TIRAZONA v. PHILIPPINE EDS TECHNO-SERVICE
29, 2008: Petitioner moved for reconsideration
INC. (PET, Inc.)
January 20, 2009 | Chico-Nazario, J. | When to/not to tilt
the scales of justice as a measure of equity and
compassionate social justice
Digester: Arreza, Jose Augusto
SUMMARY: Petitioner Tirazona was dismissed from
service by Respondent PET, Inc. for her willful breach
of trust reposed upon her by her employer. The NLRC,
CA, and SC all found her dismissal as justified. In her
2nd Motion for Reconsideration, she prayed for the
invalidation of her dismissal and for the award of
separation pay for just causes on the basis of equity.
The SC denied her petition for lack of merit.
DOCTRINE: Separation pay shall be allowed as a
measure of social justice only in those instances where
the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral
character.
FACTS:
 Because of her improper handling of a situation
involving a rank-and-file employee, officers/directors
of respondent PET, Inc. called the attention of
petitioner Ma. Wenelita Tirazona, the Administrative
Manager of respondent company. Claiming she was
denied due process, she demanded Php 2M
indemnity from PET and its officers/directors. She
also admitted to reading a confidential letter
addressed to PET officers/directors containing the
legal opinion of the counsel of PET regarding her
case. Because of all this, she was validly terminated
on the ground that she willfully breached the trust
and confidence reposed in her by her employed. The
SC denied her original petition.
 Apr.
praying that her dismissal be declared illegal and
that she be awarded separation pay and retirement
benefits out of humanitarian considerations. But the
SC denied MR.
 Aug. 21, 2008: Petitioner filed a Motion for Leave to
File a Second Motion for Reconsideration for the
reconsideration of the SC resolution raising
essentially the same arguments and prayers.
RULING: Motion for leave to file a second Motion for
Reconsideration is DENIED for lack of merit.
W/N her dismissal was justified – YES
W/N she may be awarded separation pay out of
humanitarian considerations – NO
 First of all, a 2nd MR is prohibited, except for
extraordinarily persuasive reasons [Sec. 2, Rule 52,
ROC]. Here, no extraordinary persuasive reasons
are present to allow the 2nd MR.
 Next, as re petitioner’s dismissal, the general rule is
that an employee who has been dismissed for any of
the just causes enumerated under Art. 282 of the
Labor Code is not entitled to separation pay. Only
unjustly dismissed employees are entitled to
retirement benefits and other privileges including
reinstatement and backwages.
 An exception, however, is that separation pay or
other financial assistance may be allowed to an
employee dismissed for just causes on the basis of
equity. This shall be allowed as a measure of social
justice only in those instances where the employee is
validly dismissed for causes other than serious
misconduct or those reflecting on his moral
character.
 Given the above, petitioner is not entitled to the
award of separation pay for violating the trust and
 confidence reposed in her by her employer when she
arrogantly demanded from respondent the
exorbitant amount of Php 2M in damages with a
threat of a lawsuit if the money was not paid within
five days. She also continually refused to cooperate
with PET’s investigation of her case.
 Lastly, petitioner tried to persuade the Court to
consider in her favor the length of her service to
PET, but in the end, failed. She claimed that she was
employed by PET for 26 years. However, it was later
on found out that she had only been there for 2
years and 9 months.
 The cases she cited to support her case were
misleading as the circumstances were totally
different from hers.
BEST WEAR GARMENTS v. ADELAIDA DE LEMOS and
CECILE OCUBILLO
December 5, 2012 | Villarama, Jr., J. | Nature of work of piece rate
workers
Digester: Sumagaysay, Rev
SUMMARY: Cecile and Adelaida were employed as sewers on
piece-rate basis. They were transferred to other areas of
operation so they filed for constructive dismissal alleging they
could no longer “earn as much” as before. The Court held that it
was within management prerogative to deploy them to work
different on different garments, and in absence of bad faith, such
should be upheld.
DOCTRINE: Being piece-rate workers assigned to individual
sewing machines, respondents’ earnings depended on the quality
and quantity of finished products. That their work output might
have been affected by the change in their specific work
assignments does not necessarily imply that any resulting
reduction in pay is tantamount to constructive dismissal. Workers
under piece-rate employment have no fixed salaries and their
compensation is computed on the basis of accomplished tasks.
FACTS:
 Petitioner Best Wear Garments (sole proprietorship owned by
Alex Sitosta) hired Respondents Cecile and Adelaida as sewers
on piece-rate basis on 1993 and 1994 respectively.
 May 20, and June 10, 2004, Adelaida and Cecile, respectively,
filed for illegal dismissal with prayer for backwages and other
accrued benefits, separation pay, service incentive leave pay,
and attorney’s fees.
 Both allege that they were arbitrarily transferred to other
areas of operation of petitioner’s garments company which
amounted to constructive dismissal as it resulted in less
earnings for them.
o Adelaida – could not earn as much as before
because by-products require long period of time to
finish; transfer was caused by her refusal to
render overtime work up to 7:00pm; request to
be returned to previous assignment was rejected as
she was “constrained not to report for work as
Sitostta had become indifferent to her since said
transfer of operation; salary was withheld.
o Cecile – alleged transfer was caused by her having
“incurred excessive absences since 2001”. Her
absences were due to her father becoming very sick
from 2001 to his death in 2003; she herself became
very sick; she was assigned to different machines
“whichever is available” and that “there were times
she could not earn for a day because there was no
available machine to work for; she was required to
render overtime work up to 7:00pm which she
refused since she was only paid up to 6:25pm.
 Petitioners denied terminating respondents who supposedly
committed numerous absences without leave (AWOL). They
claim that:
o Adelaida informed them that due to personal
problem, she intended to resign. Cecile also
intimated her intention to resign. Both demanded
separation pay but as the company had no existing
policy on granting separation pay, petitioner could
not act on their request.
o After that, both respondents never reported back to
work.
 o The allegation that their transfer was caused by
their refusal to work overtime was unfounded as
respondents were piece-rate workers and are not
paid according to the number of hours worked.
 LA Ruled in favor of Adelaida and Cecile. Held that
respondents were illegally dismissed. Ordered separation pay
and backwages.
o Respondents id not resign or abandon their jobs, the
ambiguities in circumstance are resolved in favor of
the workers.
o Termination because of AWOL should have been
exercised before dismissals have been effected.
o Illogical for respondents to resign then file a case for
illegal dismissal.
 NLRC Reversed LA. Respondents were not dismissed. Ordered
respondents to report back to work without backwages and for
petitioners to accept them.
o Alleged demotion is vague as they did simply stated
that by reason of their transfer, they did not earn as
much. They failed to state how much this was, if only
to determine if there was indeed diminution in
earnings
o Transfer was an exercise of management
prerogative.
 CA Reversed NLRC and reinstated LA Decision. Service
incentive pay shall be excluded in computation of monetary
award.
o No valid reason for transfer which entailed
reduction of earnings.
o Since plea to be returned to former posts was not
heeded, transfer was tantamount to constructive
dismissal.
o Unauthorized absences did not warrant a finding of
abandonment.
RULING: Petition GRANTED. CA decision REVERSED. NLRC
decision REINSTATED.
Whether CA erred in applying the law on constructive
dismissal – YES
 The right of employees to security of tenure does not give them
vested rights to their positions to the extent of depriving
management of its prerogative to change their assignments or
to transfer them. Thus, an employer may transfer or assign
employees from one office or area of operation to another,
provided there is no demotion in rank or diminution of salary,
benefits, and other privileges, and the action is not motivated
by discrimination, made in bad faith, or effected as a form of
punishment or demotion without sufficient cause.
 Being piece-rate workers assigned to individual sewing
machines, respondents’ earnings depended on the
quality and quantity of finished products. That their work
output might have been affected by the change in their
specific work assignments does not necessarily imply
that any resulting reduction in pay is tantamount to
constructive dismissal. Workers under piece-rate
employment have no fixed salaries and their
compensation is computed on the basis of accomplished
tasks.
 As admitted by respondent De Lemos, some garments or by-
products took a longer time to finish so they could not earn as
much as before. Also, the type of sewing jobs available would
depend on the specifications made by the clients of petitioner
company. Under these circumstances, it cannot be said that the
transfer was unreasonable, inconvenient or prejudicial to the
respondents.
 Such deployment of sewers to work on different types of
garments as dictated by present business necessity is within
the ambit of management prerogative which, in the absence of
bad faith, ill motive or discrimination, should not be interfered
with by the courts.
 There was no evidence that respondents were dismissed from
employment. There being no termination of employment by the
employer, the award of backwages cannot be sustained.
