because of an explosion. He was sent to the
hospital. The attending physician of St. Luke's
Medical Center, Dr. Alegre, reported that the
respondents thermal burns were estimated to
fully heal within a period of 3 to 4 months.
Respondent demanded for the payment of his full
disability benefits under the Philippine Overseas
Employment Agency Standard Employment
Contract (POEA-SEC), in the amount of
US$60,000.00, which petitioners refused to heed.
The petitioners denied respondent's
claims, contending his injury was self-inflicted.
They denied that the incinerator exploded and
claimed that respondent burned himself by
pouring paint thinner on his overalls and
thereafter set himself on fire. They averred that
he was led to commit such act after he was
caught stealing the vessels supplies. They also
alleged that there was a flooding incident caused
by the respondent. All allegations were supported
by affidavits and statements executed by vessel
officers and crew members. In addition, Antonio
Gile (Gile), attested that he saw respondent go to
the paint room and there soak his hands in a can
full of thinner.
The Labor Arbiter ruled in favor or
petitioners, dismissing respondents complaint for
lack of merit. The Labor Arbiter also held that
respondent's injury was self-inflicted and that no
incinerator explosion occurred that would have
caused the latter's injuries.
The National Labor Relations
Commission (NLRC) sustained the findings of the
Labor Arbiter. It pointed out that respondents
mental or physical fitness was not at issue since
respondent was motivated to inflict injury to
himself for reasons related to his impending
discharge and not because of his disposition. The
NLRC denied the motion for reconsideration filed
by the respondent.
The CA rendered a decision holding that
grave abuse of discretion tainted the NLRC
ruling. It found that it was contrary to human
nature and experience for respondent to burn
himself. It also pointed out that no evidence was
presented to show that respondent had no
business near the engine room. The CA denied
the motion for reconsideration filed by the
petitioners.
ISSUE:
Did the CA err in finding that the
NLRC gravely abused its discretion when it
denied respondent's claim for disability
benefits?
HELD:
The prevailing rule under Section 20(B)
of the 1996 POEA-SEC on compensation and
benefits for injury or illness was that an employer
shall be liable for the injury or illness suffered by
a seafarer during the term of his contract. There
was no need to show that such injury was work-
related except that it must be proven to have

been contracted during the term of the contract.
The rule, however, is not absolute and the
employer may be exempt from liability if he can
successfully prove that the cause of the
seaman's injury was directly attributable to his
deliberate or willful act as provided under Section
20 (D) thereof, to wit: D. No compensation shall
be payable in respect of any injury, incapacity,
disability or death of the seafarer resulting from
his willful or criminal act, provided however, that
the employer can prove that such injury,
incapacity, disability or death is directly
attributable to seafarer.
Records show that the LA and NLRC
gave credence to the corroborating testimonies of
the crewmen pointing to respondent as the
person who deliberately caused the flooding
incident. In particular, respondent was seen
alone in the vicinity of the portside sea chest
which cover was found to have been intentionally
removed and thereby caused the flooding.
The purported explosion in the
incinerator was belied by Gile who also claimed
that there was no fire in the incinerator room at
the time respondent got burned. This was
corroborated by Bejada who testified having
ordered an ordinary seaman that was burning
deck waste in the incinerator early that day to
extinguish the fire with water and close up the
incinerator door because of bad weather
conditions. Accordingly, an inspection of the
incinerator after the incident showed that there
were unburnt cardboard cartons found inside with
no sign of explosion and the steel plates
surrounding it were cool to the touch.
Both the LA and the NLRC made a
factual finding that prior to the burning incident,
respondent was caught pilfering the vessels
supplies for which he was told that he was to be
relieved from his duties. This adequately
supports the reasonable conclusion that
respondent may have harbored a grudge against
the captain and the chief steward who denied
2
giving him the questioned items. At the very
least, it was natural for him to brood over feelings
of resentment considering his impending
dismissal. These incidents shore up the theory
that he was motivated to commit an act of
sabotage which, however, backfired into his own
burning.
GRANTED
186 ALPHA SHIP MANAGEMENT
CORPORATION/JUNEL M CHAN and/or
CHUO-KAIUN COMPANY, LIMITED v.
ELEOSIS v.
FACTS:
Respondent Calo worked for petitioners
Alpha Ship, Junel M. Chan and their foreign
principal, (CKCL) under 7 employment contracts.
While MV Iris was in China, respondent suffered
back pain on the lower part of his lumbar region
and urinated with solid particles. On checkup, the
doctor found him suffering from urinary tract
infection and renal colic, and was given
antibiotics. When respondent’s condition did not
improve, he consulted another doctor in Chile
and was found to have kidney problems and
urinary tract infection but was declared fit for
work on a "light duty" basis. In Japan, respondent
was diagnosed with suspected renal and/or
ureter calculus and was declared "unfit for work”.
Dr. Cruz, the company-designated physician who
continously examined respondent from 2004-
2005 declared that respondent is now “fit to work”
as seaferer. Respondent, who felt that his
condition has not improved – consulted another
specialist in internal medicine, Dr. Vicaldo, who
issued the following diagnosis: that it was
Impediment Grade X, that he is now unfit to
resume work as seaman in any capacity and that
his illness is considered work aggravated/related.
Respondent filed a claim for disability benefits
with petitioners, but the claim was denied. LA:

granted permanent total disability benefits and
attorney’s fees to respondent, but denied his
claim for moral and exemplary damages. NLRC:
Appeal is granted. The decision of the Labor
Arbiter was vacated and set aside. The complaint
for dismissed for lack of merit. CA: NLRC
decision was reversed. Decision of the Labor
Arbiter was reinstated.
ISSUE:
Whether respondent’s claim for disability
benefits should prosper. SC
RULING:
YES. An employee’s disability becomes
permanent and total when so declared by the
company-designated physician, or, in case of
absence of such a declaration either of fitness or
permanent total disability, upon the lapse of the
120 or 240-day treatment period, while the
employee’s disability continues and he is unable
to engage in gainful employment during such
period, and the company-designated physician
fails to arrive at a definite assessment of the
employee’s fitness or disability. This is true
"regardless of whether the employee loses the
use of any part of his body." Respondent was
repatriated on October 12, 2004 and underwent
treatment by the company-designated physician,
Dr. Cruz, until October 14, 2005, or for a
continuous period of over one year – or for more
than the statutory 120-day or even 240-day
period. During said treatment period, Dr. Cruz did
not arrive at a definite assessment of
respondent’s fitness or disability; thus,
respondent’s medical condition remained
unresolved. It was only on July 18, 2006 that
respondent was declared fit to work by Dr. Cruz.
Such declaration, however, became irrelevant,
for by then, respondent had been under medical
treatment and unable to engage in gainful
employment for more than 240 days. Pursuant to
the doctrine in Kestrel, the conclusive
3
presumption that the respondent is totally and
permanently disabled thus arose. In the same
manner, the issue of which among the two
diagnoses or opinions should prevail – that of Dr.
Cruz or Dr. Vicaldo – is rendered irrelevant in
view of the lapse of the said 240-day period. As
far as the parties are concerned, respondent’s
medical treatment and disability continued for
more than 240 days without any finding or
diagnosis by the company-designated physician
that he was fit to resume work. Thus, consonant
with law and jurisprudence, respondent is entitled
to a declaration of permanent total disability, as
well as the corresponding benefit attached
thereto in the amount of US$60,000.00.
C. CLAIM FOR ILLEGAL DISMISSAL WITH
MONEY CLAIMS
D. UNFAIR LABOR PRACTICE
187Social Security System vs. Efren Capada, et
al., G.R. No. 168501, January 31, 2011.
Collection of accrued wages; two-fold test.
After the Labor Arbiter’s 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 two-fold test in
determining whether an employee is barred from
recovering his accrued wages requires that — (1)
there must be actual delay or that the order of
reinstatement pending appeal was not executed
prior to its reversal; and (2) the delay must not be
due to the employer’s unjustified act or omission.
If the delay is due to the employer’s unjustified
refusal, the employer may still be required to pay
the salaries notwithstanding the reversal of the
Labor Arbiter’s Decision.

X. JURISDICTION OF THE LABOR ARBITER
A. ORIGINAL AND EXCLUSIVE
B. SCOPE OF JURISDICTION
C. CONCURRENT JURISDICTION
D. LABOR DISPUTE AND CIVIL DISPUTE
E. LABOR DISPUTE AND INTRA-CORPORATE
DISPUTE
188 THE UNIVERSITY OF THE IMMACULATE
CONCEPCION and MO. MARIA ASSUMPTA
DAVID, RVM, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION and
TEODORA AXALAN, respondents.
FACTS:
Private respondent Axalan is a regular
faculty member in the University of Immaculate
Concepcion and also the elected president of the
employees' union. She attended a seminar in
Quezon City on website development. However,
she received a letter from the Dean asking her to
explain why she should not be dismissed for
having been absent without official leave. She
explained that she still held online classes while
she was away and that she thought she would
not be considered absent because of such
action. The Dean asked her to write a letter of
apology but she opted not to comply, believing
she could not be deemed absent since she held
online classes. By then, an ad hoc grievance
committee had been created to investigate the
AWOL charge.
Thereafter, Axalan attended another
seminar, this time on advanced paralegal
training. The Dean informed her that her
participation in said seminar was the subject of a
second AWOL charge. Axalan explained that she
sought the approval of the Vice-President for
Academics. However, the Vice-President denied
having approved the application for official leave.
Meanwhile, the ad hoc grievance
committee found Axalan to have incurred AWOL
on both instances and recommended that Axalan
4
be suspended without pay for 6 months on each
AWOL charge. The university president approved
the recommendation. After the expiration of the
suspension period, Axalan resumed teaching in
the university.
Axalan filed a complaint against the
University for illegal suspension, constructive
dismissal, reinstatement with backwages and
unfair labor practice. The university moved to
dismiss the complaint on the ground of
jurisdiction but this was denied.
The Labor Arbiter ruled that Axalan's
suspension amounted to constructive dismissal,
entitling her to reinstatement and payment of
backwages, salary differentials, damages and
attorney's fees. The university appealed the
decision to the NLRC on the subject of
jurisdiction. The university pointed out that when
the Labor Arbiter rendered his Decision on 11
October 2004, Axalan had returned to work on 1
October 2004 upon the expiration of the one-year
suspension but the NLRC held that the Labor
Arbiter, not the voluntary arbitrator, had
jurisdiction as the controversy did not pertain to
a dispute involving the union and the
university. The Court of Appeals affirmed the
findings of LA and NLRC.
ISSUE:
Whether the voluntary arbitrator had
jurisdiction over the labor dispute?
HELD:
Article 217 of the Labor Code states that unfair
labor practices and termination disputes fall
within the original and exclusive jurisdiction of the
Labor Arbiter.
Article 262 of the same Code provides the
exception:

ART. 262. Jurisdiction over other labor
disputes. The Voluntary Arbitrator or
panel of Voluntary Arbitrators, upon
agreement of the parties, shall also
hear and decide all other labor
disputes including unfair labor practices
and bargaining deadlocks.
As can be gleaned from the transcript of
stenographic notes of the administrative hearing
held on 20 February 2003, the parties in this case
clearly agreed to resort to voluntary arbitration.
Thus, the Labor Arbiter should have immediately
disposed of the complaint and referred the same
to the voluntary arbitrator when the university
moved to dismiss the complaint for lack of
jurisdiction.
189 RENATO REAL VS. SANGU
PHILIPPINES, INC AND/OR KIICHI ABE
FACTS:
Real was the manager Sangu Phils. Inc.,
which is engaged in providing manpower for
general services.
Petitioner was dismissed from
employment due to alleged gross act of
misconduct and for his participation in staging
strike and barricading the premises of the
respondent company. The Labor Arbiter
decided in favor of Real and ordered for his
reinstatement with full backwages. On appeal,
the NLRC dismissed the case holding that Real
is a stockholder and corporate officer of the
respondent company and therefore it is a intra-
corporate dispute over which the Labor Arbiter
has no jurisdiction.
ISSUE:
Does the complaint constitutes an intra-
corporate dispute and thus beyond the
jurisdiction of the Labor Arbiter?
5
LAW:
Art. 217 of the Labor Code on
Jurisdiction of Labor Arbiters and the
Commission
RULING:
This case is not intra-corporate dispute
but rather is a termination dispute and,
consequently falls under jurisdiction of the Labor
Arbiter pursuant to Section 217 of the Labor
Code. Not all conflicts between the stockholders
and the corporations are classified as intra-
corporate dispute. The better policy to be
followed in determining jurisdiction over a case
should be to consider concurrent factors such as
status or relationship of the parties or the
nature of the question that is subject of their
controversy. In the absence of these factors
RTC will not have jurisdiction.
RELATIONSHIP TEST:
We have however examined the records of this
case and we find nothing to prove that petitioners
appointment was made pursuant to the above-
quoted provision of respondent corporations By-
Laws. No copy of board resolution appointing
petitioner as Manager or any other document
showing that he was appointed to said position
by action of the board was submitted by
respondents.
Respondent’s Memo of Appeal, “And so it was
arranged that he would serve as respondent-
appellant Sangus manager, receiving a salary
of P25,000.00”. As earlier stated, complainant-
appellee Renato Real was hired as the manager of
respondent-appellant Sangu. As such, his position
was reposed with full trust and confidence.
Clearly here, respondents failed to prove that
petitioner was appointed by the board of

directors. Thus, we cannot subscribe to their
claim that petitioner is a corporate officer. Having
said this, we find that there is no intra-corporate
relationship between the parties insofar as
petitioners complaint for illegal dismissal is
concerned and that same does not satisfy the
relationship test.
CONTROVERSY TEST:
Respondents terminated the services of
petitioner for the following reasons: (1) his
continuous absences at his post at Ogino
Philippines, Inc; (2) respondents loss of trust and
confidence on petitioner; and, (3) to cut down
operational expenses to reduce further losses
being experienced by the corporation. From
these, it is not difficult to see that the reasons
given by respondents for dismissing
petitioner have something to do with his
being a Manager of respondent corporation and
nothing with his being a director or stockholder.
190 PAQUITO V. ANDO VS. ANDRESITO Y.
CAMPO ET. AL.
FACTS:
Campo and co-respondents were hired
by Premier Allied Contracting Services, Inc.
(PACSI), an independent labor contractor headed
by Ando as its president. They filed an illegal
dismissal case and some money claims with the
NLRC against PACSI. The Labor Arbiter ruled in
favor of Campo and his co-respondents. A writ of
execution of personal property was issued to
answer for the monetary award.
Ando filed an action for prohibition and
damages with TRO before the RTC claiming that
the property belong to him and his wife and
not to the corporation. RTC denied the petition
holding that it has no jurisdiction to try and decide
the case and ruled that the petitioner’s remedy is
6
to file a third party complaint with the NLRC
Sheriff.
ISSUE:
Did RTC correctly rule that it has no
jurisdiction over the case?
LAW:
NLRC Manual in Execution of Judgment
(in relation to Scope of Jurisdiction of Labor
Tribunals under the Labor Code)
RULING
Yes, RTC correctly ruled that it has no
jurisdiction over the case. The regular courts
have no jurisdiction to hear and decide questions
which arise from and are incidental to the
enforcement of decisions, orders and awards
rendered in labor cases by appropriate officers
and tribunals of DOLE. To hold otherwise is to
sanction splitting jurisdiction which is
obnoxious to the orderly administration of justice.
It is the NLRC Manual on the Execution of
Judgment that governs any question on the
execution of judgment of that body. The Rules of
Court apply only by analogy of in a suppletory
character.
OPINION:
I concur with the decision of the
Supreme Court that the RTC has no jurisdiction
over the case as the subject matter of the petition
is the execution of judgment of the NLRC’s
decision. We must take note that, jurisdiction
once acquired, continues until the case is finally
terminated and there can be no end to a case
without the implementation of the decision which
decision must be exercised by the body who
rendered it and not the courts. Especially in this
case, the NLRC Manual specifically provides for
the procedures to be followed in the execution of
judgment promulgated by NLRC

XI. REVISED RULES OF PROCEDURE OF THE
NLRC
A. COMPLAINT; CAUSE OF ACTION; REAL
PARTIES IN INTEREST
191 Bello vs. Bonifacio Security Services,
G.R. No. 188086, August 3, 2011
Facts:
Respondent Bonifacio Security Services,
Inc. (BSSI) is a domestic private corporation
engaged in the business of providing security
services. In July 2001, the BSSI hired Bello as a
roving traffic marshal to manage traffic and to
conduct security and safety-related operations in
the Bonifacio Global City (BGC). In August 2001,
Bello was posted at the Negros Navigation
Company in Pier 2, North Harbor, to supervise
sectoral operations. In November 2001, he was
assigned at BGC as assistant detachment
commander. After a week, he was transferred to
Pacific Plaza Towers as assistant detachment
commander and later as detachment
commander. In June 2002, he was assigned at
Pier 2, North Harbor as assistant detachment
commander, but later reassigned to BGC. In
August 2002, the BSSI hired a new operations
manager, resulting in the reorganization of posts.
In October 2002, Bello was assigned as roving
traffic marshal at the BGC. On October 25, 2002,
he filed an indefinite leave of absence when his
new assignment took effect.
On November 5, 2002, Bello filed a
complaint against the BSSI and its General
Manager, respondent Samuel Tomas, with the
National Labor Relations Commission (NLRC),
claiming that he had been constructively
dismissed when he was demoted from a
detachment commander to a mere traffic
marshal. He alleged that he received a series of
promotions from 2001 to 2002, from traffic
marshal to supervisor, to assistant detachment
commander, and to detachment commander.
7
The BSSI denied Bello's claim of
constructive dismissal, arguing that no promotion
took place; Bello's designation as assistant
detachment commander or detachment
commander was not an employment position but
a duty-related assignment; Bello abandoned his
job when he went on an indefinite leave of
absence and did not report for work.
Labor Arbiter Cresencio G. Ramos, Jr.
found that Bello was illegally dismissed,
In its March 26, 2008 resolution, the
NLRC affirmed the labor arbiter's decision..
The CA nullified the NLRC resolutions.
BSSI prays for the petitions outright
dismissal due to a defective verification, arguing
that the special power of attorney (SPA) of Bellos
attorney-in-fact, Geraldine Bello-Ona, was limited
to representing him in the NLRC case only and
not to the present petition.
Issue:
Whether the petition should be dismissed
outright for defective verification?
Ruling:
Verification of a pleading is a formal, not
jurisdictional, requirement intended to secure
the assurance that the matters alleged in a
pleading are true and correct. Thus, the court
may simply order the correction of unverified
pleadings or act on them and waive strict
compliance with the rules. It is deemed
substantially complied with when one who has
ample knowledge to swear to the truth of the
allegations in the complaint or petition signs the
verification, and when matters alleged in the
petition have been made in good faith or are true
and correct.
As the daughter of Bello, Bello-Ona is deemed to
have sufficient knowledge to swear to the truth of
the allegations in the petition, which are matters

of record in the tribunals and the appellate court
below.
NOTE:
We find no reason to disturb the CA conclusion
that there was no constructive dismissal.
Other than his bare and self-serving allegations,
Bello has not offered any evidence that he was
promoted in a span of four months since his
employment as traffic marshal in July 2001 to a
detachment commander in November 2001.
B. AMENDMENT OF COMPLAINT
C. VENUE AND JURISDICTION
192 CLAUDIA S. YAP, Petitioner, v.
THENAMARIS SHIPS MANAGEMENT and
INTERMARE MARITIME AGENCIES,
INC.,Respondents.
FACTS:
Petitioner was employed as an
electrician of the vessel, M/T SEASCOUT by
Intermare Maritime Agencies, Inc. in behalf of its
principal, Vulture Shipping Limited. The contract
was for 12 months. On 23 August 2001, Yap
boarded M/T SEASCOUT and commenced his
job as electrician. However, on or about 08
November 2001, the vessel was sold.
Yap received his seniority bonus,
vacation bonus, extra bonus along with the
scrapping bonus. However, he insisted that he
was entitled to the payment of the unexpired
portion of his contract since he was illegally
dismissed from employment. He alleged that he
opted for immediate transfer but none was made.
Respondents contended that Yap was
not illegally dismissed. They further alleged that
Yaps contract was validly terminated due to the
sale of the vessel and no arrangement was made
for Yaps transfer to other vessels.
8
Thus, Yap brought the issue before the
Labor Arbiter (LA) which ruled that petitioner
was illegally dismissed; that respondents acted in
bad faith when they assured petitioner of re-
embarkation but he was not able to board; and
that petitioner was entitled to his salaries for the
unexpired portion of his contract for a period of
nine months (US$12,870.00), P100,000 for moral
damages, and P50,000 for exemplary damages
with 10% of the same for Attys fees.
Respondents sought recourse from the
NLRC which modified the award of salaries from
that corresponding to nine months to only three
months (US$4,290.00) pursuant to Section 10
R.A. No. 8042.
Respondents and petitioner both filed a
Motion for Partial Reconsideration.
NLRC affirmed the finding of Illegal
Dismissal and Bad Faith on the part of
respondent. However, the NLRC reversed its
earlier Decision, holding that "there can be no
choice to grant only 3 months salary for every
year of the unexpired term because there is no
full year of unexpired term which this can be
applied."
Respondents filed an MR, which the
NLRC denied. Undaunted, respondents filed a
petition for certiorari under Rule 65 before the
CA.
The CA affirmed the findings and ruling
of the LA and the NLRC. However, the CA ruled
that the NLRC erred in sustaining the LAs
interpretation of Section 10 of R.A. No. 8042. The
CA relied on the clause "or for three months for
every year of the unexpired term, whichever is
less" provided in the 5th paragraph of Section 10
of R.A. No. 8042.
Both parties filed their respective MRs
which the CA denied. Thus, this petition.
ISSUE:
[1] Whether Section 10 of R.A. 8042, to
the extent that it affords an illegally dismissed