Backwages may be granted only when there is a finding of
illegal dismissal. In cases where there is no evidence of
dismissal, the remedy is reinstatement but without backwages.

NOTES:
 For those details which are not important but seems important.
JAMER v. NLRC
FACTS: Petitioners are cashiers of Isetann Department
Store were incurred the following shortages:
a) On the Shortage of P15,353.78:
The 3 petitioners, Lutgarda Inducta, Cristy
Amortizado and Corazon Jamer denied any involvement
in the loss of P15,353.78. Although the money, is under
their responsibility, not one of them gave any
explanation about the shortage or loss.
b) On the amount of P1,000.00 borrowed by Inducta
from Jamer:
On July 18, 1990, Lutgarda Inducta borrowed
money from respondents Jamer amounting to P1,000.00
to cover her shortage. Ms. Jamer said that Ms. Inducta
paid the amount on that day. But Ms. Jamer did not
report the shortage.
c) On the Underdeposit of Cash = P450.00.
Total cash admitted P65,428.05 (cash in drawer)
while Total cash remitted P64,978.05 (per tally sheet).
Overage P 450.00
d) On the P70.00 Replenishment of Petty Cash
Expenses:
She added that she previously incurred a
shortage amounting to P100.00. Then she used
the P70.00 to cover for the shortage. The remaining
balance of P30.00 was paid by Amortizado.
The labor arbiter ruled them having been illegally
dismissed. The NLRC reversed the ruling.
ISSUE: Were the petitioners validly dismissed?
HELD: Yes. The failure of the petitioners to report to
the management the irregularities constitute "fraud or
willful breach of the trust reposed in them by their
employer or duly authorized representative"--one of the
just causes of valid termination of employment. The
employer cannot be compelled to retain employees who
were guilty of malfeasance as their continued
employment will be prejudicial to the former's best
interest. The law, in protecting the rights of the
employees, authorizes neither oppression nor self-
destruction of the employer.
The cause of social justice is not served by upholding
the interest of petitioners in disregard of the right of
private respondents. Social justice ceases to be an
effective instrument for the equalization of the social
and economic forces by the State when it is used to
shield wrongdoing. While it is true that compassion and
human consideration should guide the disposition of
cases involving termination of employment since it
affects ones source or means of livelihood, it should not
be overlooked that the benefits accorded to labor do
not include compelling an employer to retain the
services of an employee who has been shown to be a
gross liability to the employer. It should be made clear
that when the law tilts the scale of justice in favor of
labor, it is but a recognition of the inherent economic
inequality between labor and management. The intent
is to balance the scale of justice; to put up the two
parties on relatively equal positions. There may be
cases where the circumstances warrant favoring labor
over the interests of management but never should the
scale be so tilted if the result is an injustice to the
employer, Justicia remini regarda est (Justice is to be
denied to none

Gandara vs. NLRC
Facts: The private respondent Silvestre Germano failed
to report from February 6 – 11, 1995 because her wife
gave birth on February 12, 1995. Two weeks after
private respondent returned to duty, and to his
surprise, he was met by his employer to personally tell
him that someone had been hired to take his place. He
was advised, however, that he was to be re-admitted in
June 1996. A case of illegal dismissal was commenced
by the private respondent with the Department of
Labor and Employment. The Labor Arbiter ordered the
petitioner to pay separation pay, backwages, SLIP and
attorney’s fees. The NLRC dismissed the appeal due to
failure to post cash or surety bond.
Issue: WON the private respondent was illegally
dismissed
Ruling: Yes, it appears decisively clear that private
respondent Silvestre Germano was illegally dismissed.
While a prolonged absence without leave may
constitute as a just cause of dismissal, its illegality
stems from the non-observance of due process.
The Labor Code explicitly provides, that :
No preventive suspension shall last longer than
thirty (30) days. The employer shall thereafter reinstate
the worker to his former or substantially equivalent
position or the employer may extend the period of
suspension provided that during the period of
extension, he pays the wages and other benefits due to
the worker. In such case, the worker shall not be bound
to reimburse the amount paid to him during the
extension if the employer decides after completion of
the hearing to dismiss the worker
In this case, the supposed suspension was expected
to last for more than the period allowed by law, thus
making the suspension constitutive of an illegal
dismissal
PAL v. NLRC
G.R. No. 85985 August 13, 1993
Facts: PAL completely revised its 1966 Code of
Discipline. The Code was circulated among the
employees and was immediately implemented, and
some employees were forthwith subjected to
the disciplinary measures embodied therein.
The Philippine Airlines Employees Association (PALEA)
filed a complaint before the National Labor Relations
Commission (NLRC). PALEA contended that PAL, by its
unilateral implementation of the Code, was guilty of
unfair labor practice, specifically Paragraphs E and G
of Article 249 and Article 253 of the Labor Code.
PALEA alleged that copies of the Code had been
circulated in limited numbers; that being penal in
nature the Code must conform with the requirements of
sufficient publication, and that the Code was arbitrary,
oppressive, and prejudicial to the rights of the
employees.
It prayed that implementation of the Code be held
in abeyance; that PAL should discuss the substance of
the Code with PALEA; that employees dismissed under
the Code be reinstated and their cases subjected to
further hearing; and that PAL be declared guilty of
unfair labor practice and be ordered to pay damages
PAL asserted its prerogative as an employer to prescibe
rules and regulations regarding employess' conduct in
carrying out their duties and functions, and alleging
that by implementing the Code, it had not violated the
collective bargaining agreement (CBA) or any provision
of the Labor Code. Assailing the complaint supported
by evidence, PAL maintained that Article 253 of the
Labor Code cited by PALEA reffered to the
requirements for negotiating a CBA which was
inapplicable as indeed the current CBA had
been negotiated.
Issue: W/N the formulation of a Code of Discipline
among employees is a shared responsibility of the
employer and the employees.
Ruling: Petitioner's assertion that it needed the
implementation of a new Code of Discipline considering
the nature of its business cannot be overemphasized. In
fact, its being a local monopoly in the business
demands the most stringent of measures to attain safe
travel for its patrons. Nonetheless, whatever
disciplinary measures are adopted cannot be properly
implemented in the absence of full cooperation of the
employees. Such cooperation cannot be attained if
the employees are restive on account, of their being left
out in the determination of cardinal and fundamental
matters affecting their employment.
Fuentes vs NLRC
Facts: Petitioners were regular employees of private
respondent Agusan Plantations, Inc., which was
engaged in the operation of a palm tree plantation in
Trento, Agusan del Sur, since September 1982.
Claiming that it was suffering business losses which
resulted in the decision of the head office in Singapore
to undertake retrenchment measures, private
respondent sent notices of termination to petitioners
and the Department of Labor and Employment (DOLE)
On 31 October 1990 petitioners filed with the DOLE
office in Cagayan de Oro City a complaint for illegal
dismissal with prayer for reinstatement, backwages
and damages against private respondent Agusan
Plantation, Inc., and/or Chang Chee Kong.The Labor
Arbiter ruled favour to the petitioner. Unfortunately,
the NLRC reversed the decision.
Issue: WON there is a valid retrenchment
Ruling;
NO, Under Art. 283 therefore retrenchment may be
valid only when the following requisites are met: (a) it
is to prevent losses; (b) written notices were served on
the workers and the Department of Labor and
Employment (DOLE) at least one (1) month before the
effective date of retrenchment; and, (c) separation pay
is paid to the affected workers.
The closure of a business establishment is a ground for
the termination of the services of an employee unless
the closing is for the purpose of circumventing
pertinent provisions of the Labor Code. But while
business reverses can be a just cause for terminating
employees, they must be sufficiently proved by the
employer
On 31 October 1990 petitioners filed with the DOLE
office in Cagayan de Oro City a complaint for illegal
dismissal with prayer for reinstatement, backwages
and damages against private respondent Agusan
Plantation, Inc., and/or Chang Chee Kong
As regards the requirement of notices of termination to
the employees, private respondents failed to comply
with this requisite. The earliest possible date of
termination should be 12 October 1990 or one (1)
month after notice was sent to DOLE unless the notice
of termination was sent to the workers later than the
notice to DOLE on 12 September 1990, in which case,
the date of termination should be at least one (1) month
from the date of notice to the workers. Petitioners were
terminated less than a month after notice was sent to
DOLE and to each of the workers.
The State is bound under the Constitution to afford full
protection to labor and when conflicting interests of
labor and capital are to be weighed on the scales of
social justice the heavier influence of the latter should
be counterbalanced with the sympathy and compassion
the law accords the less privileged worker. This is only
fair if the worker is to be given the opportunity and the
right to assert and defend his/her cause not as a
subordinate but as part of management with which
he/she can negotiate on even plane. Thus labor is not a
mere employee of capital but its active and equal
partner.