migrant worker the lesser benefit of "salaries for
[the] unexpired portion of his employment
contract for three (3) months for every year of the
unexpired term, whichever is less" is
constitutional;
[2] Assuming that it is, whether the CA
gravely erred in granting petitioner only three (3)
months backwages when his unexpired term of 9
months is far short of the "every year of the
unexpired term" threshold.
HELD:
The petition is impressed with merit.
We have previously declared that the
clause "or for three months for every year of the
unexpired term, whichever is less" is
unconstitutional for being violative of the rights of
(OFWs) to equal protection. Moreover, the
subject clause does not state any definitive
governmental purpose, hence, it also violates
petitioner's right to substantive due process.
Generally, an unconstitutional act is not
a law. An exception to this is the doctrine of
operative fact applied when a declaration of
unconstitutionality will impose an undue burden
on those who have relied on the invalid law. This
case should not be included in the exception. It
was not the fault of petitioner that he lost his job
due to an act of illegal dismissal committed by
respondents.
Also, we cannot subscribe to
respondents postulation that the tanker
allowance of US$130.00 should not be included
in the computation of the lump-sum salary. First,
fair play, justice, and due process dictate that this
Court cannot now, for the first time on appeal,
pass upon this question. Second, the allowance
was encapsulated in the basic salary clause.
D. SERVICE OF SUMMONS; TO NATURAL &
JURIDICAL PERSONS
E. RAFFFLE & ASSIGNMENT OF CASES
9
F. APPEARANCE OF LAWYERS & NON-
LAWYERS
G. GROUNDS TO DISMISS COMPLAINT;
H. PROHIBITED PLEADINGS & MOTIONS
I. CONCILIATION & MEDIATION
J. COMPROMISE BEFORE RD & LA
K. SUBMISSION OF POSITION PAPERS;
CONTENTS
L. QUANTUM OF EVIDENCE & BURDEN OF
PROOF; TECHNICAL RULES OF PROCEDURE
193 E.G & I. CONSTRUCTION CORPORATION
and EDSEL GALEOS, Petitioners, v. ANANIAS
P. SATO, NILO BERDIN, ROMEO M. LACIDA,
JR., and HEIRS OF ANECITO S. PARANTAR,
SR., namely: YVONNE, KIMBERLY MAE,
MARYKRIS, ANECITO, JR., and JOHN
BRYAN, all surnamed PARANTAR,
Respondents.
FACTS:
Respondent Sato was hired in October
1990 by petitioner E.G. & I. Construction
Corporation as a grader operator, which is
considered as technical labor. In April 2004, Sato
discovered that petitioner corporation had not
been remitting his premium contributions to the
Social Security System (SSS). When Sato kept
on telling petitioners to update his premium
contributions, he was removed as a grader
operator and made to perform manual labor,
such as tilling the land in a private cemetery
and/or digging earthworks in petitioner
corporation’s construction projects. Thereafter,
petitioners told Sato that they could no longer
afford to pay his wages, and he was advised to
look for employment in other construction com
panies.
Meanwhile, the project engineer of
respondents Berdin, Parantar, and Lacida
instructed them to affix their signatures on
various documents. They refused to sign the
documents because they were written in English,

a language that they did not understand. Irked by
their disobedience, the project engineer
terminated their employment.
Petitioners denied that they illegally
terminated respondents’ employment. According
to them, respondents abandoned their work when
they failed to report for work
The Labor Arbiter rendered a decision
finding that respondents were illegally dismissed
from employment. In lieu of reinstatement, due to
the strained relations of the parties and as prayed
for by respondents, each of them was granted
separation pay equivalent to one (1) month pay
for every year of service. On appeal, the National
Labor Relations Commission (NLRC) reversed
the ruling of the Labor Arbiter. This was then
reversed by the CA and ruled that the
respondents were illegally dismissed.
ISSUE:
Whether or not the CA erred in
reinstating the decision of the Labor Arbiter,
declaring that respondents were illegally
terminated from employment by petitioner
corporation.
HELD:
Petitioner corporation failed to prove that
respondents were dismissed for just or
authorized cause. In an illegal dismissal case,
theonus probandi rests on the employer to
prove that the dismissal of an employee is for
a valid cause.
For abandonment to exist, it is essential
(a) that the employee must have failed to report
for work or must have been absent without valid
or justifiable reason; and (b) that there must have
been a clear intention to sever the employer-
employee relationship manifested by some overt
acts. The employer has the burden of proof to
show the employee's deliberate and unjustified
refusal to resume his employment without any
intention of returning. Mere absence is not
10
sufficient. There must be an unequivocal intent
on the part of the employee to discontinue his
employment. Here, the reason why respondents
failed to report for work was because petitioner
corporation barred them from entering its
construction sites.
DENIED.
194 EXODUS INTERNATIONAL
CONSTRUCTION CORPORATION vs.
GUILLERMO BISCOCHO et.
Facts:
Exodus International Construction
Corporation obtained a contract from Dutch Boy
Philippines, Inc. for the painting of the Imperial
Sky Garden located in Binondo, Manila. Dutch
Boy awarded another contract to Exodus for the
painting of Pacific Plaza, Towers in Fort
Bonifacio, Taguig City. In the furtherance of its
business, Exodus hired respondents as painters
on different dates.
On November 27, 2000, respondents
filed a complaint for illegal dismissal and non-
payment of holiday pay, service incentive leave
pay, 13thmonth pay and night-shift differential
pay.
Petitioners denied respondents'
allegations. As regards Gregorio, petitioners
averred that he absented himself from work and
applied as a painter with SAEI-EEI which is the
general building contractor of Pacific Plaza
Towers. Since then, he never reported back to
work.
Guillermo absented himself from work without
leave. When he reported for work the following
day, he was reprimanded so he worked only
halfday and thereafter was unheard of until the
filing of the instant complaint.
Fernando, Ferdinand, and Miguel were
caught eating during working hours for which
they were reprimanded by their foreman. Since

then they no longer reported for work.
The Labor Arbiter exonerated Exodus from the
charge of illegal dismissal as respondents chose
not to report for work. Since there is neither
illegal dismissal nor abandonment of job,
respondents were ordered be reinstated but
without any backwages.
Issues:
Who has the burden of proving?
Ruling:
[T]his Court is not unmindful of the rule
that in cases of illegal dismissal, the employer
bears the burden of proof to prove that the
termination was for a valid or authorized cause.
But [b]efore the [petitioners] must bear the
burden of proving that the dismissal was legal,
[the respondents] must first establish by
substantial evidence that indeed they were
dismissed. [I]f there is no dismissal, then there
can be no question as to the legality or illegality
thereof.
NO ABANDONEMENT:
It is the employer who has the burden of
proof to show a deliberate and unjustified refusal
of the employee to resume his employment
without any intention of returning.[27] It is
therefore incumbent upon petitioners to ascertain
the respondents interest or non-interest in the
continuance of their employment. However,
petitioners failed to do so.
Respondents must be reinstated and paid
their holiday pay, service incentive leave pay,
and 13th month pa:
Respondents are regular employees of
petitioners. It is clear from the records that when
one project is completed, respondents were
automatically transferred to the next project
11
awarded to petitioners. There was no
employment agreement given to respondents
which clearly spelled out the duration of their
employment, the specific work to be performed
and that such is made clear to them at the time of
hiring. It is now too late for petitioners to claim
that respondents are project employees whose
employment is coterminous with each project or
phase of the project to which they are assigned.
As painters, they performed activities
which were necessary and desirable in the usual
business of petitioners, who are engaged in
subcontracting jobs for painting of residential
units, condominium and commercial buildings. As
regular employees, respondents are entitled to
be reinstated without loss of seniority rights.
Respondents are also entitled to their money
claims such as the payment of holiday pay,
service incentive leave pay, and 13th month pay.
However, they cannot be entitled to backwages.
In cases where there is no evidence of dismissal,
the remedy is reinstatement but without
backwages.
M. APPEAL PROCEDURE
195 BANAHAW BROADCASTING
CORPORATION, Petitioner, v. CAYETANO
PACANA III, NOE U. DACER, JOHNNY B.
RACAZA, LEONARDO S. OREVILLO,
ARACELI T. LIBRE, GENOVEVO E.
ROMITMAN, PORFERIA M. VALMORES,
MENELEO G. LACTUAN, DIONISIO G.
BANGGA, FRANCISCO D. MANGA, NESTOR
A. AMPLAYO, LEILANI B. GASATAYA,
LORETA G. LACTUAN, RICARDO B. PIDO,
RESIGOLO M. NACUA and ANACLETO C.
REMEDIO, Respondents.
FACTS:
Respondents in the case at bar (the
DXWG personnel), are employees of the DXWG-
Iligan City radio station which is owned by

petitioner Banahaw Broadcasting Corporation
(BBC), a corporation managed by
Intercontinental Broadcasting Corporation (IBC).
On August 29, 1995, the DXWG
personnel filed a complaint for illegal dismissal,
unfair labor practice, reimbursement of unpaid
Collective Bargaining Agreement (CBA) benefits,
and attorneys fees against IBC and BBC.
On June 21, 1996, Labor Arbiter (LA)
decided in favour of the DXWG personnel.
Both, parties, however, appealed to the
National Labor Relations Commission (NLRC).
On May 15, 1997, a Motion to Dismiss,
Release, Waiver and Quitclaim, was jointly filed
by IBC and the DXWG personnel based on the
latter's admission that IBC is not their employer
as it does not own DXWG-Iligan City. The NLRC
granted the Motion with respect to IBC.
BBC filed an MR.
On December 12, 1997, the NLRC
issued a Resolution vacating the Decision of LA
and remanding the case to the arbitration branch
of origin on the ground that while the complaint
was filed against both IBC and BBC, only IBC
was served with summons, ordered to submit a
position paper, and furnished a copy of the
assailed decision.
On October 15, 1998, the new LA
rendered a Decision adjudging BBC to be liable
for the same amount discussed in the vacated
original Decision of the previous LA.
Both BBC and respondents appealed to
the NLRC. BBC challenged the monetary award
itself. In the same Memorandum of Appeal, BBC
incorporated a Motion for the Recomputation of
the Monetary Award (of the Labor Arbiter), in
order that the appeal bond may be reduced.
On September 16, 1999, the NLRC
issued an Order Denying the Motion for the
Recomputation of the Monetary Award. The
NLRC ordered BBC to post the required bond
within 10 days from receipt of said Order, with a
warning that noncompliance will cause the
12
dismissal of the appeal for non-perfection.
Instead of complying with the Order to post the
required bond, BBC filed a Motion for
Reconsideration, alleging this time that since it is
wholly owned by the Republic of the Philippines,
it need not post an appeal bond.
On November 22, 1999, the NLRC
rendered its Decision. In said Decision, the NLRC
denied the MR of BBC and accordingly dismissed
the appeal of BBC for non-perfection.
BBC filed an MR which was denied by
the NLRC.
BBC filed with the CA a Petition for
Certiorari under Rule 65.
On April 15, 2005, the CA rendered the
assailed Decision denying BBCs Petition
forCertiorari.The CA held that BBC, though
owned by the government, is a corporation with a
personality distinct from the Republic or any of its
agencies or instrumentalities, and therefore do
not partake in the latter's exemption from the
posting of appeal bonds.
The Court of Appeals denied the
MR.Hence, this Petition for Review.
ISSUE:
Whether BBC is exempt from posting
an appeal bond.
HELD:
Petition denied.
GOCCs NOT EXEMPT FROM
POSTING BOND
Generally, the government and all the
attached agencies with no legal personality
distinct from the former are exempt from posting
appeal bonds, whereas government-owned and
controlled corporations (GOCCs) are not similarly
exempted except if it is sued in relation to its
governmental functions. Here, BBC was
organized as a private corporation, sequestered
in the 1980s and the ownership of which was
subsequently transferred to the government. Its

primary function is to engage in commercial radio
and television broadcasting. It is therefore clear
that BBCs function is commercial or proprietary
and not governmental. As such, BBC is not
entitled to an exemption from the posting of an
appeal bond.
FAILURE TO POST BOND
CONSTITUTED NON-PERFECTION OF
APPEAL
In case of a judgment involving a
monetary award, an appeal by the employer
may be perfected only upon the posting of a cash
or surety bond issued by a reputable bonding
company duly accredited by the Commission in
the amount equivalent to the monetary award
in the judgment appealed from. The posting of
the appeal bond within the period provided by law
is not merely mandatory but jurisdictional.
The failure on the part of BBC to perfect the
appeal thus had the effect of rendering the
judgment final and executory.
196 MIGUEL DELA PENA
BARAIRO,Petitioner, v. OFFICE OF THE
PRESIDENT and MST MARINE SERVICES
(PHILS.), INC. et al.,Respondents.
FACTS:
Miguel Barairo (petitioner) was hired on
June 29, 2004 by respondent MST Marine
Services (Phils.) Inc., (MST) for its principal, TSM
International, Ltd., as Chief Mate of the vessel
Maritina, for a contract period of six months. He
boarded the vessel and discharged his duties on
July 23, 2004, but was relieved on August 28,
2004 ostensibly for transfer to another vessel,
Solar. Petitioner thus disembarked in Manila on
August 29, 2004.
Petitioner was later to claim that he was
not paid the promised "stand-by fee" in lieu of
salary that he was to receive while awaiting
13
transfer to another vessel as in fact the transfer
never materialized.
On October 20, 2004, petitioner signed a
new Contract of Employment for a six-month
deployment as Chief Mate in a newly-built
Japanese vessel, M/T Haruna. He was paid a
one-month "standby fee" in connection with the
Maritina contract.
Petitioner boarded the M/T Harunaon
October 31, 2004 but he disembarked a week
later as MST claimed that his boarding of
M/THaruna was a "sea trial" which, MST
maintains, was priorly made known to him on a
"stand-by" fee. MST soon informed petitioner that
he would be redeployed to the M/THarunaon
November 30, 2004, but petitioner refused,
prompting MST to file a complaint for breach
of contract against him before the Philippine
Overseas Employment Administration (POEA).
Petitioner claimed, however, that he
was placed on "forced vacation" when he was
made to disembark from the M/THaruna, and that
not wanting to experience a repetition of the
previous "termination" of his employment aboard
the Maritina, he refused to be redeployed to the
M/THaruna.
By Orderof April 5, 2006, then POEA
Administrator Rosalinda D. Baldoz penalized
petitioner with one year suspension from
overseas deployment upon a finding that his
refusal to complete his contract aboard the
M/THaruna constituted a breach thereof.
On appeal by petitioner, the Secretary
of Labor, by Order of September 22, 2006,
noting that it was petitioners first offense,
modified the POEA Order by shortening the
period of suspension from one year to six
months.
The Office of the President (OP), by
Decision of November 26, 2007, dismissed
petitioners appeal for lack of jurisdiction.
The OP held that appeals to it in labor
cases, except those involving national interest,

have been eliminated. Petitioners motion for
partial reconsideration was denied by Resolution
of June 26, 2009, hence, the present petition.
ISSUE:
Whether an appeal to the Office of the
President is proper in this case
HELD:
NO
LABOR LAW: Labor Relations, Appeals
Following settled jurisprudence, the
proper remedy to question the decisions or
orders of the Secretary of Labor is via Petition for
Certiorari under Rule 65, not via an appeal to the
OP. For appeals to the OP in labor cases have
indeed been eliminated, except those involving
national interest over which the President may
assume jurisdiction.
Petitioners appeal of the Secretary of
Labors Decision to the Office of the President did
not toll the running of the period, hence, the
assailed Decisions of the Secretary of Labor are
deemed to have attained finality.
At all events, on the merits, the petition
just the same fails.
As found by the POEA Administrator and
the Secretary of Labor, through Undersecretary
Danilo P. Cruz, petitioners refusal to board the
M/THarunaon November 30, 2004 constituted
unjustified breach of his contract of employment
under Section 1 (A-2) Rule II, Part VI[sic] of the
POEA Sea based Rules and Regulations. That
petitioner believed that respondent company
violated his rights when the period of his earlier
Maritina contract was not followed and his "stand-
by fees" were not fully paid did not justify his
refusal to abide by the valid and existing Haruna
contract requiring him to serve aboard
M/THaruna .For, as noted in the assailed DOLE
Order, "if petitioners rights has been violated as
he claims, he has various remedies under the
contract which he did not avail of."
14
Parenthetically, the Undersecretary of
Labor declared that "the real reason [petitioner]
refused to re-join Harunaon November 30, 2004,
is that he left the Philippines on November 29,
2004 to join MTA driatiki, a vessel of another
manning agency," which declaration petitioner
has not refuted.
197 UNIVERSITY PLANS INCORPORATED,
Petitioner, v. BELINDA P. SOLANO, TERRY A.
LAMUG, GLENDA S. BELGA, MELBA S.
ALVAREZ, WELMA R. NAMATA, MARIETTA D.
BACHO and MANOLO L. CENIDO,
Respondents.
FACTS:
Respondents filed before the Labor
Arbiter complaints for illegal dismissal, illegal
deductions, overriding commissions, unfair labor
practice, moral and exemplary damages, and
actual damages against petitioner University
Plans Incorporated.
The Labor Arbiter found petitioner guilty
of illegal dismissal and ordered respondents
reinstatement as well as the payment of their full
backwages, proportionate 13th month pay,
moral/exemplary damages, and attorney's fees.
On appeal, petitioner likewise Motion to
Reduce Bond alleging that it was under
receivership and that it cannot dispose of its
assets at such a short notice. Because of this, it
could not post the required bond. Nevertheless, it
has P30,000.00 available for immediate
disposition and thus prayed that said amount be
deemed sufficient to satisfy the required bond for
the perfection of its appeal. But the NLRC denied
petitioners Motion to Reduce Bond and directed it
to post an additional appeal bond in the amount
of P3,013,599.50 within a non-extendible period
of 10 days from notice, otherwise the appeal shall
be dismissed for non-perfection pursuant to
Article 223 of the Labor Code.

Petitioner filed a Motion for
Reconsideration Insisting that the NLRC has the
discretion to reduce the appeal bond upon motion
of appellant and on meritorious grounds. The
NLRC, however, denied the same. It ruled that
while it has the discretion to reduce the appeal
bond, it is nevertheless not persuaded that
petitioner was incapable of posting the required
bond. It noted that petitioner failed to submit any
financial statement or provide details anent its
alleged receivership or its sources of income.
On review, the CA held that the NLRC in
meritorious cases and upon motion by the
appellant may reduce the amount of the bond.
However, in order for the NLRC to exercise this
discretion, it is imperative for the petitioner to
show veritable proof that it is entitled to the same.
Since petitioner failed to provide the NLRC with
sufficient basis to determine its incapacity to post
the required appeal bond, the CA opined that the
NLRC's denial of petitioner's Motion to Reduce
Bond was justified. Hence, this petition.
ISSUE:
Did the NLRC and CA err when it
denied petitioners motion to reduce bond?
HELD:
Posting of bond is indispensable to the
perfection of an appeal in cases involving
monetary awards from the Decision of the Labor
Arbiter pursuant to Art 223 of the Labor Code in
relation to Sections 4 and 6, Rule VI of the
Revised Rules of Procedure of the NLRC.
The abovementioned provisions highlight
the importance of posting a cash or surety bond
in the perfection of an appeal to the NLRC from
the Labor Arbiters judgment involving a monetary
award.
Under the Rules, appeals involving
monetary awards are perfected only upon
compliance with the following mandatory
requisites, namely: (1) payment of the appeal
15
fees; (2) filing of the memorandum of appeal; and
(3) payment of the required cash or surety bond.
The intention of the lawmakers to make
the bond a mandatory requisite for the perfection
of an appeal by the employer is clearly expressed
in the provision that an appeal by the employer
may be perfected only upon the posting of a cash
or surety bond. The word only in Article 223 of
the Labor Code makes it unmistakably plain that
the lawmakers intended the posting of a cash or
surety bond by the employer to be the essential
and exclusive means by which an employers
appeal may be perfected. The word may refers to
the perfection of an appeal as optional on the
part of the defeated party, but not to the
compulsory posting of an appeal bond, if he
desires to appeal. The meaning and the intention
of the legislature in enacting a statute must be
determined from the language employed; and
where there is no ambiguity in the words used,
then there is no room for construction. (Ramirez
v. Court of Appeals,G.R. No. 182626, December
4, 2009)
Notably, however, under Section 6, Rule
VI of the NLRC's Revised Rules of Procedure,
the bond may be reduced albeit only on
meritorious grounds and upon posting of a partial
bond in a reasonable amount in relation to the
monetary award. Suffice it to state that while said
Rules allows the Commission to reduce the
amount of the bond, the exercise of the authority
is not a matter of right on the part of the movant,
but lies within the sound discretion of the NLRC
upon a showing of meritorious grounds.
Petitioner attached to its Motion to
Reduce Bond the SEC Orders dated August 23,
1999 and May 23, 2000. From the said SEC
Orders, it is unmistakable that petitioner was
under receivership. And from the tenor and
contents of said Orders, it is possible that
petitioner has no liquid asset which it could use to
post the required amount of bond. Also, it is quite
understandable that because of petitioners

financial state, it cannot raise the amount of more
thanP3 million within a period of 10 days from
receipt of the Labor Arbiters judgment.
However, the NLRC ignored petitioners
allegations and instead remained adamant that
since the amount of bond is fixed by law,
petitioner must post an additional bond of more
thanP3 million. It is an utter disregard of the
provision of the Labor Code and of the NLRC
Revised Rules of Procedure allowing the
reduction of bond in meritorious cases. While the
NLRC tried to correct this error in its March 21,
2003 Resolution By further explaining that it was
not persuaded by petitioners alleged incapability
of posting the required amount of bond for failure
to submit financial statement, list of sources of
income and other details with respect to the
alleged receivership, we still find the hasty denial
of the motion to reduce bond not proper.
Notwithstanding petitioner's failure to
submit its financial statement and list of sources
of income and to give more details relative to its
receivership, it was nevertheless able to show
through the abovementioned SEC Orders that it
was indeed under a state of receivership. This
should have been sufficient reason for the NLRC
to not outrightly deny petitioners motion. Here,
considering the clear showing of petitioners state
of receivership, the NLRC should have
conducted such preliminary determination and
therein require the submission of said documents
and other necessary evidence before proceeding
to resolve the subject motion.
After all, the present case falls under
those cases where the bond requirement on
appeal may be relaxed considering that (1) there
was substantial compliance with the Rules; (2)
the surrounding facts and circumstances
constitute meritorious grounds to reduce the
bond; and (3) the petitioner, at the very least,
exhibited its willingness and/or good faith by
posting a partial bond during the reglementary
period. Thus, it was an error on the part of the
16
NLRC when it denied petitioners Motion to
Reduce Bond and likewise on the part of the CA
when it affirmed said denial.
CA REVERSED
198 Semblante vs. CA, G.R. No. 196426,
August 15, 2011
Facts:
Petitioners Marticio Semblante and
Dubrick Pilar worked in the Gallera de Mandaue
owned by the respondents-spouses Vicente and
Maria Luisa Loot. The petitioners rendered their
services as the official massiador and
sentenciador in 1993. As the masiador,
Semblante calls and takes the bets from the
gamecock owners and other bettors and orders
the start of the cockfight. He also distributes the
winnings after deducting the arriba, or the
commission for the cockpit. Meanwhile, as the
sentenciador, Pilar oversees the proper gaffing of
fighting cocks, determines the fighting cocks'
physical condition and capabilities to continue the
cockfight, and eventually declares the result of
the cockfight. As masiador and sentenciador,
Semblante receives PhP2,000 per week or a total
of PhP8,000 per month, while Pilar gets
PhP3,500 a week or PhP14,000 per month. They
work every Tuesday, Wednesday, Saturday, and
Sunday every week, excluding monthly derbies
and cockfights held on special holidays. Their
working days start at 1:00 p.m. and last until
12:00 midnight, or until the early hours of the
morning depending on the needs of the cockpit.
Petitioners had both been issued employees'
identification cards that they wear every time they
report for duty. However on November 14, 1993,
petitioners were denied entry into the cockpit
upon the instructions of respondents and were
informed of the termination of their employment
effective that date. Respondents denied that
petitioners were their employees and alleged

that they were associates of respondents‘
independent contractor, Tomas Vega. They
claimed that petitioners have no regular working
time or day and they are free to decide for
themselves whether to report for work or not on
any cockfighting day. And the identification card
issued was only to free them from the normal
entrance fees and to differentiate them from the
general public.
The Labor Arbiter found that there exist
an employer-employee relationship between the
petitioner and the respondents because the latter
performed the works necessary and
indispensable to the usual trade or business of
the respondents for a number of years. It has
ruled that petitioners were illegally dismissed and
are entitled to their backwages and separation
pay. However, the NLRC reversed the Labor
Arbiter‘s decision. It held that respondents having
no power on the selection and engagement of
petitioners and that no separate individual
contract with respondents was ever executed by
petitioners. In its appeal to the CA, the latter
ruled in favor for the respondents and held that
referees and bet-takers in a cockfight need to
have the kind of expertise that is characteristic of
the game to interpret messages conveyed by
mere gestures.
Hence, petitioners are akin to
independent contractors who possess unique
skills, expertise and talent to distinguish them
from ordinary employees. Further, petitioners
were not provided by tools and instrumentalities
they needed to perform their work. They only
need their unique skills and talents in the
performance of their job as masiador and
sentenciador.
Respondents counsel received the Labor
Arbiters Decision on September 14, 2004. And
within the 10-day appeal period, he filed the
respondents appeal with the NLRC on
September 24, 2004, but without posting a
17
cash or surety bond equivalent to the monetary
award granted by the Labor Arbiter.
It was only on October 11, 2004 that
respondents filed an appeal bond dated October
6, 2004. Hence, in a Resolution dated August 25,
2005, the NLRC denied the appeal for its non-
perfection.
Subsequently, however, the NLRC,
acting on respondents Motion for
Reconsideration, reversed its Resolution on the
postulate that their appeal was meritorious and
the filing of an appeal bond, albeit belated, is a
substantial compliance with the rules.
Petitioners appealed to CA and argued
that the NLRC gravely abused its discretion in
entertaining an appeal that was not perfected in
the first place.
CA ruled in favour of NLRCs decision.
Issue:
Whether or not an appeal not perfected
in the first place can be entertained by the
NLRC?
Ruling:
Time and again, however, this Court, considering
the substantial merits of the case, has relaxed
this rule on, and excused the late posting of, the
appeal bond when there are strong and
compelling reasons for the liberality, such as the
prevention of miscarriage of justice extant in the
case or the special circumstances in the case
combined with its legal merits or the amount and
the issue involved.
As elucidated by the NLRC, the circumstances
obtaining in this case wherein no actual
employer-employee exists between the
petitioners and the private respondents
[constrain] the relaxation of the rules. In this
regard, we find no grave abuse attributable to the
administrative body. While respondents had
failed to post their bond within the 10-day period
provided above, it is evident, on the other hand,

that petitioners are NOT employees of
respondents, since their relationship fails to pass
muster the four-fold test of employment.
Respondents, not being petitioners employers,
could never have dismissed, legally or illegally,
petitioners, since respondents were without
power or prerogative to do so in the first place.
The rule on the posting of an appeal bond cannot
defeat the substantive rights of respondents to be
free from an unwarranted burden of answering
for an illegal dismissal for which they were never
responsible.
N. NLRC; COMPOSITION; POWERS &
FUNCTIONS
199 RODOLFO LUNA, Petitioner, v. ALLADO
CONSTRUCTION CO., INC., and/or RAMON
ALLADO, Respondents.
FACTS:
Sometime in the afternoon of November
24, 2001, petitioner alleges that he was given a
travel order dated to proceed to respondents
main office in Davao City for reassignment. Upon
arrival at the office, he was asked to sign several
sets of "Contract of Project Employment". He
refused. Thus, he was not given a reassignment
or any other work. These incidents prompted him
to file the complaint.
Respondents, on the other hand,
alleged that petitioner applied for a leave of
absence which was granted. Upon expiration of
his leave, he was advised to report to the
companys project in Sarangani Province.
However, he refused and claimed instead that he
had been dismissed illegally.
Finding that petitioner is deemed
resigned, the Labor Arbiter (LA) dismissed
petitioners complaint for illegal dismissal, but
ordered respondent to pay the former the amount
of P18,000.00 by way of financial assistance.
18
Respondents appealed with the National
Labor Relations Commission (NLRC) purely for
the purpose of questioning the validity of the
grant of financial assistance. NLRC reversed
the decision of the LA and declared respondents
guilty of illegal dismissal, and ordered them to
pay petitioner one-month salary for every year of
service as separation pay. Respondents moved
for reconsideration but their motion was denied.
Respondents elevated their cause to the
CA via petition for certiorari under Rule 65. The
CA granted respondents petition for certiorari and
deleted the award of financial assistance.
Further, the CA held that it was grave abuse of
discretion for the NLRC to rule on the issue of
illegal dismissal when such issue was not raised
on appeal.
Petitioner filed an MR but this was
denied by the CA.
ISSUE:
(1) Whether the NLRC could still review
issues not brought during the appeal,
(2) Whether the CA exercised grave
abuse of discretion in disregarding the findings of
fact by the NLRC, the principle of social justice,
and jurisprudence with respect to the award of
financial assistance, and
(3) Whether the CA exhibited bias and
partiality when it rendered the decision and
resolution considering the hasty and improvident
issuance of a writ of preliminary injunction to
frustrate petitioner in implementing the final and
executor judgment of the NLRC favouring
petitioner.
HELD:
The petition is PARTLY GRANTED.
The award of financial assistance is
REINSTATED.
I. The 2002 Rules of Procedure of the
NLRC, which was in effect at the time
respondents appealed the Labor Arbiters

decision, provided that the NLRC shall limit itself
only to the specific issues that were elevated for
review. Here, the NLRC passed upon the issue of
illegal dismissal although this was not brought up
in the appeal. Therefore, by considering the
arguments and issues in the reply/opposition to
appeal which were not properly raised by timely
appeal nor comprehended within the scope of the
issue raised in petitioners appeal, public
respondent committed grave abuse of discretion
amounting to excess of jurisdiction.
II. As shown by the records, inconsistent
with his claim that he was actually dismissed
petitioner applied for and was granted a week
long leave. Petitioner did not deny this. He
merely claimed that he went on leave since he
was not given any work assignment by the
Company. However, the leave application form
which bore his signature clearly stated that his
reason for going on leave was "to settle [his]
personal problem." Indeed, the NLRC gravely
abused its discretion in reversing the Labor
Arbiters decision on mere conjectures and
insubstantial grounds.
III. We are not unmindful of the rule that
financial assistance is allowed only in instances
where the employee is validly dismissed for
causes other than serious misconduct or those
reflecting on his moral character. But we must
stress that this Court did allow the grant of
financial assistance as a measure of social
justice and exceptional circumstances, and as an
equitable concession. There appears to be no
reason why petitioner, who has served
respondent corporation for more than eight years
without committing any infraction, cannot be
extended the reasonable financial assistance of
P18,000.00 as awarded by the Labor Arbiter on
equity considerations.
IV. Granting of a TRO by a justice of the
CA even without the concurrence of the other
associate justices in the division, is allowed in
cases of extreme urgency. Here, the records of
19
this case would attest to the urgency of the
situation. When the TRO was issued, the NLRC
Regional Arbitration Branch No. XI was already in
the process of enforcing the assailed Resolution
of the NLRC dated May 9, 2003 as evidenced by
its issuance of a Notice of Hearing for a pre-
execution conference which was impelled by a
motion made by petitioner. The pre-execution
conference was conducted as scheduled, thus,
respondents filed with the Court of Appeals an
Urgent Motion for the Issuance of a Temporary
Restraining Order and/or Writ of Preliminary
Injunction.
O. FINALITY OF NLRC & EXECUTION OF
MONETARY JUDGMENT; PRE-EXECUTION
CONFERENCE; QUASHAL OF WRIT OF
EXECUTION & THIRD PARTY CLAIMS
200 PAQUITO V. ANDO, Petitioner, v.
ANDRESITO Y. CAMPO, ET AL.,,
Respondents.
FACTS:
Petitioner was the president of PACSI,
an independent labor contractor. Respondents
were hired by PACSI as pilers or haulers. They
filed a case for illegal dismissal and some money
claims with the National Labor Relations
Commission (NLRC)
The Labor Arbiter ruled in respondents’
favor. To answer for the monetary award, NLRC
issued a Notice of Sale on Execution of Personal
Property over the property in the name of
“Paquito V. Ando x x x married to Erlinda S.
Ando.
Petitioner then filed an action for
prohibition and damages with prayer for the
issuance of a temporary restraining order (TRO)
before the Regional Trial Court (RTC). Petitioner
claimed that the property belonged to him and his
wife, not to the corporation, and, hence, could not
be subject of the execution sale. The RTC denied

petitioner’s prayer for a TRO, holding that the trial
court had no jurisdiction to try and decide the
case. The CA affirmed the RTC Order.
Petitioner then filed the present petition
seeking the nullification of the CA Decision. He
argued that there was no indication in the body of
the Decision that he was solidarily liable with the
corporation.
ISSUE:
Whether or not the CA erred in upholding
the RTC Decision
HELD:
LABOR LAW: Execution
NO. The Court has long recognized that
regular courts have no jurisdiction to hear and
decide questions which arise from and are
incidental to the enforcement of decisions,
orders, or awards rendered in labor cases by
appropriate officers and tribunals of the
Department of Labor and Employment. To hold
otherwise is to sanction splitting of jurisdiction
which is obnoxious to the orderly administration
of justice.
However, petitioner is not seeking to stop
the execution of the judgment against the
corporation, what petitioner claims is that the
property sought to be levied does not belong to
PACSI, the judgment debtor, but to him and his
wife. Since he was sued in a representative
capacity, and not in his personal capacity, the
property could not be made to answer for the
judgment obligation of the corporation.
The power of the NLRC, or the courts, to
execute its judgment extends only to properties
unquestionably belonging to the judgment
debtor alone. A sheriff, therefore, has no
authority to attach the property of any person
except that of the judgment debtor. Likewise,
there is no showing that the sheriff ever tried to
execute on the properties of the corporation.
20
201 FILIPINAS PALMOIL PROCESSING, INC.
and DENNIS T. VILLAREAL, Petitioners, v.
JOEL P. DEJAPA, represented by his
Attorney-in-Fact MYRNA MANZANO,
Respondent.
FACTS:
In 1997, respondent Joey Dejapa filed a
Complaint for illegal dismissal and money claims
against petitioner Asian Plantation Phils., Inc.
(formerly Veg. Oil Phils. Inc.), now Filipinas
Palmoil Processing, Inc., Dennis T. Villareal and
Tom Madula. The Labor Arbiter (LA) dismissed
respondent's complaint for lack of merit. The
NLRC affirmed this.
The CA reversed and set aside the
NLRC decision and resolution. It found that
petitioner company was respondent's employer
and that Tom Madula was not really an
independent contractor, but petitioner company's
Operations Manager. It ruled that respondent
was illegally dismissed by petitioner company.
Respondent filed with the LA a Motion for
Execution and Computation of the Award. The
LA issued a Writ of Execution. Petitioners filed a
Motion to Quash Writ of Execution on the ground
that it can be held liable only insofar as the
reinstatement aspect and/or the monetary award
were concerned, pursuant to the CA Decision
dated August 29, 2002, but not to backwages.
Respondent then filed before the CA a
Very Urgent Motion for Clarification of Judgment,
praying that the CA Decision dated August 29,
2002 be clarified to the effect that petitioner be
made solely liable to the judgment award and, as
a consequence thereof, to order the NLRC and
the LA to implement the same and to direct the
UCPB to release the garnished amount. The CA,
in a new Resolution, then ordered the
reinstatement of respondent, and the payment of
his backwages.
ISSUE:

Whether or not the CA erred in
reinstating respondent.
HELD:
The petition lacks merit.
LABOR LAW: Judgment nunc pro
tunc
The CA Decision became final and
executory on February 27, 2004 after we denied
petitioners' petition for review on certiorari, and
an entry of judgment was subsequently made.
As a general rule, final and executory
judgments are immutable and unalterable,
except under these recognized exceptions, to
wit: (a) clerical errors; (b) nunc pro tunc entries
which cause no prejudice to any party; and (c)
void judgments.
The object of a judgment nunc pro tunc
is not the rendering of a new judgment and the
ascertainment and determination of new rights,
but is one placing in proper form on the record,
the judgment that had been previously rendered,
to make it speak the truth, so as to make it show
what the judicial action really was, not to correct
judicial errors, such as to render a judgment
which the court ought to have rendered, in place
of the one it did erroneously render, nor to supply
non-action by the court, however erroneous the
judgment may have been.
Petition is DENIED. The decision of
CA is affirmed.
202 PFIZER, INC. AND/OR REY GERARDO
BACARRO, AND/OR FERDINAND CORTES,
AND/OR ALFRED MAGALLON, AND/OR
ARISTOTLE ARCE, Petitioners, v.
GERALDINE VELASCO, Respondent.
FACTS:
Private respondent Geraldine L. Velasco
was terminated from employment with petitioner
PFIZER, INC. The Labor Arbiter rendered its
21
decision declaring the dismissal of Velasco
illegal, ordering her reinstatement. PFIZER
appealed to the National Labor Relations
Commission (NLRC) but its appeal was denied.
The CA upheld the validity of respondents
dismissal from employment but ordered Pfizer to
pay Velasco wages from the date of the Labor
Arbiters decision ordering her reinstatement until
November 23, 2005, when the Court of Appeals
rendered its decision declaring Velasco's
dismissal valid.
ISSUE:
Did the CA commit a serious but
reversible error when it ordered Pfizer to pay
Velasco wages from the date of the Labor
Arbiters decision ordering her reinstatement
until November 23, 2005, when the Court of
Appeals rendered its decision declaring
Velascos dismissal valid?
HELD:
The order of reinstatement is
immediately executory. The unjustified refusal
of the employer to reinstate a dismissed
employee entitles him to payment of his salaries
effective from the time the employer failed to
reinstate him despite the issuance of a writ of
execution. Unless there is a restraining order
issued, it is ministerial upon the Labor Arbiter to
implement the order of reinstatement. In the case
at bar, no restraining order was granted. PFIZER
did not immediately admit respondent back to
work which, according to the law, should have
been done as soon as an order or award of
reinstatement is handed down by the Labor
Arbiter without need for the issuance of a writ of
execution. Thus, respondent was entitled to the
wages paid to her under the writ of execution.