PLDT vs. NLRC
Facts: Private respondent Lettie Corpuz was employed
as traffic operator at the Manila International Traffic
Division (MITD) by the Philippine Long Distance
Telephone Company (PLDT) for ten years and nine
months, from September 19, 1978, until her dismissal
on June 17, 1989.Her primary task was to facilitate
requests for incoming and outgoing international calls
through the use of a digital switchboard.
On July 26, 1988, MITD Manager Erlinda Kabigting
directed respondent to explain her alleged infraction,
that is, facilitating 34 calls using the disconnected
number. Instead of tendering the required explanation,
respondent requested a formal investigation to allow
her to confront the witnesses and rebut the proofs that
may be brought against her. On grounds of serious
misconduct and breach of trust, the Legal Department
recommended her dismissal. In a letter dated June 16,
1989, respondent was terminated from employment
effective the following day.
The Labor Arbiter ruled for the reinstatement of the
private respondent and payment of backwages. The
NLRC affirmed the decision.
Issue: WON the private respondent was illegally
dismissed.
Ruling: Yes, while the power to dismiss is a normal
prerogative of the employer, the same is not without
limitations. The right of an employer to freely discharge
his employees is subject to regulation by the State,
basically through the exercise of its police power. This
is so because the preservation of the lives of citizens is
a basic duty of the State, an obligation more vital than
the preservation of corporate profits.
Petitioner insists that respondent was guilty of
defrauding them when she serviced 56 of the 439 calls
coming from telephone number 98-68-16 and received
numerous requests for overseas calls virtually from the
same calling number, which could not have been a
mere coincidence but most likely was a pre-arranged
undertaking in connivance with certain subscribers.
The records show, however, that the subject phone
calls were neither unusual nor coincidental as other
operators shared similar experiences. A certain Eric
Maramba declared that it is not impossible for an
operator to receive continuous calls from the same
telephone number. He testified that at one time, he was
a witness to several calls consistently effected from
9:30 p.m. to 5:30 a.m. The calls having passed the
verification tone system, the incident was undoubtedly
alarming enough but there was no way that he or his
co-operators could explain the same.
It should be borne in mind that in termination
cases, the employer bears the burden of proving that
the dismissal is for just cause failing which would mean
that the dismissal is not justified and the employee is
entitled to reinstatement. In the instant case, the
petitioner failed to convincingly establish valid bases
on the alleged serious misconduct and loss of trust and
confidence.
In carrying out and interpreting the Labor Codes
provisions and its implementing regulations, the
working man’s welfare should be the primordial and
paramount consideration. This kind of interpretation
gives meaning and substance to the liberal and
compassionate spirit of the law as provided for in
Article 4 of the Labor Code, as amended, which states
that all doubts in the implementation and interpretation
of the provisions of the Labor Code including its
implementing rules and regulations shall be resolved in
favor of labor as well as the Constitutional mandate
that the State shall afford full protection to labor and
promote full employment opportunities for
all. Likewise, it shall guarantee the rights of all workers
to security of tenure. Such constitutional right should
not be denied on mere speculation of any unclear and
nebulous basis
MERALCO vs. JAN CARLO GALA (2012)
FACTS: Gala was a probationary linesman of Meralco and assigned at the
Valenzuela Sector. Barely four months on the job, Gala was dismissed for
alleged pilferages of Meralcos electrical supplies wherein a certain non-
Meralco employee, Norberto Llanes, took electrical supplies from their truck
with their knowledge when they were fixing a certain electrical post in
Pacheco Subdivision. Unknown to him and the crew, they were under
surveillance by a Meralco task force. When asked to explain, Gala argued
that he was far from the truck where the pilferage happened, he did not have
an inkling of the illegal activity, he did not call the attention of his superiors
because he was a mere linesman and that he was just following instructions.
His employment was terminated due to misconduct and dishonesty. Upon
compulsory arbitration, the labor arbiter found in favor of Meralco. NLRC
reversed and ordered reinstatement. CA affirmed the NLRC decision.
Meralco argues that Gala was merely a probationary employee and that he
failed to meet the basic standards.
Gala on the other hand argues that the petition of Meralco should be
dismissed since there were procedural defects in the petition, that the
Verification and Certification, Secretarys Certificate and Affidavit of Service
do not contain the details of the Community or Residence Tax Certificates of
the affiants and the lawyers who signed the petition failed to indicate their
updated Mandatory Continuing Legal Education (MCLE) certificate numbers,
in violation of the rules.
ISSUE: WON the technical rules of procedure binding and are to be strictly
construed?
HELD: NO. The SC ruled that it is the spirit and intention of labor legislation
that the NLRC and the labor arbiters shall use every reasonable means to
ascertain the facts in each case speedily and objectively, without regard to
technicalities of law or procedure, provided due process is duly observed.
[19]
In keeping with this policy and in the interest of substantial justice, we
deem it proper to give due course to the petition, especially in view of the
conflict between the findings of the labor arbiter, on the one hand, and the
NLRC and the CA, on the other. As we said in S.S. Ventures International,
Inc. v. S.S. Ventures Labor Union,[20] the application of technical rules of
procedure in labor cases may be relaxed to serve the demands of substantial
justice.
SC however ruled that Gala should be dismissed because, as a probationary
employee, there was substantial evidence that he was not able to comply
with the standards of Meralco as provided in the Company’s Code of
Discipline.
1. Doubts
 a. In employment contract interpretation
PRICE vs. INNODATA PHIL (2008)
FACTS: (INNODATA) is a domestic corporation engaged in the data
encoding and data conversion business. It employed encoders, indexers,
formatters, programmers, quality/quantity staff, and others, to maintain its
business and accomplish the job orders of its clients. Petitioners Cherry J.
Price, Stephanie G. Domingo, and Lolita Arbilera were employed as
formatters by INNODATA. The parties executed an employment contract
denominated as a Contract of Employment for a Fixed Period, stipulating that
the contract shall be for a period of one year ending February 16, 2000. On
the said date, the company wrote a letter to the petitioners stating that it is
their last day of work. In May 2000, the petitioners filed a case of illegal
dismissal claiming that they should be considered regular employees since
their positions as formatters were necessary and desirable to the usual
business of INNODATA as an encoding, conversion and data processing
company. INNODATA argued that their employment was only for a fixed
term, which expired according to the contract. LA ruled illegal dismissal while
NLRC and CA reversed the decision.
ISSUE: 1. WON the petitioners are to be considered regular employees?
2. How should ambiguities in the employment contract be construed?
HELD:
1. WON the petitioners are to be considered regular employees?
YES, they are regular employees.
Under Article 280 of the Labor Code, the applicable test to determine
whether an employment should be considered regular or non-regular is the
reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. [22]
In the case at bar, petitioners were employed by INNODATA on 17
February 1999 as formatters. The primary business of INNODATA is data
encoding, and the formatting of the data entered into the computers is an
essential part of the process of data encoding. Formatting organizes the data
encoded, making it easier to understand for the clients and/or the intended
end users thereof. Undeniably, the work performed by petitioners was
necessary or desirable in the business or trade of INNODATA.
2. How should ambiguities in the employment contract be interpreted?
Being a contract of adhesion, they are to be construed strictly against
the party who prepared it.
The employment contract submitted to the NLRC stated to take
effect on February 16, 1999 but appeared to have been crossed out to make
it appear September 6, 1999. There is now doubt as to when the contract
took effect.
Such modification and denial by respondents as to the real beginning
date of petitioner’s employment contracts render the said contracts
ambiguous. The contracts themselves state that they would be effective
until 16 February 2000 for a period of one year. If the contracts took effect
only on 6 September 1999, then its period of effectivity would obviously be
less than one year, or for a period of only about five months.
Obviously, respondents wanted to make it appear that petitioners
worked for INNODATA for a period of less than one year. The only reason the
Court can discern from such a move on respondent’s part is so that they can
preclude petitioners from acquiring regular status based on their employment
for one year. Nonetheless, the Court emphasizes that it has already found
that petitioners should be considered regular employees of INNODATA by the
nature of the work they performed as formatters, which was necessary in the
business or trade of INNODATA. Hence, the total period of their employment
becomes irrelevant.
Even assuming that petitioner’s length of employment is material,
given respondents muddled assertions, this Court adheres to its
pronouncement in Villanueva v. National Labor Relations Commission, to the
effect that where a contract of employment, being a contract of adhesion, is
ambiguous, any ambiguity therein should be construed strictly against the
party who prepared it. The Court is, thus, compelled to conclude that
petitioner’s contracts of employment became effective on 16 February 1999,
and that they were already working continuously for INNODATA for a year.