203 ANTONIO P. SALENGA and
NATIONAL LABOR RELATIONS COMMISSION
vs COURT OF APPEALS and CLARK DEVEL
OPMENT CORPORATION
G.R. Nos. 174941, February 1, 2012
FACTS:
President/Chief Executive Officer (CEO)
Rufo Colayco issued an Order informing Salenga
that, pursuant to the decision of the board of dire
ctors of respondent CDC, the position of head ex
ecutive assistant the position held by petitioner
was declared redundant. His employment was th
en terminated. He then filed illegal dismissal case
against CDC and Colayco. The Labor Arbiter ru
led in favor of Salenga. When the Decision was r
endered, CDC was already under the leadership
of Sergio T. Naguiat. He instructed Atty. Monina
C. Pineda, manager of the Corporate and Legal
Services Department and concurrent corporate b
oard secretary, not to appeal the Decision and to
so inform the OGCC. However, two separate ap
peals were filed before LA Darlucio. One from the
OGCC on behalf of respondent CDC and Rufo C
olayco and the second from Rufo Colayco.
Petitioner opposed the two appeals on th
e grounds that both appellants had failed to obser
ve Rule VI, Sections 4 to 6 of the NLRC Rules of
Procedure; and that appellants had not been auth
orized by respondent’s board of directors to repre
sent the corporation and, thus, they were not the
“employer” whom the Rules referred to.
ISSUE:
Whether or not NLRC can entertain an a
ppeal absent a board resolution allowing it.
HELD:
No. The NLRC had no jurisdiction to ente
rtain the appeal filed by TimbolRoman and former
CDC CEO Colayco.
A corporation can only exercise its power
s and transact its business through its board of di
22
rectors and through its officers and agents when
authorized by a board resolution or its bylaws.
Clearly, therefore, the CA committed
grave abuse of discretion in entertaining the
Petition filed before it after the NLRC had
dismissed the case based on lack of jurisdiction.
The assailed CA Decision did not even resolve
petitioner Salengas consistent and persistent
claim that the NLRC should not have taken
cognizance of the appeal in the first place, absent
a board resolution. Thus, LA Darlucios Decision
with respect to the liability of the corporation still
stands.
Based on the foregoing, all other
subsequent proceedings regarding the issue of
petitioners dismissal are null and void for having
been conducted without jurisdiction. Thus, it is no
longer incumbent upon us to rule on the other
errors assigned in the matter of petitioner
Salengas dismissal.
NOTE:
Let it be stressed that once a decision has
become final and executory, it becomes the
ministerial duty of this Office to issue the
corresponding writ of execution. The rationale
behind it is based on the fact that the winning
party has suffered enough and it is the time for
him to enjoy the fruits of his labor with dispatch.
The very purpose of the pre-execution
conference is to explore the possibility for the
parties to arrive at an amicable settlement to
satisfy the judgment award speedily, not to delay
or prolong its implementation.
204 ESTATE OF NELSON R. DULAY,
represented by his wife MERRIDY JANE P.
DULAY, Petitioner, v. ABOITIZ JEBSEN
MARITIME, INC. and GENERAL
CHARTERERS, INC., Respondents.
FACTS:

Since 1986, Nelson Dulay was employed
as an ordinary seaman and later as bosun on
contractual basis by General Charters, Inc,, a
subsidiary of Aboitiz Jebsen Maritime. From
September 3, 1999 up to July 19, 2000, Nelson
was detailed in petitionersvessel, the MV
Kickapoo Belle.
At the time of his death on August 13,
2000, he was a bona fide member of the
AMOSUP, GCI collective bargaining agent.
Nelson widow, Merridy Jane, thereafter claimed
for death benefits through the grievance
procedure of the CBA between AMOSUP and
GCI. However, on January 29, 2001, the
grievance procedure was "declared deadlocked"
as petitioners refused to grant the benefits sought
by the widow.
On March 5, 2001, Merridy Jane filed a
complaint with the NLRC against GCI for death
and medical benefits and damages. Merridy Jane
claimed $90,000.00 however, CGI awarded
P20,000.00 to Nelson brother. Merridy Jane is
now claiming the $90,000.00 less the P20,000.00
that Nelson brother received.
Respondents asserted that the NLRC
had no jurisdiction over the action on account of
the absence of employer-employee relationship
between GCI and Nelson at the time of the latter
death. Nelson also had no claims against
petitioners for sick leave allowance/medical
benefit by reason of the completion of his
contract with GCI.
The Labor Arbiter ruled in favor of
petitioner and ordered respondents to pay
P4,621,300.00, the equivalent of US$90,000.00
less P20,000.00, at the time of judgment. The
Labor Arbiter also ruled that the proximate cause
of Nelson death was not work-related.
On appeal, the NLRC affirmed the Labor
Arbiter decision as to the grant of death benefits
under the CBA but reversed the latter ruling as to
the proximate cause of Nelson death.
23
A special civil action for certiorari was
filed with the CA. The appellate court granted the
petition and referred the case to the NCMB for
the appropriate resolution of the issue on the
matter of the applicable CBA provision.
The CA ruled that while the suit filed by
Merridy Jane is a money claim, the same
basically involves the interpretation and
application of the provisions in the subject CBA.
As such, jurisdiction belongs to the voluntary
arbitrator and not the labor arbiter.
ISSUE:
Whether or not the CA committed error in
ruling that the Labor Arbiter has no jurisdiction
over the case?
HELD:
Petitioner contends that Section 10 of
Republic Act (R.A.) 8042, otherwise known as
the Migrant Workers and Overseas Filipinos Act
of 1995, vests jurisdiction on the appropriate
branches of the NLRC to entertain disputes
regarding the interpretation of a collective
bargaining agreement involving migrant or
overseas Filipino workers. Petitioner argues that
the abovementioned Section amended Article
217 (c) of the Labor Code which, in turn, confers
jurisdiction upon voluntary arbitrators over
interpretation or implementation of collective
bargaining agreements and interpretation or
enforcement of company personnel policies.
It is true that R.A. 8042 is a special law
governing overseas Filipino workers. However,
there is no specific provision thereunder which
provides for jurisdiction over disputes or
unresolved grievances regarding the
interpretation or implementation of a CBA.
Section 10 of R.A. 8042, which is cited by
petitioner, simply speaks, in general, of "claims
arising out of an employer-employee relationship
or by virtue of any law or contract involving

Filipino workers for overseas deployment
including claims for actual, moral, exemplary and
other forms of damages."
On the other hand, Articles 217(c) and
261 of the Labor Code are very specific in stating
that voluntary arbitrators have jurisdiction over
cases arising from the interpretation or
implementation of collective bargaining
agreements. Stated differently, the instant case
involves a situation where the special statute
(R.A. 8042) refers to a subject in general, which
the general statute (Labor Code) treats in
particular.
In the present case, the basic issue
raised by Merridy Jane in her complaint filed with
the NLRC is: which provision of the subject CBA
applies insofar as death benefits due to the heirs
of Nelson are concerned. The Court agrees with
the CA in holding that this issue clearly involves
the interpretation or implementation of the said
CBA. Thus, the specific or special provisions of
the Labor Code govern.
In any case, the Court agrees with
petitioner's contention that the CBA is the law or
contract between the parties.
Upon this Court reading of the pertinent
provisions of the CBA, it is clear that the parties
really intended to bring to conciliation or voluntary
arbitration any dispute or conflict in the
interpretation or application of the provisions of
their CBA. It is settled that when the parties have
validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary
arbitration then that procedure should be strictly
observed.
It may not be amiss to point out that the
CBA are in consonance with Rule VII, Section 7
of the present Omnibus Rules and Regulations
Implementing the Migrant Workers and Overseas
Filipinos Act of 1995, as amended by Republic
Act No. 10022, which states that "[f]or OFWs with
collective bargaining agreements, the case shall
be submitted for voluntary arbitration in
24
accordance with Articles 261 and 262 of the
Labor Code." The Court notes that the said
Omnibus Rules and Regulations were
promulgated by the Department of Labor and
Employment (DOLE) and the Department of
Foreign Affairs (DFA) and that these departments
were mandated to consult with the Senate
Committee on Labor and Employment and the
House of Representatives Committee on
Overseas Workers Affairs.
In consultation with the counterparts of
the DOLE in the respective committees of the
Senate and the House of Representatives, as
well as the DFA and the POEA is that with
respect to disputes involving claims of Filipino
seafarers wherein the parties are covered by a
collective bargaining agreement, the dispute or
claim should be submitted to the jurisdiction of a
voluntary arbitrator or panel of arbitrators. It is
only in the absence of a collective bargaining
agreement that parties may opt to submit the
dispute to either the NLRC or to voluntary
arbitration. It is elementary that rules and
regulations issued by administrative bodies to
interpret the law which they are entrusted to
enforce, have the force of law, and are entitled to
great respect. Such rules and regulations partake
of the nature of a statute and are just as binding
as if they have been written in the statute itself.
DENIED
P. SPECIAL CIVIL ACTION; PETITION FOR
REVIEW; REGLEMENTARY PERIODS
205 Wilfredo Y. Antiquina v. Magsaysay
Maritime Corporation and/or Masterbulk Pte.,
Ltd., G.R. No. 168922. April 13, 2011.
Rules of Procedure; liberal construction in
favor of working class.
Petitioner claimed disability benefits
under a Collective Bargaining Agreement that the
respondent employer entered into with a foreign

union. The Court of Appeals refused to admit the
evidence of petitioner showing his membership in
the union on the ground that it was submitted
only with the Motion for Reconsideration. The
Supreme Court, in agreeing to examine the
evidence belatedly submitted by petitioner,
pointed out that technical rules of procedure shall
be liberally construed in favor of the working
class in accordance with the demands of
substantial justice. Rules of procedure and
evidence should not be applied in a very rigid and
technical sense in labor cases in order that
technicalities would not stand in the way of
equitably and completely resolving the rights and
obligations of the parties. Wilfredo Y. Antiquina v.
Magsaysay Maritime Corporation and/or
Masterbulk Pte., Ltd., G.R. No. 168922. April 13,
2011. Disability Benefits; entitlement and burden
of proof. Petitioner suffered a fractured arm while
working on respondent‟s vessel. He filed a
complaint for permanent disa bility benefits,
among others. Petitioner claims that he is entitled
to the higher amount of disability benefits under
the Collective Bargaining Agreement which
respondent entered into with a union of which
petitioner was a member. The Court of Appeals
den ied the petitioner‟s claim. The Supreme
Court, in upholding the Court of Appeals, held
that the burden of proof rests upon the party who
asserts the affirmative of an issue. And in labor
cases, the quantum of proof necessary is
substantial evidence, or such amount of relevant
evidence which a reasonable mind might accept
as adequate to justify a conclusion. Petitioner
had the duty to prove by substantial evidence his
own positive assertions. He did not discharge
this burden of proof when he submitted
photocopied portions of a different CBA with a
different union.
Wilfredo Y. Antiquina v. Magsaysay
Maritime Corporation and/or Masterbulk Pte.,
Ltd., G.R. No. 168922. April 13, 2011. Public
office; casual employees. Respondent was a
25
casual teller who was dismissed from service by
petitioner without being formally charged. On
appeal, the Civil Service Commission (CSC)
upheld the dismissal and reasoned that
respondent was a casual employee, and
therefore her services may be terminated at any
time, without need of a just cause. Upon review,
both the Court of Appeals and the Supreme
Court found that respondent was illegally
terminated. The Supreme Court recognized its
prono uncement in a recent case that “Even a
casual or temporary employee enjoys security of
tenure and cannot be dismissed except for cause
enumerated in Sec. 22, Rule XIV of the Omnibus
Civil Service Rules and Regulations and other
pertinent laws.” However, the Court also went on
to state that, despite this new ruling on casual
employees, it is not the intention of the Court to
make the status of a casual employee at par with
that of a regular employee, who enjoys
permanence of employment. The rule is still that
casual employment will cease automatically at
the end of the period unless renewed. Casual
employees may also be terminated anytime
though subject to certain conditions or
qualifications with reference to the CSC Form No.
001. Thus, they may be laid-off anytime before
the expiration of the employment period provided
any of the following occurs: (1) when their
services are no longer needed; (2) funds are no
longer available; (3) the project has already been
completed/finished; or (4) their performance are
below par. Philippine Charity Sweepstakes
Office Board of Directors and Reynaldo P. Martin
v. Marie Jean C. Lapid, G.R. No. 191940. April
12, 2011. Public office; security of tenure.
Respondent was a casual teller who, having
been found guilty of „Discourtesy in the Course of
Official Duties‟ and of „Grave Misconduct‟, was
dismissed from service by petitioner. On appeal,
the Civil Service Commission (CSC) ruled that
despite lapses in procedural due process
committed by petitioner employer, the dismissal

was proper since respondent belonged to the
category of a casual employee which does not
enjoy security of tenure. Hence, she may be
separated from service at any time, there being
no need to show cause. The Court of Appeals
disagreed and declared the dismissal illegal. The
Supreme Court affirmed the findings of the Court
of Appeals.
In doing so, the Court relied on Section
3(2), Article XIII of the Constitution which
guarantees the rights of all workers to security of
tenure. The Court also recognized its
pronouncement in a recent case that “Even a
casual or temporary employee enjoys security of
tenure and cannot be dismissed except for cause
enumerated in Sec. 22, Rule XIV of the Omnibus
Civil Service Rules and Regulations and other
pertinent laws.”
206 Atok Big Wedge Company vs. Gison, G.R.
No. 169510, August 8, 2011
Facts:
The respondent in this case, Jesus P.
Gison, was engaged as part-time consultant of
the petitioner, Atok Big Wedge Company thorugh
its thenAsst. VP and Acting Resident Manager,
Rutillo A. Torres. As a consultant on retainer
basis, the former assisted the petitioner‘s
retained legal counsel with matters pertaining to
the prosecution of cases against illegal surface
occupants within the area covered by the
company‘s mineralclaims. He also tasked to
perform liason work with government agencies
which he said his expertise. Respondent is not
required to report to itsoffice on a regular basis,
except when occassionally requested by the
management to discuss the matters which needs
of his expertise as aconsultant. He is paid a
retainer fee of 3,000Php a month and delivered
to him either in his residence or in a local
restaurant. They have al soexecuted a retainer
26
agreement however was misplaced and can no
longer be found. This kind of arrangement
continued on for the next 11years. Since
respondent was getting old, he requested
petitioner to cause his registration with the Social
Security System but petitioner did notaccede to
his request considering the former only a
retainer/consultant.
Respondent herein, filed a complaint with
SSS against petitioner‘s refusal to cause his
registration with the SSS. The Resident Manager
of thepetitioner issued then a Memorandum
advising respondent that within 30 days from
receipt thereof, petitioner‘s services as a
retainer/consultant will be terminated since his
services are no longer necessary. As a result,
respondent filed a complaint for illegal dismissal,
unfair labor practice,underpayment of wages,
non-payment of 13th Month pay, vacation pay
and sick leave with the NLRC, Regional
Arbitration Branch and CordilleraAdministrative
Region against the petitioner.
The Labor Arbiter rendered a decision in
favor of the petitioner ruling that there is no
employer-employee relationship and dismissed
thecomplaint for lack of merit. An appeal was
made before the NLRC but same was dismissed
and affirmed the decision of the Labor Arbiter.
A petition for review was filed under Rule
65 before the Court of Appeals. The Court of
Appeals annuled and has set aside the d ecision
of NLRC.The CA opined that, both the Labor
Arbiter and NLRC overlooked Article 280 of the
Labor Code, which distinguishes between the two
kinds ofemployees, i.e., regular and casual
employees. The respondent is deemed a regular
employee of the petitioner after the lapse of one
year fromhis employment. Considering also that
the respondent had been performing services for
the petitioner for the last 11 years en titling him to
therights and privileges of a regular employee.
The CA added that although there was an
agreement between the parties that the

employment of the
respondent will be only temporary, it clearly
disregarded the same by repeatedly giving
petitioner several tasks to perform. Moreover,
althoughthe respondent may have waived his
right to attain a regular status when he agreed to
perform these tasks on a temporary employment
status,still it was the law that recognized and
considered him a regular employee after his first
year of rendering service to petitioner. As such,
thewaiver is ineffective.
Petitioner herein posits that CA erred in
applying Article 280 of the Labor Code in
determining whether there exists an employer-
employeerelationship. Petitioner contends that
where the existence of an employer-employee
relationship is in dispute, Article 280 of the Labor
Code isinapplicable. The said article only set the
distinction between a casual employee from a
regular employee for purposes of determining the
rights
of an employee to be entitled to certain benefits.
Issue:
Whether or not CA erred in applying
Article 280?
Ruling:
Well-entrenched is the doctrine that the
existence of an employer-employee relationship
is ultimately a question of fact and that the
findingsthereon by the Labor Arbiter and the
NLRC shall be accorded not only respect but
even finality when supported by substantial
evidence. Being aquestion of fact, the
determination whether such a relationship exists
between petitioner and respondent was well
within the province of the
Labor Arbiter and the NLRC. Being supported by
substantial evidence, such determination should
have been accorded great weight by the CA
inresolving the issue. To ascertain the existence
of an employer-employee relationship
jurisprudence has invariably adhered to the four-
27
fold test, towit: (1) the selection and engagement
of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to
control theemployee's conduct, or the so-called
"control test." The so-called "control test" is
commonly regarded as the most crucial and
determinativeindicator of the presence or
absence of an employer-employee relationship
Applying the aforementioned test, an employer-
employee relationship is apparently absent in the
case at bar. Among other things, respondentwas
not required to report everyday during regular
office hours of petitioner. Respondent's monthly
retainer fees were paid to him either at
hisresidence or a local restaurant. More
importantly, petitioner did not prescribe the
manner in which respondent would accomplish
any of the tasksin which his expertise as a liaison
officer was needed; respondent was left alone
and given the freedom to accomplish the tasks
using his ownmeans and method. Respondent
was assigned tasks to perform, but petitioner did
not control the manner and methods by which
respondent
performed these tasks. Verily, the absence of the
element of control on the part of the petitioner
engenders a conclusion that he is not
anemployee of the petitioner. Moreover, the
absence of the parties' retainership agreement
notwithstanding, respondent clearly admitted that
petitioner hired him in a limited capacity only and
that there will be no employer-employee
relationship between them.
Respondent was well aware of the
agreement that he was hired merely as a liaison
or consultant of the petitioner and he agreed to
performtasks for the petitioner on a temporary
employment status only. However, respondent
anchors his claim that he became a regular
employee ofthe petitioner based on his
contention that the "temporary" aspect of his job
and its "limited" nature could not have lasted for
eleven years unlesssome time during that period,

he became a regular employee of the petitioner
by continually performing services for the
company.
Respondent is not an employee, much
more a regular employee of petitioner. The
appellate court's premise that regular employees
are thosewho perform activities which are
desirable and necessary for the business of the
employer is not determinative in this case. In fact,
anyagreement may provide that one party shall
render services for and in behalf of another, no
matter how necessary for the latter's business,
evenwithout being hired as an employee.
Hence,respondent's length of service and
petitioner's repeated act of assigning responden t
some tasks to be performed did not result to
respondent's entitlement to the rights and
privileges of a regular employee.
Furthermore, despite the fact that
petitioner made use of the services of respondent
for eleven years, he still cannot be con sidered as
a regularemployee of petitioner. Article 280 of the
Labor Code, in which the lower court used to
buttress its findings that respondent became a
regular employee of the petitioner, is not
applicable in the case at bar. Indeed, the Court
has ruled that said provision is not the yardstick
for determiningthe existence of an employment
relationship because it merely distinguishes
between two kinds of employees, i.e., regular
employees andcasual employees, for purposes
of determining the right of an employee to certain
benefits, to join or form a union, or to security of
tenure; itdoes not apply where the existence of
an employment relationship is in dispute.It is,
therefore, erroneous on the part of the Court of
Appeals torely on Article 280 in determining
whether an employer-employee relationship
exists between respondent and the petitioner.
Considering that there is no employer-
employee relationship between the parties, the
termination of respondent's services by the
petitioner afterdue notice did not constitute illegal
28
dismissal warranting his reinstatement and the
payment of full backwages, allowances and other
benefits.
Q. SUPREME COURT PROCEDURE
207 ATLANTA INDUSTRIES, INC. and/or
ROBERT CHAN, petitioners, vs. APRILITO R.
SEBOLINO, KHIM V. COSTALES, ALVIN V.
ALMONTE, and JOSEPH H. SAGUN,
respondents.
FACTS:
Sebolino et al. filed several complaints
for illegal dismissal, regularization,
underpayment, nonpayment of wages and other
money claims as well as damages. They alleged
that they had attained regular status as they were
allowed to work with Atlanta for more than six (6)
months from the start of a purported
apprenticeship agreement between them and the
company. They claimed that they were illegally
dismissed when the apprenticeship agreement
expired.
In defense, Atlanta and Chan argued that
the workers were not entitled to regularization
and to their money claims because they were
engaged as apprentices under a government-
approved apprenticeship program. The company
offered to hire them as regular employees in the
event vacancies for regular positions occur in the
section of the plant where they had trained. They
also claimed that their names did not appear in
the list of employees (Master List) prior to their
engagement as apprentices.
The Labor Arbiter found the dismissal to
be illegal with respect to nine out of the twelve
complainants. Atlanta appealed the decision to
the NLRC which reversed the illegal dismissal
decision with respect to Sebolino and three
others. They moved for reconsideration but this
was denied. They then brought the case up to the

Court of Appeals, which held that Sebolino and
the three others were illegally dismiised.
The CA ruled that Sebolino and the three
others were already employees of the company
before they entered into the first and second
apprenticeship agreements. For example,
Sebolino was employed by Atlanta on March 3,
2004 then he entered into his first apprenticeship
agreement with the company on March 20, 2004
to August 19, 2004. The second apprenticeship
agreement was from May 28, 2004 to October 8,
2004. However, the CA found the apprenticeship
agreements to be void because they were
executed in violation of the law and the rules.
Therefore, in the first place, there were no
apprenticeship agreements.
Also, the positions occupied by the
respondents machine operator, extruder operator
and scaleman are usually necessary and
desirable in the manufacture of plastic building
materials, the companys main business. Sebolino
and the three others were, therefore, regular
employees whose dismissals were illegal for lack
of a just or authorized cause and notice.
ISSUE:
Whether or not the CA erred in ruling
that Sebolino and three others were illegally
dismissed.
HELD:
The petition is unmeritorious.
LABOR LAW - Illegal dismissals
The CA committed no reversible error in
nullifying the NLRC decision and in affirming the
labor arbiters ruling, as it applies toCostales,
Almoite, Sebolino and Sagun. Specifically, the
CA correctly ruled that the four were illegally
dismissed because (1) they were already
employees when they were required to undergo
apprenticeship and (2) apprenticeship
agreements were invalid.
29
The following considerations support the
CA ruling.
FBased on company operations at the
time material to the case, Costales, Almoite,
Sebolino and Sagun were already rendering
service to the company as employees before
they were made to undergo apprenticeship. The
company itself recognized the respondents status
through relevant operational records in the case
of Costales and Almoite, the CPS monthly report
for December 2003 which the NLRC relied upon
and, for Sebolino and Sagun, the production and
work schedule for March 7 to 12, 2005 cited by
the CA.
The CA correctly recognized the
authenticity of the operational documents, for the
failure of Atlanta to raise a challenge against
these documents before the labor arbiter, the
NLRC and the CA itself. The appellate court,
thus, found the said documents sufficientto
establish the employment of the respondents
before their engagement as apprentices.
The fact that Sebolino and the three
others were already rendering service to the
company when they were made to undergo
apprenticeship (as established by the evidence)
renders the apprenticeship agreements irrelevant
as far as the four are concerned. This reality is
highlighted by the CA finding that the
respondents occupied positions such as machine
operator, scaleman and extruder operator - tasks
that are usually necessary and desirable in
Atlantas usual business or trade as manufacturer
of plastic building materials. These tasks and
their nature characterized the four as regular
employees under Article 280 of the Labor
Code.Thus, when they were dismissed without
just or authorized cause, without notice, and
without the opportunity to be heard, their
dismissal was illegal under the law.