Further attempting to exonerate itself from any liability for illegal dismissal,
INNODATA contends that petitioners were project employees whose
employment ceased at the end of a specific project or undertaking. This
contention is specious and devoid of merit.
In Philex Mining Corp. v. National Labor Relations Commission, the Court
defined project employees as those workers hired (1) for a specific project or
undertaking, and wherein (2) the completion or termination of such project
has been determined at the time of the engagement of the employee.
Scrutinizing petitioner’s employment contracts with INNODATA,
however, failed to reveal any mention therein of what specific project or
undertaking petitioners were hired for. Although the contracts made general
references to a project, such project was neither named nor described at all
therein. The conclusion by the Court of Appeals that petitioners were hired
for the Earthweb project is not supported by any evidence on record. The
one-year period for which petitioners were hired was simply fixed in the
employment contracts without reference or connection to the period required
for the completion of a project. More importantly, there is also a dearth of
evidence that such project or undertaking had already been completed or
terminated to justify the dismissal of petitioners. In fact, petitioners alleged -
and respondents failed to dispute that petitioners did not work on just one
project, but continuously worked for a series of projects for various clients of
INNODATA.
In Magcalas v. National Labor Relations Commission, the Court
struck down a similar claim by the employer therein that the dismissed
employees were fixed-term and project employees. The Court here reiterates
the rule that all doubts, uncertainties, ambiguities and insufficiencies should
be resolved in favor of labor. It is a well-entrenched doctrine that in illegal
dismissal cases, the employer has the burden of proof. This burden was not
discharged in the present case.
MARCOPPER MINING vs. NLRC
FACTS: On 23 August 1984, Marcopper Mining Corporation, a
corporation duly organized and existing under the laws of the
Philippines, engaged in the business of mineral prospecting,
exploration and extraction, and private respondent NAMAWU-
MIF, a labor federation duly organized and... registered with the
Department of Labor and Employment (DOLE), to which the
Marcopper Employees Union (UNION) is affiliated, entered into
a Collective Bargaining Agreement (CBA) effective from 1 May
1984 until 30 April 1987 which involves the following terms:
Increase in minimum wage:
May 1,1985 5%
May 1,1986 5%
“It is expressly understood that this wage increase shall be exclusive of any
increase in the minimum wage and/or mandatory living allowance that may
be promulgated during the life of this Agreement.”
In compliance with the amended CBA, petitioner implemented the initial 5%
wage increase due on 1 May 1986.
The problem arose when, on 1 June 1987, Executive Order (E.O.) No. 178
was promulgated mandating the integration of the cost of living allowance
into the basic wage of workers resulting to an INCREASE of minimum wage.
Following the CBA, petitioner MARCOPPER implemented the second five
percent (5%) wage increase due on 1 May 1987 and thereafter ADDED the
integrated COLA.
Private respondent UNION however, assailed the manner in which the
second wage increase was effected. It argued that the COLA should first be
integrated into the basic wage before the 5% wage increase is computed as
mandated by EO 178.
Consequently, on 15 December 1988, the union filed a complaint for
underpayment of wages before the Regional Arbitration Branch IV, Quezon
City.
On 24 July 1989, the Labor Arbiter promulgated a decision in favor of the
union.
Petitioner appealed the Labor Arbiter's decision and on 18 November 1991
the NLRC rendered its decision sustaining the Labor Arbiter's ruling.
It is petitioner's contention that the basic wage referred to in the CBA pertains
to the "unintegrated" basic wage. Petitioner maintains that the rules on
interpretation of contracts, particularly Art. 1371 of the New Civil Code which
states that:
Art. 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered
should govern.
Siding with the petitioner, the Solicitor General opines that for the purpose of
complying with the obligations imposed by the CBA, the integrated COLA
should not be considered due to the exclusivity of the benefits under the said
CBA and E.O. No. 178.
Private respondent counters by asserting that the purpose, nature and
essence of CBA negotiation is to obtain wage increases and benefits over
and above what the law provides and that the principle of non-diminution of
benefits should prevail.
Issues:
What should be the basis for the computation of the CBA increase, the basic
wage without the COLA or the so-called "integrated" basic wage which, by
mandate of E.O. No. 178, includes the COLA.
Ruling:
We rule for the respondent UNION. Hence, the COLA should first be
integrated.
THE DOCTRINE OF LIBERAL INTERPRETATION IN FAVOR OF LABOR IN
CASE OF DOUBT IS NOT APPLICABLE TO THE INSTANT CASE.
When conflicting interests of labor and capital are to be weighed on the
scales of social justice, the heavier influence of the latter should be counter-
balanced by sympathy and compassion the law must accord the
underprivileged worker. The CBA is imbued with public interest. Compliance
with EO 178 is mandatory and beyond contractual stipulation.
The principle that the CBA is the law between the contracting parties stands
strong and true. However, the present controversy involves not merely an
interpretation of CBA provisions. More importantly, it requires a
determination of the effect of... an executive order on the terms and the
conditions of the CBA.
It is unnecessary to delve too much on the intention of the parties as to what
they allegedly meant by the term "basic wage" at the time the CBA and MOA
were executed because there is no question that as of 1 May 1987, as
mandated by E.O. No. 178, the basic wage of workers, or... the statutory
minimum wage, was increased with the integration of the COLA. As of said
date, then, the term "basic wage" includes the COLA. This is what the law
ordains and to which the collective bargaining agreement of the parties must
conform.
Petitioner's arguments eventually lose steam in the light of the fact that
compliance with the law is mandatory and beyond contractual stipulation by
and between the parties; consequently, whether or not petitioner intended the
basic wage to include the COLA becomes... immaterial. There is evidently
nothing to construe and interpret because the law is clear and unambiguous.
Unfortunately for petitioner, said law, by some uncanny coincidence,
retroactively took effect on the same date the CBA increase became
effective.
Therefore, there cannot be any doubt that the computation of the CBA
increase on the basis of the "integrated" wage does not constitute a violation
of the CBA.
What E.O. No. 178 did was exactly to integrate the COLA under Wage
Orders Nos. 1, 2, 3, 5 and 6 into the basic pay so as to increase the statutory
daily minimum wage.
Integration of monetary benefits into the basic pay of workers is not a new
method of increasing the minimum wage.
The purpose of E.O. No. 178 is to improve the lot of the workers covered by
the said statute. We are bound to ensure its fruition.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
Principles:
While the terms and conditions of the 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 but impressed 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 a practical and realistic
construction upon it, giving due consideration to the context in which it is
negotiated and purpose which it is intended to serve.
ii.) In Appreciation of Evidence
ASUNCION vs. NLRC (2001)
FACTS: Petitioner was an accountant/bookkeeper of the Mabini Medical
Clinic. The DOLE conducted a routine inspection of the company and
discovered upon disclosure of the petitioner Asuncion that there were
violations of the labor standards law such as the non-coverage of SSS of the
employees. Subsequently, the Director of the clinic issued a memo charging
petitioner with the following:
1. Chronic Absentism (sic) You have incurred since Aug. 1993 up to
the present 35 absences and 23 half-days.
2. Habitual tardiness You have late (sic) for 108 times. As shown on
the record book.
3. Loitering and wasting of company time on several occasions and
witnessed by several employees.
4. Getting salary of an absent employee without acknowledging or
signing for it.
5. Disobedience and insubordination - continued refusal to sign
memos given to you.[1]
Petitioner was required to explain within two (2) days why she should not be
terminated based on the above charges. She submitted her response 3 days
later and on the same day, she was dismissed. She then filed a case of
illegal dismissal. The LA ruled that there was illegal dismissal since the
company failed to present in evidence the time cards, logbooks or record
book which complainant signed recording her time in reporting for work.
These documents, according to the Labor Arbiter, were in the possession of
the private respondents. The NLRC set it saying that petitioner admitted that
charges.
ISSUE: WON Petitioner was illegally dismissed?
HELD: YES.
There are serious doubts in the evidence on record as to the factual basis of
the charges against petitioner. These doubts shall be resolved in her favor in
line with the policy under the Labor Code to afford protection to labor and
construe doubts in favor of labor. [22] The consistent rule is that if doubts exist
between the evidence presented by the employer and the employee, the
scales of justice must be tilted in favor of the latter. The employer must
affirmatively show rationally adequate evidence that the dismissal was for a
justifiable cause. Not having satisfied its burden of proof, we conclude that the
employer dismissed the petitioner without any just cause. Hence, the
termination is illegal.