208 Prince Transport, Inc. and Mr. Renato
Claros v. Diosdado Garcia, Luisito Garcia, Et.
Al.
G.R. No. 167291, January 12, 2011
FACTS:
Prince Transport, Inc. (PTI), is a
company engaged in the business of transporting
passengers by land; respondents were hired
either as drivers, conductors, mechanics or
inspectors, except for respondent Diosdado
Garcia (Garcia), who was assigned as
Operations Manager. Sometime in October 2007
the commissions received by the respondents
were reduced to 7 to 9% from 8 to 10%. This led
respondents and other employees of PTI to hold
a series of meetings to discuss the protection of
their interests as employees. Ranato Claros,
president of PTI, made known to Garcia his
objections to the formation of a union and in
order to block the continued formation of the
union, PTI caused the transfer of all union
members and sympathizers to one of its sub-
companies, Lubas Transport (Lubas). The
business of Lubas deteriorated because of the
refusal of PTI to maintain and repair the units
being used therein, which resulted in the virtual
stoppage of its operations and respondents' loss
of employment. Hence, the respondent-
employees filed complaints against PTI for illegal
dismissal and unfair labor practice. PTI
contended that it has nothing to do with the
management and operations of Lubas as well as
the control and supervision of the latter's
employees.
ISSUE:
Whether or not the order to reinstate
respondents was valid considering that the issue
of reinstatement was never brought up before the
CA and respondents never questioned the award
of separation pay.
30
HELD:
YES. It is clear from the complaints filed
by respondents that they are seeking
reinstatement. Section 2 (c), Rule 7 of the Rules
of Court provides that a pleading shall specify the
relief sought, but may add a general prayer for
such further or other reliefs as may be deemed
just and equitable. Under this rule, a court can
grant the relief warranted by the allegation and
the proof even if it is not specifically sought by
the injured party; the inclusion of a general prayer
may justify the grant of a remedy different from or
together with the specific remedy sought, if the
facts alleged in the complaint and the evidence
introduced so warrant. The general prayer is
broad enough “to justify extension of a remedy
different from or together with the specific remedy
sought.” Even without the prayer for a specific
remedy, proper relief may be granted by the court
if the facts alleged in the complaint and the
evidence introduced so warrant. The court shall
grant relief warranted by the allegations and the
proof even if no such relief is prayed for. The
prayer in the complaint for other reliefs equitable
and just in the premises justifies the grant of a
relief not otherwise specifically prayed for. In the
instant case, aside from their specific prayer for
reinstatement, respondents, in their separate
complaints, prayed for such reliefs which are
deemed just and equitable.
209 The Heritage Hotel Manila vs.
NATIONAL UNION OF WORKERS IN THE
HOTEL, RESTAURANT AND ALLIED
INDUSTRIES-HERITAGE HOTEL MANILA
SUPERVISORS CHAPTER (NUWHRAIN-
HHMSC) G.R. No. 178296, January 12, 2011
FACTS:
The respondent’s petition for certification
election was granted. Petitioner then discovered t
hat respondent had failed to submit to the Bureau

of Labor Relations (BLR) its annual financial rep
ort for several years and the list of its members si
nce it filed its registration papers in 1995. Conseq
uently, it filed a Petition for Cancellation of Regist
ration of respondent, on the ground of the nonsub
mission of the said documents. Petitioner prayed
that respondent’s Certificate of Creation of Local/
Chapter be cancelled and its name be deleted fro
m the list of legitimate labor organizations. It furth
er requested the suspension of the certification el
ection proceedings. Nevertheless, the certificatio
n election pushed through and the respondent wo
n.
The Regional Director of DOLENCR and
DOLE Secretary both held that constitutionally gu
aranteed freedom of association and right of work
ers to selforganization outweighed respondent’s
noncompliance with the statutory requirements to
maintain its status as a legitimate labor organizat
ion.
ISSUE:
Whether or not the failure to comply with
the statutory requirement(filing financial reports a
nd the list of its members) sufficient ground for th
e cancellation of registration of the respondent as
a labor union.
HELD:
No, the noncompliance should not be a g
round for the cancellation. Articles 238 and 239 o
f the Labor Code provide that failure to file financi
al reports and the list of its members are grounds
for the cancellation of Union Organization. Howe
ver, consideration must be taken of the fundamen
tal rights guaranteed by Article XIII, Section 3 of t
he Constitution, i.e., the rights of all workers to se
lforganization, collective bargaining and negotiati
ons, and peaceful concerted activities. Labor aut
horities should bear in mind that registration conf
ers upon a union the status of legitimacy and the
concomitant right and privileges granted by law to
a legitimate labor organization, particularly the ri
31
ght to participate in or ask for certification election
in a bargaining unit. Thus, the cancellation of a c
ertificate of registration is the equivalent of snuffin
g out the life of a labor organization. For without s
uch registration, it loses as a rule its rights under
the Labor Code.
Furthermore, that the Labor Code’s provi
sions on cancellation of union registration and on
reportorial requirements have been recently ame
nded by Republic Act (R.A.) No. 9481, An Act Str
engthening the Workers’ Constitutional Right to S
elfOrganization, Amending for the Purpose Presi
dential Decree No. 442, As Amended, Otherwise
Known as the Labor Code of the Philippines, whi
ch says that failure to file financial reports and list
of union members shall not be a ground for canc
ellation of union registration but shall subject the
erring officers or members to suspension, expulsi
on from membership, or any appropriate penalty.
210 NELSON A. CULILI, Petitioner, v.
EASTERN TELECOMMUNICATIONS
PHILIPPINES, INC., SALVADOR HIZON
(President and Chief Executive Officer),
EMILIANO JURADO (Chairman of the Board),
VIRGILIO GARCIA (Vice President) and
STELLA GARCIA (Assistant Vice President),
Respondents.
FACTS:
Respondent Eastern
Telecommunications Philippines, Inc. (ETPI) is a
telecommunications company engaged mainly in
the business of establishing commercial
telecommunications systems and leasing of
international datalines or circuits that pass
through the international gateway facility (IGF).
The other respondents are ETPIs officers.
Petitioner Nelson A. Culili was employed
by ETPI as a Technician in its Field Operations
Department in 1981. In 1996, Culili was promoted
to Senior Technician in the Customer Premises

Equipment Management Unit of the Service
Quality Department.
As a telecommunications company and
an authorized IGF operator, ETPI was required,
under RA No. 7925 and EO No. 109, to establish
landlines in Metro Manila and certain provinces.
However, due to interconnection problems with
the PLDT, poor subscription and cancellation of
subscriptions, and other business difficulties,
ETPI was forced to halt its roll out of 129,000
landlines already allocated to a number of its
employees.
In 1998, due to business troubles and
losses, ETPI was compelled to implement a
Right-Sizing Program which consisted of two
phases: the first phase involved the reduction of
ETPIs workforce to only those employees that
were necessary and which ETPI could sustain;
the second phase entailed a company-wide
reorganization which would result in the transfer,
merger, absorption or abolition of certain
departments of ETPI.
As part of the first phase, ETPI offered to
its employees who had rendered at least fifteen
years of service, the Special Retirement
Program, which consisted of the option to
voluntarily retire at an earlier age and a
retirement package equivalent to two and a half
(2) months salary for every year of service. This
offer was initially rejected by the Eastern
Telecommunications Employees Union (ETEU),
ETPIs duly recognized bargaining agent, which
threatened to stage a strike. ETPI explained to
ETEU the exact details of the Right-Sizing
Program and the Special Retirement Program
and after consultations with ETEUs members,
ETEU agreed to the implementation of both
programs. Thus, ETPI re-offered the Special
Retirement Program and the corresponding
retirement package to the one hundred two (102)
employees who qualified for the program. Of all
the employees who qualified to avail of the
program, only Culili rejected the offer.
32
Among the departments abolished was
the Service Quality Department. The functions of
the Customer Premises Equipment Management
Unit, Culilis unit, were absorbed by the Business
and Consumer Accounts Department. As a
result, Culilis position was abolished due to
redundancy and his functions were absorbed by
the Business and Consumer Accounts
Department.
ETPI, through its Assistant Vice
President Stella Garcia, informed Culili of his
termination from employment effective April 8,
1999.
Culili alleged that neither he nor the
DOLE were formally notified of his termination.
Culili believed that ETPI had already decided to
dismiss him even prior to the March 8, 1999
letter. Moreover, Culili asserted that ETPI had
contracted out the services he used to perform to
a labor-only contractor which not only proved that
his functions had not become unnecessary, but
which also violated their Collective Bargaining
Agreement (CBA) and the Labor Code. Aside
from these, Culili also alleged that he was
discriminated against when ETPI offered some of
his co-employees an additional benefit in the
form of motorcycles to induce them to avail of the
Special Retirement Program, while he was not.
ETPI denied singling Culili out for
termination. ETPI claimed that because there
was no more work for Culili, it was constrained to
serve a final notice of termination to Culili, which
Culili ignored. Thus, on March 26, 1999, ETPI
tendered to Culili his final pay check of
P859,033.99 consisting of his basic salary,
leaves, 13th month pay and separation pay. ETPI
claimed that Culili refused to accept his
termination and continued to report for work.
Culili filed a complaint against ETPI and
its officers for illegal dismissal, unfair labor
practice, and money claims before the Labor
Arbiter.

The Labor Arbiter found ETPI guilty of
illegal dismissal and unfair labor practice.
On appeal, the NLRC affirmed the Labor
Arbiters decision but modified the amount of
moral and exemplary damages awarded.
The Court of Appeals found that Culilis
position was validly abolished due to redundancy.
It further held that ETPI cannot be held guilty of
unfair labor practice as mere contracting out of
services being performed by union members
does not per se amount to unfair labor practice
unless it interferes with the employees right to
self-organization. Hence, this petition.
ISSUE:
Whether or not Culili is illegally
dismissed.
HELD:
The decision of the Court of Appeals
is sustained.
LABOR LAW
There is redundancy when the service
capability of the workforce is greater than what is
reasonably required to meet the demands of the
business enterprise. A position becomes
redundant when it is rendered superfluous by any
number of factors such as over-hiring of workers,
decrease in volume of business, or dropping a
particular product line or service activity
previously manufactured or undertaken by the
enterprise. Soriano, Jr. v. NLRC, G.R. No.
165594, April 23, 2007
This Court also held that the following
evidence may be proffered to substantiate
redundancy: the new staffing pattern, feasibility
studies/ proposal on the viability of the newly
created positions, job description and the
approval by the management of the restructuring.
In the case at bar, ETPI was upfront with
its employees about its plan to implement a
Right-Sizing Program. Even in the face of initial
opposition from and rejection of the said program
33
by ETEU, ETPI patiently negotiated with ETEUs
officers to make them understand ETPIs
business dilemma and its need to reduce its
workforce and streamline its organization. This
evidently rules out bad faith on the part of ETPI.
The records show that ETPI had
sufficiently established not only its need to
reduce its workforce and streamline its
organization, but also the existence of
redundancy in the position of a Senior
Technician. ETPI explained how it failed to meet
its business targets and the factors that caused
this, and how this necessitated it to reduce its
workforce and streamline its organization. ETPI
also submitted its old and new tables of
organization and sufficiently described how
limited the functions of the abolished position of a
Senior Technician were and how it decided on
whom to absorb these functions.
LABOR LAW
Although the Court finds Culilis dismissal
was for a lawful cause and not an act of unfair
labor practice, ETPI, however, was remiss in its
duty to observe procedural due process in
effecting the termination of Culili.
For termination of employment as
defined in Article 283 of the Labor Code, the
requirement of due process shall be deemed
complied with upon service of a written notice to
the employee and the appropriate Regional
Office of the Department of Labor and
Employment at least thirty days before effectivity
of the termination, specifying the ground or
grounds for termination.
ETPI does not deny its failure to provide
DOLE with a written notice regarding Culilis
termination. It, however, insists that it has
complied with the requirement to serve a written
notice to Culili as evidenced by his admission of
having received it and forwarding it to his union
president.
The Court of Appeals, in finding that
Culili was not afforded procedural due process,

held that Culilis dismissal was ineffectual, and
required ETPI to pay Culili full backwages in
accordance with our decision in Serrano v.
NLRC, 387 Phil. 345 (2000).
Hence, since it has been established that
Culilis termination was due to an authorized
cause and cannot be considered unfair labor
practice on the part of ETPI, his dismissal is
valid. However, in view of ETPIs failure to comply
with the notice requirements under the Labor
Code, Culili is entitled to nominal damages in
addition to his separation pay.DENIED.
211 Barroga vs. Data Center College, G.R. No.
174158, June 27, 2011
Facts:
On November 11, 1991, petitioner was
employed as an Instructor in Data Center College
Laoag City branch in Ilocos Norte. In a
Memorandumdated June 6, 1992, respondents
transferred him to University of Northern
Philippines (UNP) in Vigan, Ilocos Sur where the
school had a tie-upprogram. Petitioner was
informed through a letter dated June 6, 1992 that
he would be receiving, in addition to his monthly
salary, a P1,200.00allowance for board and
lodging during his stint as instructor in UNP-
Vigan. In 1994, he was recalled to Laoag
campus. On October 3, 2003,petitioner received
a Memorandum transferring him to Data Center
College Bangued, Abra branch as Head for
Education/Instructor due to anurgent need for an
experienced officer and computer instructor
thereat.
However, petitioner declined to accept
his transfer to Abra citing the deteriorating health
condition of his father and the absence of
additionalremuneration to defray expenses for
board and lodging which constitutes implicit
diminution of his salary.
On November 10, 2003, petitioner filed a
Complaint for constructive dismissal against
respondents. Petitioner alleged that his proposed
34
transferto Abra constitutes a demotion in rank
and diminution in pay and would cause personal
inconvenience and hardship.
For their part, respondents claimed that they
were merely exercising their management
prerogative to transfer employees for the purpose
ofadvancing the school‘s interests. They argued
that petitioner‘s refusal to be transferred to Abra
constitutes insubordination.
Ruling:
Petitioner‘s transfer is not tantamount to
constructive dismissal.Petitioner was originally
appointed as instructor in 1991 and was given
additional administrative functions as Head for
Education during his stintin Laoag branch. He did
not deny having been designated as Head for
Education in a temporary capacity for which he
cannot invoke any tenurial
security. Hence, being temporary in character,
such designation is terminable at the pleasure of
respondents who made such appointment.
Moreover, respondents‘ right to transfer
petitioner rests not only on contractual stipulation
but also on jurisprudential authorities. The
LaborArbiter and the NLRC both relied on the
condition laid down in petitioner‘s employment
contract that respondents have the prerogative to
assignpetitioner in any of its branches or tie-up
schools as the necessity demands. In any event,
it is management prerogative for employers to
transfer
employees on just and valid grounds such as
genuine business necessity. It is also important
to stress at this point that respondents have
shownthat it was experiencing some financial
constraints. Because of this, respondents opted
to temporarily suspend the post-graduate studies
ofpetitioner and some other employees who were
given scholarship grants in order to prioritize
more important expenditures.

212 HYPTE R. AUJERO v. PHILIPPINE
COMMUNICATIONS SATELLITE
CORPORATION G.R. No. 193484, 18 January
2012, SECOND DIVISION (Perez, J.)
FACTS:
Absent any evidence that any of the
vices of consent is present, the quitclaim
executed by a party constitutes a valid and
binding agreement. Petitioner Hypte Aujero was
the Vice President of respondent company
Philippine Communications Satellite Corporation
(Philcomsat). After 34 years, he applied for an
early retirement which was approved. This
entitled Aujero to receive his retirement benefits
at a rate equivalent to one and a half of his
monthly salary for every year of service. Aujero
subsequently executed a Deed of Release and
Quitclaim in Philcomsat’s favor following his
receipt from the latter of a check in the amount of
P9,439,327.91. After 3 years, Aujero filed a
complaint for unpaid retirement benefits claiming
that the actual amount of his retirement pay is
P14,015,055.00. Aujero contends that the
significantly deficient amount he previously
received was more than an enough reason to
declare his quitclaim null and void. Aujero further
claimed that he had no choice but to accept the
lesser amount as he was in dire need of money.
The Labor Arbiter (LA) ruled in favor of Aujero
and directed Philcomsat to pay the balance of his
retirement pay. The LA maintained that
Philcomsat failed to substantiate its claim that the
amount received by Aujero was a product of
negotiations between the parties. On appeal, the
National Labor Relations Commissions (NLRC)
reversed the decision of the LA and decided in
favor of Philcomsat. The Court of Appeals
affirmed the decision of the NLRC.
ISSUE:
Whether the quitclaim executed by the
petitioner in Philcomsat’s favor is valid, thereby
35
foreclosing his right to institute any claim against
Philcomsat
HELD:
Petition GRANTED. While the law looks
with disfavor upon releases and quitclaims by
employees who are inveigled or pressured into
signing them by unscrupulous employers seeking
to evade their legal responsibilities, a legitimate
waiver representing a voluntary settlement of a
laborer's claims should be respected by the
courts as the law between the parties.
Considering Aujero’s claim of fraud and bad faith
against Philcomsat to be unsubstantiated, the
Court finds the quitclaim in dispute to be
legitimate waiver. That Aujero was all set to
return to his hometown and was in dire need of
money would likewise not qualify as undue
pressure sufficient to invalidate the quitclaim.
Dire necessity may be an acceptable ground to
annul quitclaims if the consideration is
unconscionably low and the employee UST Law
Review, Vol. LVII No. 1, November 2012 was
tricked into accepting it, but is not an acceptable
ground for annulling the release when it is not
shown that the employee has been forced to
execute it. While it is the Court’s duty to prevent
the exploitation of employees, it also behooves
this Court to protect the sanctity of contracts that
do not contravene our laws.
Aujero’s educational background and
employment stature render it improbable that he
was pressured, intimidated or inveigled into
signing the subject quitclaim. The Court cannot
permit the petitioner to relieve himself from the
consequences of his act, when his knowledge
and understanding thereof is expected. Also, the
period of time that Aujero allowed to lapse before
filing a complaint to recover the supposed
deficiency in his retirement pay clouds his
motives, leading to the reasonable conclusion
that his claim of being aggrieved is a mere
afterthought, if not a mere pretention

XII. RIGHT TO SELF-ORGANIZATION
213 SAN MIGUEL FOODS, INCORPORATED
VS SAN MIGUEL CORPORATION
SUPERVISORS and EXEMPT UNION G.R. No.
146206
FACTS:
In the case of San Miguel Corporation
Supervisors and Exempt Union v. Laguesma, the
Court held that even if they handle confidential
data regarding technical and internal business
operations, supervisory employees 3 and 4 and
the exempt employees of petitioner San Miguel
Foods, Inc. are not to be considered confidential
employees, because the same do not pertain to
labor relations, particularly, negotiation and
settlement of grievances. Consequently, they
were allowed to form an appropriate bargaining
unit for the purpose of collective bargaining. The
Court also declared that the employees
belonging to the three different plants of San
Miguel Corporation Magnolia Poultry Products
Plants in Cabuyao, San Fernando, and Otis,
having community or mutuality of interests,
constitute a single bargaining unit.
A certification election was conducted.
On the date of the election, petitioner filed the
Omnibus Objections and Challenge to Voters,
questioning the eligibility to vote by some of its
employees on the grounds that some employees
do not belong to the bargaining unit which
respondent seeks to represent or that there is no
existence of employer-employee relationship with
petitioner.
Based on the results of the election, the
Med-Arbiter issued the Order stating that since
the Yes vote received 97% of the valid votes
cast, respondent is certified to be the exclusive
bargaining agent of the supervisors and exempt
employees of petitioner's Magnolia Poultry
36
Products Plants in Cabuyao, San Fernando, and
Otis.
On appeal, the then Acting DOLE
Undersecretary, in the Resolution, affirmed the
Order of the Med-Arbiter.
CA affirmed the Resolution of DOLE
Undersecretary with modification stating that
those holding the positions of Human Resource
Assistant and Personnel Assistant are excluded
from the bargaining unit.
Hence, this petition by the San Miguel
Foods
ISSUE:
W/N CA departed from jurisprudence
when it expanded the scope of the bargaining
unit.
RULING:
No. In San Miguel vs Laguesma, the
Court explained that the employees of San
Miguel Corporation Magnolia Poultry Products
Plants of Cabuyao, San Fernando, and Otis
constitute a single bargaining unit, which is not
contrary to the one-company, one-union policy.
An appropriate bargaining unit is defined as a
group of employees of a given employer,
comprised of all or less than all of the entire body
of employees, which the collective interest of all
the employees, consistent with equity to the
employer, indicate to be best suited to serve the
reciprocal rights and duties of the parties under
the collective bargaining provisions of the law.
It held that while the existence of a
bargaining history is a factor that may be
reckoned with in determining the appropriate
bargaining unit, the same is not decisive or
conclusive. Other factors must be considered.
The test of grouping is community or mutuality of
interest. This is so because the basic test of an
asserted bargaining unit’s acceptability is
whether or not it is fundamentally the
combination which will best assure to all
employees the exercise of their collective

bargaining rights. Certainly, there is a mutuality of
interest among the employees. Their functions
mesh with one another. One group needs the
other in the same way that the company needs
them both. There may be differences as to the
nature of their individual assignments, but the
distinctions are not enough to warrant the
formation of a separate bargaining unit.
The Court affirms the finding of the CA
that there should be only one bargaining unit for
the employees in Cabuyao, San Fernando, and
Otis of Magnolia Poultry Products Plant involved
in dressed chicken processing and Magnolia
Poultry Farms engaged in live chicken
operations. Certain factors, such as specific line
of work, working conditions, location of work,
mode of compensation, and other relevant
conditions do not affect or impede their
commonality of interest. Although they seem
separate and distinct from each other, the
specific tasks of each division are actually
interrelated and there exists mutuality of interests
which warrants the formation of a single
bargaining unit.
DISPOSITIVE:
Respondent won
DOCTRINE:
An appropriate bargaining unit is defined
as a group of employees of a given employer,
comprised of all or less than all of the entire body
of employees, which the collective interest of all
the employees, consistent with equity to the
employer, indicate to be best suited to serve the
reciprocal rights and duties of the parties under
the collective bargaining provisions of the law.
It held that while the existence of a
bargaining history is a factor that may be
reckoned with in determining the appropriate
bargaining unit, the same is not decisive or
conclusive. Other factors must be considered.
The test of grouping is community or mutuality of
37
interest. This is so because the basic test of an
asserted bargaining unit’s acceptability is
whether or not it is fundamentally the
combination which will best assure to all
employees the exercise of their collective
bargaining rights. Certainly, there is a mutuality of
interest among the employees. Their functions
mesh with one another. One group needs the
other in the same way that the company needs
them both. There may be differences as to the
nature of their individual assignments, but the
distinctions are not enough to warrant the
formation of a separate bargaining unit.
214-215 CIRTEK EMPLOYEES LABOR UNION-
FEDERATION OF FREE WORKERS,
Petitioner, v. CIRTEK ELECTRONICS, INC.,
Respondent.
FACTS:
Prior to the 3rd year of the CBA of
respondent and petitioner, the parties
renegotiated its economic provisions but failed to
reach a settlement, particularly on the issue of
wage increases. Petitioner thereupon declared a
bargaining deadlock and filed a Notice of Strike.
Respondent, upon the other hand, filed a Notice
of Lockout.
In the meantime, as amicable settlement
of the CBA was deadlocked, petitioner went on
strike. The Secretary of Labor assumed
jurisdiction over the controversy and issued a
Return to Work Order which was complied with.
Before the Secretary of Labor could rule
on the controversy, respondent created a Labor
Management Council through which it concluded
with the remaining officers of petitioner a
Memorandum of Agreement providing for daily
wage increases.
The Secretary of Labor resolved the CBA
deadlock by awarding a wage increase.

Respondent moved for a reconsideration
of the Decision stating that the union members
were waiving their rights and benefits under the
Secretarys Decision. Reconsideration of the
Decision was denied. Hence, respondent filed a
petition for certiorari before the Court of Appeals.
The appellate court ruled in favor of
respondent and accordingly set aside the
Decision of the Secretary of Labor. It held that
the Secretary of Labor gravely abused his
discretion in not respecting the MOA.
ISSUE:
Whether or not the Secretary of Labor is
authorized to give an award higher than that
agreed upon in the MOA?
HELD
LABOR LAW
It is well-settled that the Secretary of
Labor, in the exercise of his power to assume
jurisdiction under Art. 263 (g) of the Labor Code,
may resolve all issues involved in the controversy
including the award of wage increases and
benefits. While an arbitral award cannot per sebe
categorized as an agreement voluntarily entered
into by the parties because it requires the
intervention and imposing power of the State thru
the Secretary of Labor when he assumes
jurisdiction, the arbitral award can be considered
an approximation of a collective bargaining
agreement which would otherwise have been
entered into by the parties, hence, it has the force
and effect of a valid contract obligation.
That the arbitral award was higher than
that which was purportedly agreed upon in the
MOA is of no moment. For the Secretary, in
resolving the CBA deadlock, is not limited to
considering the MOA as basis in computing the
wage increases. He could, as he did, consider
the financial documents submitted by respondent
as well as the parties bargaining history and
38
respondents financial outlook and improvements
as stated in its website.
It bears noting that since the filing and
submission of the MOA did not have the effect of
divesting the Secretary of his jurisdiction, or of
automatically disposing the controversy, then
neither should the provisions of the MOA restrict
the Secretarys leeway in deciding the matters
before him.
While a contract constitutes the law
between the parties, this is so in the present case
with respect to the CBA, not to the MOA in which
even the unions signatories had expressed
reservations thereto. But even assuming
arguendo that the MOA is treated as a new CBA,
since it is imbued with public interest, it must be
construed liberally and yield to the common
good.
While the terms and conditions of a CBA
constitute the law between the parties, it is not,
however, an ordinary contract to which is applied
the principles of law governing ordinary contracts.
A CBA, as a labor contract within the
contemplation of Article 1700 of the Civil Code of
the Philippines which governs the relations
between labor and capital, is not merely
contractual in nature butimpressed with public
interest, thus, it must yield to the common good.
As such, it must be construed liberally rather than
narrowly and technically, and the courts must
place apractical and realistic construction upon it,
giving due consideration to the context in which it
is negotiated and purpose which it is intended to
serve.
GRANTED
216 THE HERITAGE HOTEL
MANILA v. NATIONAL UNION OF WORKERS
IN THE HOTEL, RESTAURANT AND ALLIED
INDUSTRIES-HERITAGE HOTEL MANILA
SUPERVISORS CHAPTER (NUWHRAIN-
HHMSC)

FACTS:
Respondents filed a petition for
certification of pre-election with the DOLE. The
Med-Arbiter approved the pre-election. However,
the certification election was delayed, but pushed
through nonetheless. Petitioner filed for
cancellation of the certification due to the failure
of respondent to submit its financial statements to
the Bureau of Labor Relations. The Med-Arbiter
still ruled in favor of respondents. Petitioner
appealed the decision to the regional director of
the DOLE. The Regional director still rendered a
decision in favor of respondents, which prompted
petitioners to appeal the decision to the director
of the Bureau of Labor Relations. The director of
the BLR inhibited from the issue, as he was
previously the counsel of respondents. The
Secretary of Labor resolved the issue in the
stead of the BLR director. She ruled in favor of
respondents. The petitioner filed a motion for
reconsideration of the decision, but was turned
down. Petitioner then filed for certiorari,
challenging the jurisdiction of the DOLE
Secretary. An appeal from the decision of the
Regional Director is supposed to be under the
jurisdiction of the BLR. Also, petitioner claims to
have been deprived of due process as it was not
informed of the inhibition of the BLR director.
ISSUES:
Is the ruling of the secretary of labor
valid?
Was petitioner deprived of due
process?
HELD:
It is without question that the appeal from
the decision of the regional office is within the
jurisdiction of the BLR. Given the circumstances,
the BLR director inhibited himself. Petitioner
insists that the case should have gone to the
subordinates of the BLR director. However, this
39
happens in cases where the director is
incapacitated. This does not obtain as the
director merely inhibited himself. On the other
hand, the Secretary of DOLE has powers of
supervision and control over the BLR. As such, it
may validly step into the shoes of the BLR
director and resolve the issue.
The concept of due-process is different
in proceedings before the courts, and before
administrative agencies. For the latter, the
essence is the opportunity to be heard. In this
case, the petitioner was able to file a motion for
reconsideration on the decision of the DOLE
Secretary, albeit was denied. Petitioner was
given due-process, and its contention that it was
unaware of the inhibition of the BLR director is of
no moment.
217 SAMAHANG MANGGAGAWA SA
CHARTER CHEMICAL SOLIDARITY OF
UNIONS IN THE PHILIPPINES FOR
EMPOWERMENT AND REFORMS (SMCC-
SUPER), ZACARRIAS JERRY VICTORIO
Union President, Petitioner, v. CHARTER
CHEMICAL AND COATING CORPORATION,
Respondent.
FACTS:
Samahang Manggagawasa Charter
Chemical Solidarity of Unions in the Philippines
for Empowerment and Reforms (petitioner union)
filed a petition for certification election among the
regular rank-and-file employees of Charter
Chemical and Coating Corporation (respondent
company) with the Mediation Arbitration Unit of
the DOLE. Respondent company opposedon the
ground that petitioner union is not a legitimate
labor organization because of failure to comply
with the documentation requirements set by law
the charter certificate was not executed under
oath, and the inclusion of supervisory employees
within petitioner union. The Med-Arbiter

dismissed the petition. The DOLE, on appeal,
granted the petition for certification election but
the CA reversed the DOLE decision. The
appellate court gave credence to the findings of
the Med-Arbiter.
Petitioner union claims that the litigation
of the issue as to its legal personality to file the
subject petition for certification election is barred
by the Decision of the DOLE. In this decision, the
DOLE ruled that petitioner union complied with all
the documentation requirements and that there
was no independent evidence presented to prove
an illegal mixture of supervisory and rank-and-file
employees in petitioner union. After the
promulgation of this Decision, respondent
company did not move for reconsideration, thus,
this issue must be deemed settled.
ISSUE:
Whether or not petitioner union has legal
personality to file for a petition for certification
election.
HELD:
Court of Appeals decision is
LABOR LAW
The right to file a petition for certification
election is accorded to a labor organization
provided that it complies with the requirements of
law for proper registration. The inclusion of
supervisory employees in a labor organization
seeking to represent the bargaining unit of rank-
and-file employees does not divest it of its status
as a legitimate labor organization.
Petitioner unions charter certificate need
not be executed under oath. Consequently, it
validly acquired the status of a legitimate labor
organization upon submission of (1) its charter
certificate,(2) the names of its officers, their
addresses, and its principal office,and (3) its
constitution and by-laws the last two
requirements having been executed under oath
40
by the proper union officials as borne out by the
records.
Petitioner union correctly argues that its
legal personality cannot be collaterally attacked
in the certification election proceedings.
GRANTED.
218 LEGEND INTERNATIONAL RESORTS
LIMITED, Petitioner, v. KILUSANG
MANGGAGAWA NG LEGENDA (KML-
INDEPENDENT), Respondent.
FACTS:
KML filed with the Med-Arbitration Unit of
the DOLE, San Fernando, Pampanga, a Petition
for Certification Election. LEGEND moved to
dismiss the petition alleging that KML is not a
legitimate labor organization because its
membership is a mixture of rank and file and
supervisory employees in violation of Article 245
of the Labor Code. KML argued that even if 41 of
its members are indeed supervisory employees
and therefore excluded from its membership, the
certification election could still proceed because
the required number of the total rank and file
employees necessary for certification purposes is
still sustained. KML also claimed that its
legitimacy as a labor union could not be
collaterally attacked in the certification election
proceedings but only through a separate and
independent action for cancellation of union
registration.
The Med-Arbiter rendered judgment
dismissing for lack of merit the petition for
certification election. Since Article 245 of the
Labor Code expressly prohibits supervisory
employees from joining the union of rank and file
employees, the Med-Arbiter concluded that KML
is not a legitimate labor organization.
The Office of the Secretary of DOLE
rendered its Decision granting KML’s appeal
thereby reversing and setting aside the Med-

Arbiter’s Decision. The Office of the Secretary of
DOLE held that KML’s legitimacy as a union
could not be collaterally attacked. It declared that
any violation of the provision of Article 245 does
not ipso facto render the existence of the labor
organization illegal.
LEGEND filed a Petition for Certiorari
with the Court of Appeals , which found no grave
abuse of discretion on the part of the Office of the
Secretary of DOLE. LEGEND filed a Petition for
Certiorari with the Court of Appeals. held that the
issue on the legitimacy of KML as a labor
organization has already been settled with finality
in Case No. RO300-0108-CP-001. The March 26,
2002 Decision of the Bureau of Labor Relations
upholding the legitimacy of KML as a labor
organization had long become final and
executory for failure of LEGEND to appeal the
same.
ISSUE:
Whether or not the the CA erred in
denying the petition for certiorari.
HELD:
The petition is partly meritorious.
LABOR LAW: Certification election
Records show that (in the cancellation of
registration case) LEGEND has timely filed on
September 6, 2002 a petition forcertiorari before
the Court of Appeals which was docketed as CA-
G.R. SP No. 72659 assailing the March 26, 2002
Decision of the Bureau of Labor Relations.
However, a certification election may still
be conducted during the pendency of the
cancellation proceedings. This is because at the
time the petition for certification was filed, the
petitioning union is presumed to possess the
legal personality to file the same. There is
therefore no basis for LEGEND’s assertion that
the cancellation of KML’s certificate of
registration should retroact to the time of its
issuance or that it effectively nullified all of KML’s
41
activities, including its filing of the petition for
certification election and its demand to
collectively bargain. Also, the legitimacy of the
legal personality of KML cannot be collaterally
attacked in a petition for certification election
proceeding.
Petition is PARTLY GRANTED. The
CA Decision insofar as it affirms the
Secretary's Decision is AFFIRMED.
219-220 SAN MIGUEL FOODS,
INCORPORATED v. SAN MIGUEL
CORPORATION SUPERVISORS and EXEMPT
UNION,
FACTS:
In G.R. No. 110399, entitled San Miguel
Corporation Supervisors and Exempt Union v.
Laguesma, the Court held that even if they
handle confidential data regarding technical and
internal business operations, supervisory
employees 3 and 4 and the exempt employees of
petitioner San Miguel Foods, Inc. (SMFI) are not
to be considered confidential employees,
because the same do not pertain to labor
relations, particularly, negotiation and settlement
of grievances. Consequently, they were allowed
to form an appropriate bargaining unit for the
purpose of collective bargaining. The Court also
declared that the employees belonging to the
three different plants of San Miguel Corporation
Magnolia Poultry Products Plants in Cabuyao,
San Fernando, and Otis, having "community or
mutuality of interests," constitute a single
bargaining unit.
Pursuant thereto, a certification election
was conducted on September 30, 1998. On the
date of the election, petitioner filed the Omnibus
Objections and Challenge to Voters, questioning
the eligibility to vote by some of its employees on

the grounds that certain employees should not be
allowed to vote as they are:
(1) confidential employees;
(2) employees assigned to the live
chicken operations, which are not covered by the
bargaining unit;
(3) employees whose job grade is level
4, but are performing managerial work and
scheduled to be promoted;
(4) employees who belong to the Barrio
Ugong plant;
(5) non-SMFI employees; and
(6) employees who are members of other
unions.
Respondent averred that (1) the
bargaining unit contemplated in the original
petition is the Poultry Division of San Miguel
Corporation, now known as San Miguel Foods,
Inc.; (2) it covered the operations in Calamba,
Laguna, Cavite, and Batangas and its home base
is either in Cabuyao, Laguna or San Fernando,
Pampanga; and (3) it submitted individual and
separate declarations of the employees whose
votes were challenged in the election.
Based on the results of the votes, the
Med-Arbiter issued the Orderstating that since
the "Yes" vote received 97% of the valid votes
cast, respondent is certified to be the exclusive
bargaining agent of the supervisors and exempt
employees of petitioner's Magnolia Poultry
Products Plants in Cabuyao, San Fernando, and
Otis.
On appeal, the then Acting DOLE
Undersecretary affirmed the Order dated April 13,
1999, with modification that four (4) voters be
excluded from the bargaining unit which
respondent seeks to represent. She opined that
the challenged voters should be excluded from
the bargaining unit, because two (2) are
members of Magnolia Poultry Processing Plants
Monthly Employees Union, while the other two
(2) are employees of San Miguel Corporation,
42
which is a separate and distinct entity from
petitioner.
The Court of Appeals affirmed with
modification the Resolution of the DOLE
Undersecretary, stating that those holding the
positions of Human Resource Assistant and
Personnel Assistant are excluded from the
bargaining unit.
ISSUE:
Did the CA err in expanding the scope
of the bargaining unit so as to include
employees who do not belong to or who are
not based in its Cabuyao or San Fernando
plants?
HELD:
Petitioner contentions are erroneous. In
G.R. No. 110399, the Court explained that the
employees of San Miguel Corporation Magnolia
Poultry Products Plants of Cabuyao, San
Fernando, and Otis constitute a single bargaining
unit, which is not contrary to the one-company,
one-union policy. An appropriate bargaining unit
is defined as a group of employees of a given
employer, comprised of all or less than all of the
entire body of employees, which the collective
interest of all the employees, consistent with
equity to the employer, indicate to be best suited
to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions
of the law.
The test of grouping is community or
mutuality of interest. This is so because the basic
test of an asserted bargaining unit acceptability is
whether or not it is fundamentally the
combination which will best assure to all
employees the exercise of their collective
bargaining rights. Certainly, there is a mutuality of
interest among the employees, their functions
mesh with one another. One group needs the
other in the same way that the company needs
them both. There may be differences as to the

nature of their individual assignments, but the
distinctions are not enough to warrant the
formation of a separate bargaining unit.
Thus, the Court affirms the finding of the
CA that there should be only one bargaining unit
for the employees in Cabuyao, San Fernando,
and Otisof Magnolia Poultry Products Plant
involved in "dressed" chicken processing and
Magnolia Poultry Farms engaged in "live" chicken
operations. Certain factors, such as specific line
of work, working conditions, location of work,
mode of compensation, and other relevant
conditions do not affect or impede their
commonality of interest. Although they seem
separate and distinct from each other, the
specific tasks of each division are actually
interrelated and there exists mutuality of interests
which warrants the formation of a single
bargaining unit.
Although Article 245of the Labor Code
limits the ineligibility to join, form and assist any
labor organization to managerial employees,
jurisprudence has extended this prohibition to
confidential employees or those who by reason of
their positions or nature of work are required to
assist or act in a fiduciary manner to managerial
employees and, hence, are likewise privy to
sensitive and highly confidential
records.Confidential employees are thus
excluded from the rank-and-file bargaining unit. A
confidential employee is one entrusted with
confidence on delicate, or with the custody,
handling or care and protection of the employer
property.Confidential employees, such as
accounting personnel, should be excluded from
the bargaining unit, as their access to confidential
information may become the source of undue
advantage. The rationale for their separate
category and disqualification to join any labor
organization is similar to the inhibition for
managerial employees, because if allowed to be
affiliated with a union, the latter might not be
assured of their loyalty in view of evident conflict
43
of interests and the union can also become
company-denominated with the presence of
managerial employees in the union membership.
Having access to confidential information,
confidential employees may also become the
source of undue advantage. Said employees may
act as a spy or spies of either party to a collective
bargaining agreement.
In this regard, the CA correctly ruled that
the positions of Human Resource Assistant and
Personnel Assistant belong to the category of
confidential employees and, hence, are excluded
from the bargaining unit, considering their
respective positions and job descriptions. As
Human Resource Assistant,the scope of one
work necessarily involves labor relations,
recruitment and selection of employees, access
to employees' personal files and compensation
package, and human resource management. As
regards a Personnel Assistant,one's work
includes the recording of minutes for
management during collective bargaining
negotiations, assistance to management during
grievance meetings and administrative
investigations, and securing legal advice for labor
issues from the petitioner team of lawyers, and
implementation of company programs. Therefore,
in the discharge of their functions, both gain
access to vital labor relations information which
outrightly disqualifies them from union
membership.
DENIED
221 BANK OF THE PHILIPPINE ISLANDS v.
BPI EMPLOYEES UNION-DAVAO CHAPTER-
FEDERATION OF UNIONS IN BPI UNIBANK
FACTS:
In 2000, Far East Bank and trust
Company (FEBTC) merged with Bank of the
Philippine Islands. Petitioner had a Union Shop
agreement with respondent BPI Employees