Here, the evidence submitted was merely unsigned handwritten records and
printouts. This is insufficient to justify a dismissal. The provision for flexibility
in administrative procedure does not justify decisions without basis in
evidence having rational probative value. Here both the handwritten listing
and computer print outs being unsigned, so the authenticity is suspect and
devoid of any rational probative value. Nor was there due process. There is
no showing that there was warning of the absences and tardiness. The 2
day period given to answer the allegations is an unreasonably short period of
time.
iii.) In application of policies and programs
PNCC vs. NLRC
Doctrine: In the interpretation of an employers retrenchment
program providing for separation benefits, all doubts should be
construed in favor of the underprivileged worker.
FACTS: The facts in this case are undisputed. From July 14,
1981 until September 23, 1982, Petitioner PNCC employed
Private Respondent Mendoza as Driver II at its Magat Dam
Project. A few days after, on September 27, 1982, private
respondent was again employed as Driver II at PNCCs LRT
Project until January 31, 1983. The following day, February 1,
1983, UNTIL August 1, 1984, petitioner deployed private
respondent, also as Driver II, in its Saudi Arabia Project. It took
more than six months for private respondent to be repatriated to
the Philippines. Upon his return, he resumed his work as Driver
II in the PG-7B Project of petitioner from February 22, 1985 until
May 18, 1986. For more than two years afterwards, private
respondent was not given any work assignment. On August 17,
1988, he was hired anew as Driver II for the Molave Project of
petitioner. This lasted until June 15, 1989. Thereafter, private
respondent claimed the benefits of petitioners Retrenchment
Program, particularly under paragraph. 2.1 thereof which
provides:
Coverage. -- Special separation benefits shall be given to all regular, project
employees and permanent employees who have rendered at least one (1)
year of continuous service with PNCC and are actively employed in the
company as of the date of their separation.
However, petitioner denied his claim. Petitioner argues further that private
respondent was employed only for ten (10) months
Thus, on September 5, 1989, private respondent filed a complaint for
nonpayment of separation pay as provided for in said program.
The Labor arbiter as well as the NLRC granted the separation pay of the
Petitioner.
ISSUE: WON the Petitioner is entitled to the separation pay as provided
under the Retrenchment Program?
HELD: YES.
Under the separation program, an employee may qualify if he has rendered
at least one year of continuous service. As public respondent has stated, the
plain language of the program did not require that continuous service be
immediately prior to the employees separation. Thus, private respondents
other stints at PNCC prior to his last service in 1989 can properly be
considered in order to qualify him under the program. That the duration of
private respondents last stint was less than one year does not militate
against his qualification under the program. We grant this liberality in favor of
private respondent in the light of the rule in labor law that when a conflicting
interest of labor and capital are weighed on the scales of social justice, the
heavier influence of the latter must be counter-balanced by the sympathy and
compassion the law must accord the under-privileged worker.
2. Burden of Proof
a. In Illegal dismissal cases
GURANGO VS. BEST CHEMICALS PHILS. INC. (BCPI)

Doctrine: In termination cases, the employer has the burden of proving, by
substantial evidence, that the dismissal is for just cause. If the employer fails
to discharge the burden of proof, the dismissal is deemed illegal.
FACTS: Gurango and Albao worked as boiler operator and security guard,
respectively, in BCPI. It was alleged that Gurango brought an unloaded
camera into the work premises. The said camera was confiscated by
security guard Albao and a fistfight ensued between him and Gurango. Albao
on the otherhand argued that Gurango also tried to grab his gun which
prompted him to engage with a fistfight. This was denied by Gurango.
Gurango was then dismissed from the company because of starting a fight
and of bringing the said camera inside the work premises which are
violations of the company’s Code of Discipline stating:
Please be reminded of the following existing rules and regulations that all
employees are expected to strictly observe and adhere to:
xxxx
Bringing in to work station/area of personal belongings other than those
required in the performance of one’s duty which disrupt/obstruct
Company’s services and operations, except those authorized by higher
authorities. This offense shall include the following items [sic]: radios,
walkman, discman, make-up kits, ladies’ bags, workers’ knapsacks
and the like which must be left behind and safe kept [sic] in the
employees’ respective lockers. This being a Serious Offense, the
penalty of which is six (6) days suspension from work without pay.
Gurango filed an illegal dismissal case against BCPI and criminal case of
slight physical injuries against Albao. Labor Arbiter and NLRC rulex in favor
of Gurango. The CA however reversed stating that Gurango engaged in the
fistfight.
ISSUE: 1. Who has the burden of proof in illegal dismissal cases?
2. WON Gurango was illegally dismissed?
1. Who has the burden of proof in illegal dismissal cases?
In termination cases, the employer has the burden of proving, by substantial
evidence, that the dismissal is for just cause. If the employer fails to
discharge the burden of proof, the dismissal is deemed illegal.
When there is no showing of a clear, valid and legal cause for the termination
of employment, the law considers the matter a case of illegal dismissal and
the burden is on the employer to prove that the termination was for a valid or
authorized cause. And the quantum of proof which the employer must
discharge is substantial evidence. An employee’s dismissal due to serious
misconduct must be supported by substantial evidence. Substantial evidence
is that amount of relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally reasonable,
might conceivably opine otherwise.
2. WON Gurango was illegally dismissed? YES.
In the present case, aside from Albao’s statement, BCPI did not present any
evidence to show that Gurango engaged in a fistfight. Moreover, there is no
showing that Gurango’s actions were performed with wrongful intent.
The surrounding circumstances show that Gurango did not engage in a
fistfight. Witness Mr. Juanitas corroborated Gurango’s version of the facts
while nobody corroborated Albao’s version. The Labor Arbiter found
Gurango’s statement credible and unblemished and found Albao’s statement
contradictory. Lastly, the Court of Appeals reversal of the findings of fact of
the Labor Arbiter and the NLRC is baseless.
LABADAN vs. FOREST HILLS (2008)
DOCTRINE: While in cases of illegal dismissal, the employer bears the
burden of proving that the dismissal is for a valid or authorized cause, the
employee must first establish by substantial evidence the fact of dismissal.
FACTS: Labadan was hired by private respondent Forest
Hills Mission Academy (Forest Hills) in July 1989 as an elementary school
teacher. From 1990 up to 2002, petitioner was registrar and secondary school
teacher.
Petitioner alleged that she was allowed to go on leave from Forest Hills, and
albeit she had exceeded her approved leave period, its extension was
impliedly approved by the school principal because she received no warning
or reprimand and was in fact retained in the payroll up to 2002.
To belie petitioners claim that she was dismissed, Forest Hills submitted a list
of faculty members and staff from School Year 1998-1999 up to School Year
2001 to 2002 which included her name.
In 2003, petitioner filed a complaint against respondent Forest Hills for illegal
dismissal, non-payment of overtime pay, holiday pay, allowances, 13 th month
pay, service incentive leave, illegal deductions, and damages.
Labor Arbiter ruled that she was illegally dismissed. NLRC reversed. CA
dismissed the petition for non-payment of docket fees.
ISSUE: WON Labadan was illegally dismissed?
HELD: There was no illegal dismissal. The SC ruled that while in cases of
illegal dismissal, the employer bears the burden of proving that the dismissal
is for a valid or authorized cause, the employee must first establish by
substantial evidence the fact of dismissal.
The records do not show that petitioner was dismissed from the
service. They in fact show that despite petitioners absence from July 2001 to
March 2002 which, by her own admission, exceeded her approved leave, she
was still considered a member of the Forest Hills faculty which retained her in
its payroll.
Petitioner argues, however, that she was constructively dismissed
when Forest Hills merged her class with another so much that when she
reported back to work, she has no more claims to hold and no more work to
do.
Petitioner, however, failed to refute Forest Hills claim that when she
expressed her intention to resume teaching, classes were already ongoing
for School Year 2002-2003. It bears noting that petitioner simultaneously held
the positions of secondary school
teacher and registrar and, as the NLRC noted, she could have resumed her
work as registrar had she really wanted to continue working with Forest Hills
Watchman vs Lumahan
G.R. No. 212096, October 14, 2015
NIGHTOWL WATCHMAN & SECURITY AGENCY, INC., petitioner, vs.
NESTOR LUMAHAN, respondent.
FACTS: Sometime in December 1996, Nightowl hired Nestor P. Lumahan
(Lumahan) as a security guard. Lumahan's last assignment was at the
Steelworld Manufacturing Corporation (Steelworld).
Lumahan filed before the labor arbiter a complaint for illegal dismissal;
underpayment of wages; nonpayment of overtime pay, premium pay for
holiday and rest day, holiday pay, and service incentive leave; separation
pay; damages and attorney's fees against Nightowl and/or Engr. Raymundo
Lopez.