Union-Davao Chapter-Federation of Unions in
BPI Unibank (the Union).Pursuant to the merger,
respondent requested BPI to terminate the
employment of those new employees from
FEBTC who did not join the union.
BPI refused to undertake such action
and brought the controversy before a voluntary
arbitrator. Although BPI won the initial battle at
the Voluntary Arbitrator level, BPIs position was
rejected by the Court of Appeals which ruled that
the Voluntary Arbitrators interpretation of the
Union Shop Clause was at war with the spirit and
rationale why the Labor Code allows the
existence of such provision.
This was followed and affirmation by the
Supreme Court of the CA decision holding that
former employees of the Far East Bank and Trust
Company (FEBTC) "absorbed" by BPI pursuant
to the two banks merger. The absorbed
employees were covered by the Union Shop
Clause in the then existing collective bargaining
agreement (CBA)of BPI with respondent BPI
Employees Union-Davao Chapter-Federation of
Unions in BPI Unibank (the Union). Petitioners,
despite the August 2010 decision moved for a
Motion for reconsideration of the decision.
ISSUE:
May the "absorbed" FEBTC
employees fell within the definition of "new
employees," under the Union Shop Clause,
such that they be required to join respondent
union or suffer termination upon request by
the union?
HELD:
The court agreed with Justice Brion's
view that it is more in keeping with the
dictates of social justice and the State policy
of according full protection to labor to deem
employment contracts as automatically
assumed by the surviving corporation in a
merger, without break in the continuity of
44
their employment, and even in the absence of
an express stipulation in the articles of
merger or the merger plan.
By upholding the automatic assumption
of the non-surviving corporations existing
employment contracts by the surviving
corporation in a merger, the Court strengthens
judicial protection of the right to security of tenure
of employees affected by a merger and avoid
confusion regarding the status of their various
benefits.However, it shall be noted that nothing in
the Resolution shall impair the right of an
employer to terminate the employment of the
absorbed employees for a lawful or authorized
cause or the right of such an employee to resign,
retire or otherwise sever his employment,
whether before or after the merger, subject to
existing contractual obligations.
Although by virtue of the merger BPI
steps into the shoes of FEBTC as a successor
employer as if the former had been the employer
of the latters employees from the beginning it
must be emphasized that, in reality, the legal
consequences of the merger only occur at a
specific date,i.e.,upon its effectivity which is the
date of approval of the merger by the SEC.Thus,
the court observed in the Decision that BPI and
FEBTC stipulated in the Articles of Merger that
they will both continue their respective business
operations until the SEC issues the certificate of
merger and in the event no such certificate is
issued, they shall hold each other blameless for
the non-consummation of the merger.
In other words, the obligation of BPI to
pay the salaries and benefits of the former
FEBTC employees and its right of discipline and
control over them only arose with the effectivity of
the merger.Concomitantly, the obligation of
former FEBTC employees to render service to
BPI and their right to receive benefits from the
latter also arose upon the effectivity of the
merger.What is material is that all of these legal
consequences of the merger took place during

the life of an existing and valid CBA between BPI
and the Union wherein they have mutually
consented to include a Union Shop Clause.
222 GENERAL MILLING CORPORATION-
INDEPENDENT LABOR UNION (GMC-ILU),
Petitioner, v. GENERAL MILLING
CORPORATION, Respondent.
FACTS:
On April 28, 1989, GMC and
theUnionentered into a CBA which provided,
among other terms, the latters representation of
the collective bargaining unit for a three-year
term made to retroact to 1 December 1988.On 29
November 1991 or one day before the expiration
of the subject CBA, the Union sent a draft CBA
proposal to GMC, with a request for counter-
proposals from the latter, for the purpose of
renegotiating the existing CBA between the
parties.In view of GMCs failure to comply with
said request, theUnioncommenced the complaint
for unfair labor practice which was dismissed for
lack of merit. On appeal, however, said dismissal
was reversed and set aside in the 30 January
1998 decision rendered by the Fourth Division of
the NLRC in NLRC Case No. V-0112-94. The
Supreme Court found GMC guilty of unfair labor
practice.
Thus, the Union filed a motion for
issuance of a writ of execution to enforce the
claims of the covered employees which it
computed in the sum ofP433,786,786.36.
However, GMC opposed said motion on the
ground, among other matters, that the bargaining
unit no longer exist in view of the resignation,
retrenchment, retirement and separation from
service of workers who have additionally
executed waivers and quitclaims acknowledging
full settlement of their claims; that the covered
employees have already received salary
45
increases and benefits for the period 1991 to
1993; and, that aside from the aforesaid
supervening events which precluded the
enforcement thereof, the decision rendered in the
case simply called for the execution of a CBA
incorporating the Unions proposal, not the
outright computation of benefits thereunder.
27 October 2005 , the LA rendered a
decision limiting the computation of the benefits
of theUnions CBA proposal to the remaining two
years of the duration of the original CBA or from
1 December 1991 up to 30 November 1993.
On appeal, the NLRC affirmed the
decision of the LA, finding, among other matters,
that the duty to maintain thestatus quoand to
continue in full force and effect the terms of the
existing agreement under Article 253 of theLabor
Code of the Philippinesapplies only when the
parties agreed to the terms and conditions of the
CBA, the NLRC upheld the Executive Labor
Arbiters computation on the ground, among
others, that the decision sought to be enforced
covered only the remaining two years of the
duration of the original CBA.
On their petitions before the CA, Unions
petition (CA-G.R. CEB-SP No. 02226) was
partially granted on October 10, 2007, upon the
finding that the parties old CBA was superseded
by the imposed CBA which provided a term of
five years from 1 December 1991 and remained
in force until a new CBA is concluded between
the parties. The CA, however, faulted the Union
for its hasty and premature filing of its motion for
issuance of a writ of execution, instead of first
demanding the enforcement of the imposed CBA
from GMC and, failing the same, referring the
matter to the grievance machinery or voluntary
arbitration provided under the imposed CBA, in
accordance with Articles 260 and 261 of theLabor
Code.
On the other hand, GMCs petition (CA-
G.R. SP No. CEB-SP No. 02232) was dismissed
for lack of merit on November 16, 2007, finding

that both parties were given an opportunity to
present their respective positions during the pre-
execution conference conducteda quo, the CA
ruled that the LAs 27 October 2005 order had
attained finality insofar as GMC is concerned, in
view of its failure to perfect an appeal therefrom
by paying the required appeal fee and posting the
cash or surety bond in an amount equivalent to
the benefits computed. The CA likewise held that
quitclaims did not extend to the benefits provided
under the imposed CBA and that the additional
benefits supposedly received by GMCs
employees should not be deducted therefrom, for
lack of sufficient evidence to prove the same.
Hence, this petition.
ISSUE:
Whether or not the imposed CBA which
provided a term of five years from 1 December
1991 remains in force until a new CBA is
concluded between the parties?
HELD:
CA-G.R. CEB-SP Nos. 02226 and
02232 are reversed and set aside.
LABOR LAW
Article XIV of the imposed CBA provides
that (t)his Agreement shall be in full force and
effect for a period of five (5) years from 1
December 1991, provided that sixty (60) days
prior to the lapse of the third year of effectivity
hereof, the parties shall open negotiations on
economic aspect for the fourth and fifth years
effectivity of this Agreement. Considering that no
new CBA had been, in the meantime, agreed
upon by GMC and the Union, we find that the
CAs Special Twentieth Division correctly ruled in
CA-G.R. CEB-SP No. 02226 that, pursuant to
Article 253 of theLabor Code, the provisions of
the imposed CBA continues to have full force and
effect until a new CBA has been entered into by
the parties.Article 253 mandates the parties to
keep thestatus quoand to continue in full force
46
and effect the terms and conditions of the
existing agreement during the 60-day period prior
to the expiration of the old CBA and/or until a
new agreement is reached by the parties. In the
same manner that it does not provide for any
exception nor qualification on which economic
provisions of the existing agreement are to retain
its force and effect,the law does not distinguish
between a CBA duly agreed upon by the parties
and an imposed CBA like the one under
consideration.
Considering that the 30 January 1998
decision sought to be enforced confined the
application of the imposed CBA to the remaining
two-year duration of the original CBA, we find
that the computation of the benefits due GMCs
covered employees was correctly limited to the
period 1 December 1991 to 30 November 1993 in
the 27 October 2005 order issued by Executive
Labor Arbiter Violeta Ortiz-Bantug and the 20
July 2006 decision rendered by the NLRC in
NLRC Case No. V-000632-2005.
Consequently, insofar as the execution
of the 30 January 1998 decision is concerned,
theUnionis out on a limb in espousing a
computation which extends the benefits of the
imposed CBA beyond the remaining two-year
duration of the original CBA.The rule is, after all,
settled that an order of execution which varies
the tenor of the judgment or exceeds the terms
thereof is a nullity. Since execution not in
harmony with the judgment is bereft of validity,it
must conform, more particularly, to that ordained
or decreed in the dispositive portion of the
decision sought to be enforced.Considering that
the decision sought to be enforced pertains to the
period 1December 1991 to 30 November 1993, it
necessarily follows that the computation of
benefits under the imposed CBA should be
limited to covered employees who were in GMCs
employ during said period of time.While it is true
that the provisions of the imposed CBA extend
beyond said remaining two-year duration of the

original CBA in view of the parties admitted
failure to conclude a new CBA, the corresponding
computation of the benefits accruing in favor of
GMCs covered employees after the term of the
original CBA was correctly excluded in the
aforesaid 27 October 2005 order issued in RAB
VII-06-0475-1992.Rather than the abbreviated
pre-execution proceedings before Executive
Labor ArbiterVioleta Ortiz-Bantug, the
computation of the same benefits beyond 30
November 1993 should, instead, be threshed out
by GMC and theUnionin accordance with
theGrievance Procedure.
Article II of the imposed CBA, relatedly,
provides that (t)he employees covered by this
Agreement are those employed as regular
monthly paid employees at the [GMC] offices in
Cebu City and Lapulapu City, including cadet
engineers, salesmen, veterinarians, field and
laboratory workers, with the exception of
managerial employees, supervisory employees,
executive and confidential secretaries,
probationary employees and the employees
covered by a separate Collective Bargaining
Agreement at the Companys Mill in Lapulapu
City. Gauged from the express language of the
foregoing provision, we find that Executive Labor
ArbiterVioleta Ortiz-Bantug correctly excluded the
following employees fromthe list of 436
employees submitted by the Union andthe
computation of the benefitsfor the period
1December 1991 to 30 November 1993, to wit:
(a) 77 employees who were hired or regularized
after 30 November 1993; (b)36 daily paid rank
and file employees who were covered by a
separate CBA; (c) 41 managerial/supervisory
employees; and, (d) 1 employee for whom no
salary-rate information was submitted in the
premises. However, we find that the 234
employees who had already been separated from
GMCs employ by the time of the rendition of the
11 February 2004 decision in G.R. No. 146728
47
should further be added to these excluded
employees.
The record shows that said 234
employees were union members whose
employment with GMC ceased as a
consequence of death, termination due to
redundancy, termination due to closure of plant,
termination for cause, voluntary resignation,
separation or dismissal from service as well as
retirement. Upon compliance with GMCs
clearance requirements and in consideration of
sums ranging fromP38,980.12 toP631,898.72,
due payment and receipt of which were duly
acknowledged, it appears that said employees
executed deeds of waiver, release and quitclaim.
REMEDIAL LAW
The conflicting decisions in CA-G.R.
CEB-SP Nos. 02226 and 02232 would have
been, in the first place, avoided had the CA
consolidated said cases pursuant to Section 3,
Rule III of its 2002 Internal Rules (IRCA). Being
intimately and substantially related cases, their
consolidation should have been ordered to avert
the possibility of conflicting decisions in the two
cases.
Although rendered on the merits by a
court of competent jurisdiction acting within its
authority, neither one of said decisions can,
however, be invoked as law of the case insofar
as the other case is concerned.The doctrine of
law of the case means that whatever is once
irrevocably established as the controllinglegal
rule or decision between the same parties in the
same case continues to be the law of the
case,whether correct on general principles or not,
so long as the facts on which such decision was
predicated continue to be the facts of the case
before the court.Considering that a decision
becomes the law of the case once it attains
finality, it is evident that, without having achieved
said status, the herein assailed decisions cannot

be invoked as the law of the case by either GMC
or theUnion.
The October 27, 2005 order by the
Labor Arbiter is reinstated and modified.
223 MAGDALA MULTIPURPOSE &
LIVELIHOOD COOPERATIVE and SANLOR
MOTORS CORP., vs. KILUSANG
MANGGAGAWA NG LGS, MAGDALA
MULTIPURPOSE & LIVELIHOOD
CORPERATIVE (KMLMS) and UNION
MEMBERS/ STRIKERS
FACTS:
KMLMS filed a notice of strike on March
5, 2002 and conducted its strike-vote on April 8,
2002. However, KMLMS only acquired legal
personality when its registration as an
independent labor organization was granted on
April 9, 2002 by the Department of Labor and
Employment. On April 19, 2002, it became
officially affiliated as a local chapter of the
Pambansang Kaisahan ng Manggagawang
Pilipino when its application was granted by the
Bureau of Labor Relations.
On May 6, 2002, KMLMS, now a
legitimate labor organization (LLO), staged a
strike where several prohibited and illegal acts
were committed by its participating members.
On the ground of lack of valid notice of
strike, ineffective conduct of a strike-vote and
commission of prohibited and illegal acts,
petitioners filed their Petition to Declare the Strike
of May 6, 2002 Illegal before the NLRC.
Petitioners prayed, inter alia, that the officers and
members of respondent KMLMS who participated
in the illegal strike and who knowingly committed
prohibited and illegal activities, respectively,
be declared to have lost or forfeited their
employment status.
On the ground of non-compliance with
the strict and mandatory requirements for a valid
48
conduct of a strike under Article 263(c), (d) and
(f) of the Labor Code and Rule XXII, Book V of
the Omnibus Rules Implementing the
Labor Code, LA Aglibut found the May 6, 2002
strike illegal and accordingly dismissed all the 14
union officers of KMLMS. LA Aglibut likewise
found 27 identified members of KMLMS to have
committed prohibited and illegal acts
proscribed under Art. 264 of the Labor Code and
accordingly declared them to have forfeited their
employment.
Both parties appealed the Decision of LA
Aglibut before the NLRC
NLRC affirmed with modification LA
Aglibut’s Decision by declaring an additional
seven (7) union members to have forfeited their
employment status.
Both parties again filed their respective
appeals before the CA. CA affirmed the NLRC
decision
Petitioners prayed to SC for a partial
modification of the assailed CA Decision by
declaring additional 72 similarly erring KMLMS
members to have lost their employment.
ISSUE:
Whether or not the CA erred in refusing
to similarly declare as having lost their
employment status the rest of the union strikers
who have participated in the illegal strike and
commited prohibited / illegal acts, to the prejudice
of petitioner's business operations.
HELD:
There is no question that the May 6,
2002 strike was illegal, first, because when
KMLMS filed the notice of strike, it had not yet
acquired legal personality and, thus, could not
legally represent the eventual union and its
members. And second, similarly when KMLMS
conducted the strike-vote, there was still no union
to speak of, since KMLMS only acquired legal
personality as an independent LLO only on the
 49

day after it conducted the strike-vote. These

factual findings are undisputed and borne out by
the records. Consequently, the mandatory notice
of strike and the conduct of the strike-vote report
were ineffective for having been filed and
conducted before KMLMS acquired legal
personality as an LLO, violating Art. 263(c), (d)
and (f) of the Labor Code and Rule XXII, Book V
of the Omnibus Rules Implementing the Labor
Code.
When the May 6, 2002 illegal strike was
conducted, the members of respondent KMLMS
committed prohibited and illegal acts which
doubly constituted the strike illegal. Proper
sanctions for the conduct of union officers in an
illegal strike and for union members who
committed illegal acts during a strike. Art. 264 of
the Code presents a substantial distinction of the
consequences of an illegal strike between union
officers and mere members of the union.
For union officers, knowingly
participating in an illegal strike is a valid ground
for termination of their employment. But for union
members who participated in a strike, their
employment may be terminated only if they
committed prohibited and illegal acts during the
strike and there is substantial evidence or proof
of their participation, that they are clearly
identified to have committed such prohibited and
illegal acts.
The petitioners have substantially proved
the identity of 72 other union members who
committed prohibited and illegal acts during the
May 6, 2002 illegal strike. Thus, the 72 union
members who committed prohibited and illegal
acts during the May 6, 2002 strike are also
declared to have forfeited their employment.

224 VISAYAS COMMUNITY MEDICAL
CENTER (VCMC), formerly known as METRO
CEBU COMMUNITY HOSPITAL (MCCH),
Petitioner, v. ERMA YBALLE, NELIA ANGEL,
ELEUTERIA CORTEZ and EVELYN ONG,
Respondents.
FACTS:
Respondents were hired as staff nurses
(Ong and Angel) and midwives (Yballe and
Cortez) by petitioner Visayas Community Medical
Center (VCMC), formerly the Metro Cebu
Community Hospital, Inc. (MCCHI). MCCHI is a
non-stock, non-profit corporation hich operates
the Metro Cebu Community Hospital (MCCH), a
tertiary medical institution owned by the United
Church of Christ in the Philippines (UCCP).
The National Federation of Labor (NFL)
is the exclusive bargaining representative of the
rank-and-file employees of MCCHI.Under the
1987 and 1991 Collective Bargaining
Agreements (CBAs).
On December 6, 1995, Nava wrote Rev.
Iyoy expressing the union desire to renew the
CBA, attaching to her letter a statement of
proposals signed/endorsed by 153 union
members.Nava subsequently requested that the
following employees be allowed to avail of one-
day union leave with pay on December 19, 1995.
However, MCCHI returned the CBA proposal for
Nava to secure first the endorsement of the legal
counsel of NFL as the official bargaining
representative of MCCHI employees.
Meanwhile, Atty. Alforque informed
MCCHI that the proposed CBA submitted by
Nava was never referred to NFL and that NFL
has not authorized any other legal counsel or any
person for collective bargaining negotiations.
On February 26, 1996, upon the request
of Atty. Alforque, MCCHI granted one-day union
leave with pay for 12 union members. The next
day, several union members led by Nava and her
group launched a series of mass actions such as
50
wearing black and red armbands/headbands,
marching around the hospital premises and
putting up placards, posters and streamers.Atty.
Alforque immediately disowned the concerted
activities being carried out by union members
which are not sanctioned by NFL.MCCHI directed
the union officers led by Nava to submit within 48
hours a written explanation why they should not
be terminated for having engaged in illegal
concerted activities amounting to strike, and
place them under immediate preventive
suspension.
Responding to this directive, Nava and
her group denied there was a temporary
stoppage of work, explaining that employees
wore their armbands only as a sign of protest and
reiterating their demand for MCCHI to comply
with its duty to bargain collectively.
On March 13 and 19, 1996, the
Department of Labor and Employment (DOLE)
Regional Office No. 7 issued certifications stating
thatthere is nothing in their records which shows
thatNAMA-MCCH-NFL isa registered labor
organization, and that said union submitted only
a copy of its Charter Certificate on January 31,
1995.MCCHI then sent individual notices to all
union members asking them to submit within 72
hours a written explanation why they should not
be terminated for having supported the illegal
concerted activities of NAMA-MCCH-NFL which
has no legal personality as per DOLE records.
On March 13, 1996, NAMA-MCCH-NFL
filed a Notice of Strike but the same was deemed
not filed for want of legal personality on the part
of the filer.
Meanwhile, the scheduled investigations
did not push through because the striking union
members insisted on attending the same only as
a group.MCCHI again sent notices informing
them that their refusal to submit to investigation is
deemed a waiver of their right to explain their
side and management shall proceed to impose

proper disciplinary action under the
circumstances.
Unfazed, the striking union members
held more mass actions.The means of ingress to
and egress from the hospital were blocked so
that vehicles carrying patients and employees
were barred from entering the premises.Placards
were placed at the hospital entrance gate stating:
lease proceed to another hospitaland e are on
protest. Employees and patients reported acts of
intimidation and harassment perpetrated by union
leaders and members.With the intensified
atmosphere of violence and animosity within the
hospital premises as a result of continued protest
activities by union members, MCCHI suffered
heavy losses due to low patient admission rates.
The hospital suppliers also refused to
make further deliveries on credit.With the volatile
situation adversely affecting hospital operations
and the condition of confined patients, MCCHI
filed a petition for injunction in the NLRC on July
9, 1996.A temporary restraining order (TRO) was
issued on July 16, 1996. MCCHI presented 12
witnesses (hospital employees and patients),
including a security guard who was stabbed by
an identified sympathizer while in the company of
Nava group.MCCHI petition was granted and a
permanent injunction was issued on September
18, 1996 enjoining the Nava group from
committing illegal acts mentioned in Art. 264 of
the Labor Code.
Thereafter, several complaints for illegal
dismissal and unfair labor practice were filed by
the terminated employees against MCCHI. Rev.
Iyoy, UCCP and members of the Board of
Trustees of MCCHI.
Executive Labor Arbiter Reynoso A.
Belarmino rendered in his decision dismissing the
claim of unfair labor practice and illegal dismissal
and declaring the termination of the following as
an offshoot of the illegal strike.
NLRC dismissed the motion for
reconsideration filed by the respondents.
51
CA reversed the rulings of the Labor
Artbiter and NLRC, ordered the reinstatement of
respondents and the payment of their full back
wages.
ISSUE:
whether or not respondents did not
commit illegal acts during strike?
HELD:
The strike held by respondents were
illegal.
Labor Law - Illegal Strike
Paragraph 3, Article 264(a) of the Labor
Code provides that . .any union officer who
knowingly participates in an illegal strike and any
worker or union officer who knowingly
participates in the commission of illegal acts
during a strike may be declared to have lost his
employment status.
. We stress that the law makes a
distinction between union members and union
officers. A worker merely participating in an illegal
strike may not be terminated from employment.It
is only when he commits illegal acts during a
strike that he may be declared to have lost
employment status. In contrast, a union officer
may be terminated from employment for
knowingly participating in an illegal strike or
participates in the commission of illegal acts
during a strike.The law grants the employer the
option of declaring a union officer who
participated in an illegal strike as having lost his
employment. It possesses the right and
prerogative to terminate the union officers from
service.
In this case, the NLRC affirmed the
finding of the Labor Arbiter that respondents
supported and took part in the illegal strike and
further declared that they were guilty of
insubordination.It noted that the striking
employees were determined to force
management to negotiate with their union and