Then, he filed an amended complaint to include nonpayment of 13th month
pay and illegal suspension. He also corrected his date of employment and
the date of his dismissal from May 1999 to June 9, 1999. Lumahan admitted
in his pleadings that he did not report for work from May 16, 1999 to June 8,
1999, but claimed in defense that he had to go to Iloilo to attend to his dying
grandfather. He alleged that when he asked for permission to go on leave,
Nightowl refused to give its consent. Steelworld, however, gave him
permission to leave for Iloilo. When he reported back to work on June 9,
1999, Nightowl did not allow him to return to duty.
Nightowl, on the other hand, claimed that on April 22, 1999, Lumahan left his
post at Steelworld and failed to report back to work since then. It argued that
it never dismissed Lumahan and that he only resurfaced when he filed the
present complaint.
LA Espiritu dismissed the complaint for illegal dismissal, separation pay, and
damages, but ordered Nightowl and/or Engr. Raymundo Lopez to jointly and
solidarity pay Lumahan wage differentials, 13th month pay differentials,
service incentive leave, holiday pay, premium pay for holiday and rest day
differentials, and overtime pay. Parties filed their appeal before the National
Labor Relations Commission (NLRC).
The NLRC remanded the case to the labor arbiter. LA Demaisip declared that
Lumahan had been illegally dismissed, and ordered Nightowl to pay
backwages and separation pay in lieu of reinstatement.
LA Demaisip dismissed Lumahan's other money claims for lack of merit.
Nightowl appealed LA Demaisip decision to the NLRC. NLRC granted
Nightowl's appeal; set aside and reversed LA Demaisip decision; dismissed
the complaint for illegal dismissal; deleted the award of backwages and
separation pay in lieu of reinstatement; and affirmed the dismissal of the
money claims. Lumahan elevated the case to the CA via a petition for
certiorari.
The CA granted Lumahan's certiorari petition after finding grave abuse of
discretion in the NLRC's.The CA ruled that Nightowl failed to discharge its
burden of proving that Lumahan unjustly refused to return to work. The fact
that Lumahan did not receive any notice whatsoever sufficiently shows that
Nightowl had no valid cause to terminate Lumahan's employment; hence,
Lumahan was illegally dismissed.
ISSUE: Whether or not Lumahan was illegally dismissed.
RULING:
NO. The SC find that the CA erred in disregarding the NLRC's conclusion
that there had been no dismissal, and in immediately proceeding to tackle
Nightowl's defense that Lumahan abandoned his work.
In every employee dismissal case, the employer bears the burden of proving
the validity of the employee's dismissal, i.e., the existence of just or
authorized cause for the dismissal and the observance of the due process
requirements. The employer's burden of proof, however, presupposes that
the employee had in fact been dismissed, with the burden to prove the fact of
dismissal resting on the employee. Without any dismissal action on the part
of the employer, valid or otherwise, no burden to prove just or authorized
cause arises.
As no dismissal was carried out in this case, any consideration of
abandonment - as a defense raised by an employer in dismissal situations
-was clearly misplaced. To our mind, the CA again committed a reversible
error in considering that Nightowl raised abandonment as a defense.
Abandonment, as understood under our labor laws, refers to the deliberate
and unjustified refusal of an employee to resume his employment. It is a form
of neglect of duty that constitutes just cause for the employer to dismiss the
employee.
Under this construct, abandonment is a defense available against the
employee who alleges a dismissal. Thus, for the employer "to successfully
invoke abandonment, whether as a ground for dismissing an employee or as
a defense, the employer bears the burden of proving the employee's
unjustified refusal to resume his employment." This burden, of course,
proceeds from the general rule that places the burden on the employer to
prove the validity of the dismissal.
In cases where no dismissal took place, the proper award is reinstatement,
without backwages, not as a relief for any illegal dismissal but on equitable
grounds. When, however, reinstatement of the employee is rendered
impossible, as when the employee had been out for a long period of time, the
award of separation pay is proper.
Penaflor vs Outdoor Clothing - G.R. No. 177114. January
21, 2010)
FACTS: Peññ aflor was hired oñ September 2, 1999 as probatioñary
HRD Mañager of respoñdeñt Outdoor Clothiñg Mañufacturiñg
Corporatioñ. After Peññ aflor returñed from his field work oñ March
13, 2000, his officemates iñformed him that while he was away,
Syfu had appoiñted Edwiñ Bueñaobra as the coñcurreñt HRD añd
accouñtiñg Mañager. He tried to talk to Syfu to clarify the matter,
but was uñable to do so. Peññ aflor claimed that uñder these
circumstañces, he had ño optioñ but to resigñ. He submitted a
letter to Syfu declariñg his irrevocable resigñatioñ from his
employmeñt with Outdoor Clothiñg effective at the close of office
hours oñ March 15, 2000. Peññ aflor theñ filed a complaiñt for illegal
dismissal with the labor arbiter, claimiñg that he had beeñ
coñstructively dismissed. Outdoor Clothiñg deñied Peññ aflor’s
allegatioñ of coñstructive dismissal. It posited iñstead that
Peññ aflor had voluñtarily resigñed from his work. The labor arbiter
agreed with Peñaflor añd issued a decisioñ iñ his favor. Oñ appeal,
the NLRC reversed the arbiter’s decisioñ añd the CA affirmed the
NLRC’s decisioñ. Heñce, petitioñer filed a petitioñ for review
before the SC.
ISSUE: Cañ Peññ aflor’s resigñatioñ be coñsidered as coñstructive
dismissal equivaleñt to añ illegal dismissal?
RULING: Yes. Peññ aflor started workiñg for the compañy oñ
September 2, 1999 so that by March 1, 2000, his probatioñary
period would have eñded añd he would have become a regular
employee. We fiñd it highly uñlikely that he would resigñ oñ March
1 añd would simply leave giveñ his uñdisputed record of haviñg
successfully worked withiñ his probatioñary period. It does ñot
appear souñd añd logical to us that añ employee would teñder his
resigñatioñ oñ the very same day he was eñtitled by law to be
coñsidered a regular employee, especially wheñ a dowñsiziñg was
takiñg place añd he could have availed of its beñefits if he would be
separated from the service as a regular employee. It was strañge,
too, that he would submit his resigñatioñ oñ March 1 añd keep
quiet about this uñtil its effective date oñ March 15. Iñ our view, it
is more coñsisteñt with humañ experieñce that Peññ aflor iñdeed
learñed of the appoiñtmeñt of Bueñaobra oñly oñ March 13, 2000
añd reacted to this by teñderiñg his resigñatioñ letter after
realiziñg that he would oñly face hostility añd frustratioñ iñ his
workiñg eñviroñmeñt. Three very basic labor law priñciples
support this coñclusioñ añd militate agaiñst the compañy’s case.
The first is the settled rule that iñ employee termiñatioñ disputes,
the employer bears the burdeñ of proviñg that the employee’s
dismissal was for just añd valid cause. That Peññ aflor did iñdeed file
a letter of resigñatioñ does ñot help the compañy’s case as, other
thañ the fact of resigñatioñ, the compañy must still prove that the
employee voluñtarily resigñed. There cañ be ño valid resigñatioñ
where the act was made uñder compulsioñ or uñder circumstañces
approximatiñg compulsioñ, such as wheñ añ employee’s act of
hañdiñg iñ his resigñatioñ was a reactioñ to circumstañces leaviñg
him ño alterñative but to resigñ. Iñ sum, the evideñce does ñot
support the existeñce of voluñtariñess iñ Peññ aflor’s resigñatioñ.
Añother basic priñciple is that expressed iñ Article 4 of the Labor
Code—that all doubts iñ the iñterpretatioñ añd implemeñtatioñ of
the Labor Code should be iñterpreted iñ favor of the workiñgmañ.
Thus, we fiñd that Peññ aflor was coñstructively dismissed giveñ the
hostile añd discrimiñatory workiñg eñviroñmeñt he fouñd himself
iñ, particularly evideñced by the escalatiñg acts of uñfairñess
agaiñst him that culmiñated iñ the appoiñtmeñt of añother HRD
mañager without añy prior ñotice to him. Where ño less thañ the
compañy’s chief corporate officer was agaiñst him, Peññ aflor had ño
alterñative but to resigñ from his employmeñt.
Last but ñot the least, we have repeatedly giveñ sigñificañce iñ
abañdoñmeñt añd coñstructive dismissal cases to the employee’s
reactioñ to the termiñatioñ of his employmeñt. We fiñd from the
records that Peññ aflor sought almost immediate official recourse to
coñtest his separatioñ from service through a complaiñt for illegal
dismissal. This is ñot the act of oñe who voluñtarily resigñed; his
immediate complaiñts characterize him as oñe who deeply felt that
he had beeñ wroñged.
MA. FININA E. VICENTE Petitioner v. CA, Former Seventeenth Division and
CINDERELLA MARKETING CORPORATION, Respondents.