proceeded with the strike despite knowledge that
NAMA-MCCH-NFL is not a legitimate labor
organization and without regard to the
consequences of their acts consisting of
displaying placards and marching noisily inside
the hospital premises, and blocking the entry of
vehicles and persons
Are respondents then entitled to back
wages? In G & S Transport Corporation v.
Infante, ruled in the negative: with respect to
backwages, the principle of a air day wage for a
fair day labor remains as the basic factor in
determining the award thereof.If there is no work
performed by the employee there can be no
wage or pay unless, of course, the laborer was
able, willing and ready to work but was illegally
locked out, suspended or dismissed or otherwise
illegally prevented from working. x x xIn
Philippine Marine Officers Guild v. Compaia
aritima, as affirmed in Philippine Diamond Hotel
and Resort v. Manila Diamond Hotel Employees
Union, the Court stressed that for this exception
to apply, it is required that the strike be legal, a
situation that does not obtain in the case at bar.
In fine, we sustain the CA in ruling that
respondents who are mere union members were
illegally dismissed for participating in the illegal
strike conducted by the Nava group.However, we
set aside the order for their reinstatement and
payment of full backwages.
Petition for review on certiorari is
PARTLY GRANTED.
225 C. ALCANTARA & SONS, INC., Petitioner,
v. COURT OF APPEALS
FACTS:
These cases were consolidated based
on the following facts as follows:
The negotiation between CASI and the
Union on the economic provisions of the CBA
ended in a deadlock prompting the Union to
52
stage a strike,but the strike was later declared by
the LA to be illegal in violation of the CBAs no
strike-no lockout provision.Consequently, the
Union officers were deemed to have forfeited
their employment with the company and made
them liable for actual damages plus interest and
attorneys fees, while the Union members were
ordered to be reinstated without backwages there
being no proof that they actually committed illegal
acts during the strike.
Notwithstanding the provision of the
Labor Code mandating that the reinstatement
aspect of the decision be immediately executory,
the LA refused to reinstate the dismissed Union
members. On November 8, 1999, the NLRC
affirmed the LA decision insofar as it declared the
strike illegal and ordered the Union officers
dismissed from employment and liable for
damages but modified the same by considering
the Union members to have been validly
dismissed from employment for committing
prohibited and illegal acts.
On petition forcertiorari, the CA annulled
the NLRC decision and reinstated that of the LA.
Aggrieved, CASI, the Union and the Union
officers and members elevated the matter to the
Court.
During the pendency of the cases, the
affected Union members (who were ordered
reinstated) filed with the LA a motion for
reinstatement pending appeal and the
computation of their backwages. But the LA
awarded separation pay and other benefits. On
appeal, the NLRC denied the Union members
claim for separation pay, accrued wages and
other benefits.When elevated to the CA, the
appellate court held that reinstatement pending
appeal applies only to illegal dismissal cases
under Article 223 of the Labor Code and not to
cases under Article 263. Hence, the petition by
the Union and its officers and members in G.R.
No. 179220.

The Court agreed with the CA on the
illegality of the strike as well as the termination of
the Union officers, but disagreed with the CA
insofar as it affirmed the reinstatement of the
Union members. The Court, instead, sustained
the dismissal not only of the Union officers but
also the Union members who, during the illegal
strike, committed prohibited acts by threatening,
coercing, and intimidating non-striking
employees, officers, suppliers and customers;
obstructing the free ingress to and egress from
the company premises; and resisting and defying
the implementation of the writ of preliminary
injunction issued against the strikers.
The Court further held that the
terminated Union members, who were ordered
reinstated by the LA, should have been
immediately reinstated due to the immediate
executory nature of the reinstatement aspect of
the LA decision. In view, however, of CASIs
failure to reinstate the dismissed employees, the
Court ordered CASI to pay the terminated Union
members their accrued backwages from the date
of the LA decision until the eventual reversal by
the NLRC of the order of reinstatement. In
addition to the accrued backwages, the Court
awarded separation pay as a form of financial
assistance to the Union members equivalent to
one-half month salary for every year of service to
the company up to the date of their termination.
Hence, this motion for partial
reconsideration by the petitioner.
ISSUE:
Whether or not the petitioner is liable to
pay the accrued wages of the dismissed
employees?
Whether or not the Court erred in
awarding separation pay to the dismissed union
officers and employees?
HELD:
The motion for partial reconsideration
is partly granted.
53
LABOR LAW
Article 264 (a) of the Labor Code
provides for the liabilities of the Union officers
and members participating in illegal strikes and/or
committing illegal acts. Thus, the said provision
sanctions the dismissal of a Union officer who
knowingly participates in an illegal strike or who
knowingly participates in the commission of
illegal acts during a lawful strike. In this case, the
Union officers were in clear breach of the above
provision of law when they knowingly participated
in the illegal strike.
As to the Union members, the same
provision of law provides that a member is liable
when he knowingly participates in the
commission of illegal acts during a strike. We find
no reason to reverse the conclusion of the Court
that CASI presented substantial evidence to
show that the striking Union members committed
the following prohibited acts: (a) They threatened,
coerced, and intimidated non-striking employees,
officers, suppliers and customers;(b) They
obstructed the free ingress to and egress from
the company premises; and (c) They resisted and
defied the implementation of the writ of
preliminary injunction issued against the strikers.
The commission of the above prohibited
acts by the striking Union members warrants their
dismissal from employment.
Records show that the LA found the
strike illegal and sustained the dismissal of the
Union officers, but ordered the reinstatement of
the striking Union members for lack of evidence
showing that they committed illegal acts during
the illegal strike. This decision, however, was
later reversed by the NLRC.Pursuant to Article
223of the Labor Code and well-established
jurisprudence, the decision of the LA reinstating a
dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall
immediately be executory, pending
appeal.[28]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 employee,
merely reinstated in the payroll. 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.If the employer fails to exercise the option
of re-admitting the employee to work or to
reinstate him in the payroll, the employer must
pay the employees salaries during the period
between the LAs order of reinstatement pending
appeal and the resolution of the higher court
overturning that of the LA.
In this case, CASI is liable to pay the
striking Union members their accrued wages for
four months and nine days, which is the period
from the notice of the LAs order of reinstatement
until the reversal thereof by the NLRC.
LABOR LAW
Separation pay may be given as a form
of financial assistance when a worker is
dismissed in cases such as the installation of
labor-saving devices, redundancy, retrenchment
to prevent losses, closing or cessation of
operation of the establishment, or in case the
employee was found to have been suffering from
a disease such that his continued employment is
prohibited by law.It is a statutory right defined as
the amount that an employee receives at the time
of his severance from the service and is designed
to provide the employee with the wherewithal
during the period that he is looking for another
employment. It is oriented towards the immediate
future, the transitional period the dismissed
employee must undergo before locating a
replacement job.As a general rule, when just
causes for terminating the services of an
employee exist, the employee is not entitled to
separation pay because lawbreakers should not
benefit from their illegal acts.The rule, however,
is subject to exceptions.
In the case at bar, not only did the
Court declare the strike illegal, rather, it also
54
found the Union officers to have knowingly
participated in the illegal strike. Worse, the
Union members committed prohibited acts
during the strike. Thus, the awards of
separation pay as a form of financial
assistance is deleted.
The motion for partial consideration
by the petitioner is partly granted. The
decision of the Court is partly reconsidered.
226 YOLITO FADRIQUELAN, et al.,
Petitioners, v. MONTEREY FOODS
CORPORATION, Respondent.
FACTS:
On April 30, 2002 the three-year CBA
between the union Bukluran ng Manggagawa sa
Monterey-Ilaw at Buklod ng Manggagawa (the
union) and Monterey Foods Corporation (the
company) expired. On March 28, 2003 after the
negotiation for a new CBA reached a deadlock,
the union filed a notice of strike with the National
Conciliation and Mediation Board (NCMB). To
head off the strike, on April 30, 2003 the
company filed with the DOLE a petition for
assumption of jurisdiction over the dispute in view
of its dire effects on the meat industry. In an
Order dated May 12, 2003, the DOLE Secretary
assumed jurisdiction over the dispute and
enjoined the union from holding any strike. It also
directed the union and the company to desist
from taking any action that may aggravate the
situation.
On May 21, 2003 the union filed a
second notice of strike before the NCMB on the
alleged ground that the company committed
unfair labor practices. On June 10, 2003 the
company sent notices to the union officers,
charging them with intentional acts of slowdown.
Six days later or on June 16 the company sent
new notices to the union officers, informing them

of their termination from work for defying the
DOLE Secretary's assumption order.
On June 23, 2003, the DOLE Secretary
included the unions second notice of strike in his
earlier assumption order. But, on the same day,
the union filed a third notice of strike based on
allegations that the company had engaged in
union busting and illegal dismissal of union
officers. On July 7, 2003 the company filed a
petition for certification of the labor dispute to the
NLRC for compulsory arbitration but the DOLE
Secretary denied the motion. He, however,
subsumed the third notice of strike under the first
and second notices.
The DOLE upheld the company's
termination of the 17 union officers. On appeal,
the CA upheld the validity of the company's
termination of 10 union officers but declaring
illegal that of the other seven. Both parties sought
recourse to this Court, the union in G.R. 178409
and the company in G.R. 178434.
ISSUES:
Whether or not the CA erred in holding
that slowdowns actually transpired at the
company's farms; andWhether or not the CA
erred in holding that union officers committed
illegal acts that warranted their dismissal from
work.
HELD:
The decision of the Court of Appeals
is overruled.
LABOR LAW
No strike shall be declared after the
Secretary of Labor has assumed jurisdiction over
a labor dispute. A strike conducted after such
assumption is illegal and any union officer who
knowingly participates in the same may be
declared as having lost his employment. Labor
Code, Article 264 (a).
Here, what is involved is a slowdown
strike. Unlike other forms of strike, the employees
55
involved in a slowdown do not walk out of their
jobs to hurt the company. They need only to stop
work or reduce the rate of their work while
generally remaining in their assigned post.
The Court finds that the union officers
and members in this case held a slowdown strike
at the company's farms despite the fact that the
DOLE Secretary had on May 12, 2003 already
assumed jurisdiction over their labor dispute. The
evidence sufficiently shows that union officers
and members simultaneously stopped work at
the company's Batangas and Cavite farms at
7:00 a.m. on May 26, 2003.
LABOR LAW
The ordinary worker cannot be
terminated for merely participating in the strike.
There must be proof that he committed illegal
acts during its conduct. On the other hand, a
union officer can be terminated upon mere proof
that he knowingly participated in the illegal strike.
Still, the participating union officers have
to be properly identified.The CA held that the
company illegally terminated union officers
Ruben Alvarez, John Asotigue, Alberto Castillo,
Nemesio Agtay, Carlito Abacan, Danilo Rolle,
and Juanito Tenorio, there being no substantial
evidence that would connect them to the
slowdowns. The CA said that their part in the
same could not be established with certainty.
The Court sustains the validity of the
termination of the rest of the union officers. The
identity and participations of petitioners in the
slowdowns were properly established. These
officers simply refused to work or they
abandoned their work to join union assemblies.
In termination cases, the dismissed
employee is not required to prove his innocence
of the charges against him. The burden of proof
rests upon the employer to show that the
employees dismissal was for just cause. The
employers failure to do so means that the
dismissal was not justified.Here, the company

failed to show that all 17 union officers deserved
to be dismissed.
227 NELSON A. CULILI, Petitioner, v.
EASTERN TELECOMMUNICATIONS
PHILIPPINES, INC., SALVADOR HIZON
(President and Chief Executive Officer),
EMILIANO JURADO (Chairman of the Board),
VIRGILIO GARCIA (Vice President) and
STELLA GARCIA (Assistant Vice President),
Respondents.
FACTS:
Respondent Eastern
Telecommunications Philippines, Inc. (ETPI) is a
telecommunications company engaged mainly in
the business of establishing commercial
telecommunications systems and leasing of
international datalines or circuits that pass
through the international gateway facility (IGF).
The other respondents are ETPIs officers.
Petitioner Nelson A. Culili was employed
by ETPI as a Technician in its Field Operations
Department in 1981. In 1996, Culili was promoted
to Senior Technician in the Customer Premises
Equipment Management Unit of the Service
Quality Department.
As a telecommunications company and
an authorized IGF operator, ETPI was required,
under RA No. 7925 and EO No. 109, to establish
landlines in Metro Manila and certain provinces.
However, due to interconnection problems with
the PLDT, poor subscription and cancellation of
subscriptions, and other business difficulties,
ETPI was forced to halt its roll out of 129,000
landlines already allocated to a number of its
employees.
In 1998, due to business troubles and
losses, ETPI was compelled to implement a
Right-Sizing Program which consisted of two
phases: the first phase involved the reduction of
ETPIs workforce to only those employees that
56
were necessary and which ETPI could sustain;
the second phase entailed a company-wide
reorganization which would result in the transfer,
merger, absorption or abolition of certain
departments of ETPI.
As part of the first phase, ETPI offered to
its employees who had rendered at least fifteen
years of service, the Special Retirement
Program, which consisted of the option to
voluntarily retire at an earlier age and a
retirement package equivalent to two and a half
(2) months salary for every year of service. This
offer was initially rejected by the Eastern
Telecommunications Employees Union (ETEU),
ETPIs duly recognized bargaining agent, which
threatened to stage a strike. ETPI explained to
ETEU the exact details of the Right-Sizing
Program and the Special Retirement Program
and after consultations with ETEUs members,
ETEU agreed to the implementation of both
programs. Thus, ETPI re-offered the Special
Retirement Program and the corresponding
retirement package to the one hundred two (102)
employees who qualified for the program. Of all
the employees who qualified to avail of the
program, only Culili rejected the offer.
Among the departments abolished was
the Service Quality Department. The functions of
the Customer Premises Equipment Management
Unit, Culilis unit, were absorbed by the Business
and Consumer Accounts Department. As a
result, Culilis position was abolished due to
redundancy and his functions were absorbed by
the Business and Consumer Accounts
Department.
ETPI, through its Assistant Vice
President Stella Garcia, informed Culili of his
termination from employment effective April 8,
1999.
Culili alleged that neither he nor the
DOLE were formally notified of his termination.
Culili believed that ETPI had already decided to
dismiss him even prior to the March 8, 1999

letter. Moreover, Culili asserted that ETPI had
contracted out the services he used to perform to
a labor-only contractor which not only proved that
his functions had not become unnecessary, but
which also violated their Collective Bargaining
Agreement (CBA) and the Labor Code. Aside
from these, Culili also alleged that he was
discriminated against when ETPI offered some of
his co-employees an additional benefit in the
form of motorcycles to induce them to avail of the
Special Retirement Program, while he was not.
ETPI denied singling Culili out for
termination. ETPI claimed that because there
was no more work for Culili, it was constrained to
serve a final notice of termination to Culili, which
Culili ignored. Thus, on March 26, 1999, ETPI
tendered to Culili his final pay check of
P859,033.99 consisting of his basic salary,
leaves, 13th month pay and separation pay. ETPI
claimed that Culili refused to accept his
termination and continued to report for work.
Culili filed a complaint against ETPI and
its officers for illegal dismissal, unfair labor
practice, and money claims before the Labor
Arbiter.
The Labor Arbiter found ETPI guilty of
illegal dismissal and unfair labor practice.
On appeal, the NLRC affirmed the Labor
Arbiters decision but modified the amount of
moral and exemplary damages awarded.
The Court of Appeals found that Culilis
position was validly abolished due to redundancy.
It further held that ETPI cannot be held guilty of
unfair labor practice as mere contracting out of
services being performed by union members
does not per se amount to unfair labor practice
unless it interferes with the employees right to
self-organization. Hence, this petition.
ISSUE:
Whether or not Culili is illegally
dismissed.
57
HELD:
The decision of the Court of Appeals
is sustained.
LABOR LAW
There is redundancy when the service
capability of the workforce is greater than what is
reasonably required to meet the demands of the
business enterprise. A position becomes
redundant when it is rendered superfluous by any
number of factors such as over-hiring of workers,
decrease in volume of business, or dropping a
particular product line or service activity
previously manufactured or undertaken by the
enterprise. Soriano, Jr. v. NLRC, G.R. No.
165594, April 23, 2007
This Court also held that the following
evidence may be proffered to substantiate
redundancy: the new staffing pattern, feasibility
studies/ proposal on the viability of the newly
created positions, job description and the
approval by the management of the restructuring.
In the case at bar, ETPI was upfront with
its employees about its plan to implement a
Right-Sizing Program. Even in the face of initial
opposition from and rejection of the said program
by ETEU, ETPI patiently negotiated with ETEUs
officers to make them understand ETPIs
business dilemma and its need to reduce its
workforce and streamline its organization. This
evidently rules out bad faith on the part of ETPI.
The records show that ETPI had
sufficiently established not only its need to
reduce its workforce and streamline its
organization, but also the existence of
redundancy in the position of a Senior
Technician. ETPI explained how it failed to meet
its business targets and the factors that caused
this, and how this necessitated it to reduce its
workforce and streamline its organization. ETPI
also submitted its old and new tables of
organization and sufficiently described how
limited the functions of the abolished position of a

Senior Technician were and how it decided on
whom to absorb these functions.
LABOR LAW
Although the Court finds Culilis dismissal
was for a lawful cause and not an act of unfair
labor practice, ETPI, however, was remiss in its
duty to observe procedural due process in
effecting the termination of Culili.
For termination of employment as
defined in Article 283 of the Labor Code, the
requirement of due process shall be deemed
complied with upon service of a written notice to
the employee and the appropriate Regional
Office of the Department of Labor and
Employment at least thirty days before effectivity
of the termination, specifying the ground or
grounds for termination.
ETPI does not deny its failure to provide
DOLE with a written notice regarding Culilis
termination. It, however, insists that it has
complied with the requirement to serve a written
notice to Culili as evidenced by his admission of
having received it and forwarding it to his union
president.
The Court of Appeals, in finding that
Culili was not afforded procedural due process,
held that Culilis dismissal was ineffectual, and
required ETPI to pay Culili full backwages in
accordance with our decision in Serrano v.
NLRC, 387 Phil. 345 (2000).
Hence, since it has been established that
Culilis termination was due to an authorized
cause and cannot be considered unfair labor
practice on the part of ETPI, his dismissal is
valid. However, in view of ETPIs failure to comply
with the notice requirements under the Labor
Code, Culili is entitled to nominal damages in
addition to his separation pay.
DENIED.
58
228 Park Hotel vs. Soriano
FACTS:
Soriano was initially hired by Park Hotel
but was transferred to Burgos
Corporation.Gonzales and Badilla were
employees of Burgos Corporation.Burgos is a
sister company of Park Hotel. Harbutt and Percy
are the General Managerand owner, respectively,
of Park Hotel. Percy, Harbutt and Atty. Roberto
Enriquez are also theofficers and stockholders of
Burgos Corporation.Soriano, Gonzales and
Badilla were dismissed from work for allegedly
stealing companyproperties. As a result,
respondents filed complaints for illegal dismissal,
unfair labor practice,before the Labor Arbiter
(LA). In their complaints, respondents alleged
that the real reason fortheir dismissal was that
they were organizing a union for the company's
employees.
ISSUE:
Whether or not corporate officers are
solidarily and personally liable in a case for
illegaldismissal and unfair labor practice
HELD:
A corporation, being a juridical entity,
may act only through its directors, officers
andemployees. Obligations incurred by them,
while acting as corporate agents, are not
theirpersonal liability but the direct accountability
of the corporation they represent.
However,corporate officers may be deemed
solidarily liable with the corporation for the
termination ofemployees if they acted with malice
or bad faith. In the present case, the lower
tribunalsunanimously found that Percy and
Harbutt, in their capacity as corporate officers of
Burgos,acted maliciously in terminating the
services of respondents without any valid ground
and inorder to suppress their right to self-
 59

organization.Section 31 of the Corporation Code

makes a director personally liable for
corporatedebts if he willfully and knowingly votes
for or assents to patently unlawful acts of
thecorporation. It also makes a director
personally liable if he is guilty of gross negligence
or badfaith in directing the affairs of the
corporation. Thus, Percy and Harbutt, having
acted in badfaith in directing the affairs of Burgos,
are jointly and severally liable with the latter
forrespondents' dismissal