GR NO. 175988 August 24, 2007
DOCTRINE:
General rule in termination cases, burden of proof rests upon the employer
to show that the dismissal is for a just and valid cause and failure to do so would
necessarily mean that the dismissal was illegal.
In St. Michael Academy v. NLRC mere allegations of threat or force do not constitute
substantial evidence to support a finding of forced resignation. The SC enumerated
the requisites for intimidation to vitiate consent as follows:
(1) that the intimidation caused the consent to be given;
(2) that the threatened act be unjust or unlawful;
(3) that the threat be real or serious, there being evident disproportion between
the evil and the resistance which all men can offer, leading to the choice of
doing the act which is forced on the person to do as the lesser evil; and
(4) that it produces a well-grounded fear from the fact that the person from
whom it comes has the necessary means or ability to inflict the threatened
injury to his person or property. x x x
FACTS:
Petitioner Finina E. Vicente was employed by respondent Cinderella
Marketing Corpo (Cinderella) as Management Coordinator in Jan 1990. Prior to her
resignation in Feb 2000, she held the position of Consignment Operations Manager.
She was tasked with the oversight, supervision and management of the Consignment
Department dealing directly with Cinderellas consignors. Petitioner alleged that it has
been a practice among the employees of Cinderella to obtain cash advances by
charging the amount from the net sales of Cinderellas suppliers/consignors. Mr.
Miguel Tecson (AVP-Finance) approves the requests for cash advances, Mr. Arthur
Coronel (AVP-Merchandising) issues the memos instructing the accounting
department to issue the corporate checks and finally, Ms. Theresa Santos (General
Manager) rediscounts them by issuing her personal checks. After some time, one of
Cinderellas suppliers complained about the unauthorized deductions from the net
sales due them. An investigation was conducted and upon initial review of
respondents business records, it appears that petitioner was among those involved in
the irregular and fraudulent preparation and encashment of respondents corporate
checks amounting to at least P500,000.00. Petitioner alleged that Mr. Tecson
demanded her resignation on several occasions. As a result of alleged force and
intimidation from Mr. Tecson, petitioner tendered her resignation letter.
3 years after her resignation, petitioner filed a complaint against Cinderella
alleging that her severance from employment was involuntary amounting to
constructive dismissal. Cinderella denied the charge of constructive dismissal. It
claimed that petitioner voluntarily resigned from office before the internal audit was
completed and before any formal investigation was initiated. She tendered her
resignation on February 7, 2000, then submitted another resignation letter on
February 15, 2000 where she confirmed the first resignation letter.
ISSUE: Whether petitioner was constructively dismissed.

HELD: NO.
Petitioner argues that the employer bears the burden of proof that the
resignation is voluntary and not the product of coercion or intimidation. The Court
agrees that in termination cases, burden of proof rests upon the employer to show
that the dismissal is for a just and valid cause and failure to do so would necessarily
mean that the dismissal was illegal.
From the totality of evidence on record, it was clearly demonstrated that respondent
Cinderella has sufficiently discharged its burden to prove that petitioners resignation
was voluntary. In voluntary resignation, the employee is compelled by personal
reason(s) to disassociate himself from employment. It is done with the intention of
relinquishing an office, accompanied by the act of abandonment. To determine
whether the employee indeed intended to relinquish such employment, the act of the
employee before and after the alleged resignation must be considered.
Petitioner relinquished her position when she submitted the letters of resignation. The
resignation letter submitted on Feb 15, 2000 confirmed the earlier resignation letter
she submitted on Feb 7, 2000. The resignation letter contained words of gratitude
which can hardly come from an employee forced to resign.
The petitioner admitted having submitted the said letter, although, due to an alleged
intimidation. Subsequently, petitioner stopped reporting for work though she met
with the officers of the corporation to settle her accountabilities but never raised the
alleged intimidation employed on her. Also, though the complaint was filed within the
4-year prescriptive period, its belated filing supports the contention of respondent
that it was a mere afterthought. Taken together, these circumstances are substantial
proof that petitioners resignation was voluntary.
Hence, petitioner cannot take refuge in the argument that it is the employer who
bears the burden of proof that the resignation is voluntary and not the product of
coercion or intimidation. Having submitted a resignation letter, it is then incumbent
upon her to prove that the resignation was not voluntary but was actually a case of
constructive dismissal with clear, positive, and convincing evidence. Petitioner failed
to substantiate her claim of constructive dismissal.
Bare allegations of constructive dismissal, when uncorroborated by the evidence on
record, cannot be given credence. In St. Michael Academy v. NLRC , we ruled that
mere allegations of threat or force do not constitute substantial evidence to support a
finding of forced resignation. We enumerated the requisites for intimidation to vitiate
consent as follows:
(1) that the intimidation caused the consent to be given;
(2) that the threatened act be unjust or unlawful;
(3) that the threat be real or serious, there being evident disproportion between
the evil and the resistance which all men can offer, leading to the choice of
doing the act which is forced on the person to do as the lesser evil; and
(4) that it produces a well-grounded fear from the fact that the person from
whom it comes has the necessary means or ability to inflict the threatened
injury to his person or property. x x x
None of the above requisites was established by petitioner. Other than the allegation
that Mr. Tecson intimidated petitioner into resigning, there were no other proofs
presented to support a finding of forced resignation to stand against respondents
denial and proof against dismissal. Neither can the court consider the conduct of
audits and other internal investigations as a form of harassment against petitioner.
Said investigation was legitimate and justified, conducted in view of the discovery of
the anomalous transaction involving the employees of the respondent including
petitioner.
Moreover, the Court notes that petitioner is holding a managerial position with a
salary of P27,000.00 a month. Hence, she is not an ordinary employee with limited
understanding such that she would be easily maneuvered or coerced to resign
against her will.
Abduljuahid Pigcaulan vs Security and Credit Investigation
FACTS: It is not for an employee to prove non-payment of benefits to
which he is entitled by law. Rather, it is on the employer that the burden
of proving payment of these claims rests.
Canoy and Pigcaulan were both employed by SCII as security guards
and were assigned to SCII’s different clients. Subsequently, however,
Canoy and Pigcaulan filed with the Labor Arbiter separate complaints7 for
underpayment of salaries and non-payment of overtime, holiday, rest day,
service incentive leave and 13th month pays. These complaints were
later on consolidated as they involved the same causes of action. Canoy
and Pigcaulan, in support of their claim, submitted their respective daily
time records reflecting the number of hours served and their wages for
the same. They likewise presented itemized lists of their claims for the
corresponding periods served.
Herein respondent maintains that Canoy and Pigcaulan were paid their
just salaries and other benefits under the law; that the salaries they
received were above the statutory minimum wage and the rates provided
by the Philippine Association of Detective and Protective Agency
Operators (PADPAO) for security guards; that their holiday pay were
already included in the computation of their monthly salaries; that they
were paid additional premium of 30% in addition to their basic salary
whenever they were required to work on Sundays and 200% of their
salary for work done on holidays; and, that Canoy and Pigcaulan were
paid the corresponding 13th month pay for the years 1998 and 1999. In
support thereof, copies of payroll listings and lists of employees who
received their 13th month pay, for the said periods.
The Labor Arbiter ruled in favor of petitioner and held that the payroll
listings presented by the respondents did not prove that Canoy and
Pigcaulan were duly paid as same were not signed by the latter or by any
SCII officer. The 13th month payroll was, however, acknowledged as
sufficient proof of payment, for it bears Canoy’s and Pigcaulan’s
signatures. NLRC affirmed; CA however reversed.
ISSUE: WON the Honorable Court of Appeals erred when it dismissed
the complaint allegedly due to absence of legal and factual bases despite
attendance of substantial evidence in the records.
HELD: YES. There was no substantial evidence to support the grant of
overtime pay. The Labor Arbiter relied heavily on the itemized
computations they submitted which he considered as representative daily
time records to substantiate the award of salary differentials. The NLRC
then sustained the award on the ground that there was substantial
evidence of underpayment of salaries and benefits. We find that both the
Labor Arbiter and the NLRC erred in this regard. The handwritten
itemized computations are self-serving, unreliable and unsubstantial
evidence to sustain the grant of salary differentials, particularly overtime
pay. Unsigned and unauthenticated as they are, there is no way of
verifying the truth of the handwritten entries stated therein. Written only in
pieces of paper and solely prepared by Canoy and Pigcaulan, these
representative daily time records, as termed by the Labor Arbiter, can
hardly be considered as competent evidence to be used as basis to
prove that the two were underpaid of their salaries. Hence, in the
absence of any concrete proof that additional service beyond the normal
working hours and days had indeed been rendered, we cannot affirm the
grant of overtime pay to Pigcaulan. However, with respect to the award
for holiday pay, service incentive leave pay and 13th month pay, we affirm
and rule that Pigcaulan is entitled to these benefits [under the Labor
Code, Article 94-95].
SCII failed to show any other concrete proof by means of records,
pertinent files or similar documents reflecting that the specific claims have
been paid. With respect to 13th month pay, SCII presented proof that this
benefit was paid but only for the years 1998 and 1999. To repeat, the
burden of proving payment of these monetary claims rests on SCII, being
the employer.Pigcaulan is hereby declared entitled to holiday pay and
service incentive leave pay for the years 1997-2000 and proportionate
13th month pay for the year 2000.
Aklan Electric Cooperative vs NLRC
FACTS: January 22, 1991 by way of a resolution of the Board of Directors of
AKELCO it allowed the temporary holding of office at Amon Theater, Kalibo,
Aklan upon the recommendation of Atty. Leovigildo Mationg, then project
supervisor, on the ground that the office at Lezo, Aklan was dangerous and
unsafe. Majority of the employees including the herein complainants,
continued to report for work at Lezo, Aklan and were paid of their salaries.
The complainants claimed that transfer of office from Lezo, Aklan to Kalibo,
Aklan was illegal because it failed to comply with the legal requirements
under P.D. 269, thus the they remained and continued to work at the Lezo
Office until they were illegally locked out therefrom by the respondents.
Despite the illegal lock out however, complainants continued to report
daily to the location of the Lezo Office, prepared to continue in the
performance of their regular duties. Complainants who continuously
reported for work at Lezo, Aklan were not paid their salaries from June
1992 up to March 18, 1993.
LA dismissed the complaints. NLRC reversed and set aside the LA’s
decision and RULING that private respondents are entitled to unpaid
wages.
NLRC based its conclusion on the following: (a) the letter of Leyson, Office
Manager of AKELCO addressed to AKELCO’s General Manager, Atty.
Mationg, requesting for the payment of private respondents’ unpaid wages
from June 16, 1992 to March18, 1993; (b) the memorandum of said Atty.
Mationg in answer to the letter request of Leyson where he made an
assurance that he will recommend such request; (c) the private
respondents’ own computation of their unpaid wages.-
Petitioner AKELCO claims that compensable service is best shown by
timecards, payslips and other similar documents and it was an error for
public respondent to consider the computation of the claims for wages and
benefits submitted merely by private respondents as substantial evidence
ISSUE: WON the refusal of private respondents to work under the lawful
orders of AKELCO management are covered by the “no work, no pay”
principle (thus not entitled to the claim for unpaid wages)
RULING: The above bases of the NLRC does not constitute substantial
evidence to support the conclusion that private respondents are entitled to
the payment of wages from June 16, 1992 to March18, 1993. Substantial
evidence is that amount of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion. These evidences relied
upon by public respondent did not establish the fact that private
respondents actually rendered services in the Kalibo office during the
stated period.
It has been established that the petitioner’s business office was transferred
to Kalibo and all its equipments, records and facilities were transferred
thereat and that it conducted its official business in Kalibo during the
period in question. It was incumbent upon private respondents to prove
that they indeed rendered services for petitioner, which they failed to do.
It would neither be fair nor just to allow private respondents to recover
something they have not earned and could not have earned because they
did not render services at the Kalibo office during the stated period.
Lao Construction vs NLRC
Facts: Private respondents were filed complaints for illegal dismissal
against petitioners with NLRC. Respondents were hired for various
periods as construction workers in different capacities they described in
the terms. They alternately worked for Tomas Lao Corp., Tomas and
James Developer, LVM Construction, altogether as Lao Group of
Companies. They engaged in construction of public roads and bridges.
Each one would also allow the utilization of the employees. With the
arrangement workers were transferred whenever necessary to on-going
projects of the same company or rehired after the completion of the
project or project phase which they were assigned. In 1989 issued
memorandum requiring all workers and company personnel to sign
employment contracts forms and clearances. To ensure compliance with
the directive, the company ordered the withholding of the salary of any
employee who refused to sign. All respondents refused to sign
contending that this scheme was designed by their employer to
downgrade their status from their regular employees to mere project
employees. Their salaries were withheld. Since the workers stood firm in
their refusal to comply with the directives their services were terminated.
The NLRC dismissed the complaint finding that respondents were project
employees whose employees could be terminated upon the completion of
the project. However the decision of LA was reversed on appeal finding
that respondents were regular employees who were dismissed without
just cause and denied due process. The petitioners expostulation is that
respondents have no valid cause to complain about their employment
contracts since documents formalized their status as project employees.
They cite Policy Instruction No. 20 of DOLE which defines project
employees as those employed in connection with particular construction
project.
ISSUE: W/N dismissal of private respondents were illegal
RULING: The court ruled that, the principal test in determining whether
particular employees are project employees distinguished from regular
employees is whether the project employees are assigned to carry out
specific project or undertaking, the duration of which are specified at the
time of the employees are engaged for the project. Project in the realm
of industry and business refers to a particular job or undertaking that it is
within the regular or usual business of employer, but which is distinct and
separate and identifiable as such from the undertakings of the company.
They allowed to workers hired for specific projects and hence can be
classified as project employees, the repeated re-hiring and the continuing
need for the services over a long span of time have undeniably made
them regular employees. Length of time may not be a controlling test for
project employment, it can be a strong factor in determining whether the
employee was hired for a specific undertaking or in fact tasked to perform
functions which are vital, necessary and indispensable to the usual
business or trade of the employer. In the case at bar, private respondents
had already gone through the status of project employees. But their
employments became non-coterminous with specific projects when they
started to be continuously re-hired due to demands of petitioners
business and were re-engaged for many more projects without
interruption.
The denial by petitioners of the existence of a work pool in the company
because their projects were not continuous. A work pool may exist
although the workers in the pool do not receive salaries and are free to
seek other employment during temporary breaks in the business,
provided that the worker shall be available when called to report for a
project. The court finds that the continuous re- hiring of of the same set of
employees within the framework is strongly indicative that private
respondents were an integral part of a work pool in which petitioners
drew its workers for its various projects. Also the cessation of
construction activities at the end of every project is a foreseeable
suspension of work. Of course, no compensation can be demanded from
the employer because the stoppage of operations at the end of a project
and before the start of a new one is regular and expected by both parties
to the labor relations. Similar to the case of regular seasonal employees,
the employment relation is not severed by merely being suspended. The
employees are, strictly speaking, not separated from services but merely
on leave of absence without pay until they are reemployed. Thus we
cannot affirm the argument that non-payment of salary or non-inclusion in
the payroll and the opportunity to seek other employment denote project
employment. If the private respondents were indeed employed as project
employees, petitioners should have submitted a report of termination to
the nearest public employment office every time their employment was
terminated due to completion of each construction project. The records
show that they did not. Policy Instruction No. 20 is explicit that employers
of project employees are exempted from the clearance requirement but
not from the submission of termination report. We have consistently held
that failure of the employer to file termination reports after every project
completion proves that the employees are not project
employees. Nowhere in the New Labor Code is it provided that the
reportorial requirement is dispensed with. The fact is that Department
Order No. 19 superseding Policy Instruction No. 20 expressly provides
that the report of termination is one of the indicators of project
employment.
The execution of the project employment contracts were obviously a
scheme of petitioners to prevent respondents from being considered as
regular employees. It imposed time frames into an otherwise flexible
employment period of private respondents some of whom were employed
as far back as 1969. Clearly, here was an attempt to circumvent labor
laws on tenurial security. Settled is the rule that when periods have been
imposed to preclude the acquisition of tenurial security by the employee,
they should be struck down as contrary to public morals, good customs or
public order. Worth noting is that petitioners had engaged in various joint
venture agreements in the past without having to draft project
employment contracts. That they would require execution of employment
contracts and waivers at this point, ostensibly to be used for audit
purposes, is a suspect excuse, considering that petitioners enforced the
directive by withholding the salary of any employee who spurned the
order.
IMBUIDO vs NLRC
FACTS: Vivian Y. Imbuido was employed as data encoder by
International Information Services, a domestic corporation engaged in the
business of data encoding and keypunching, from August 26, 1998 to
October 18, 1991. In the duration of her employment, Vivian entered into
13 separate employment contracts with the respondent, each contract
lasting only for a period of 3 months.
In September 1991, petitioner and 12 other employees allegedly agreed
to the filing of a petition for certification election involving the rank-and-file
employees of the respondent with the Bureau of Labor Relations.
October 18, 1991, Vivian received a termination letter from EDNA
CASILAG, Administrative Officer, due to low volume of work. In May 25,
1992, a complaint for Illegal Dismissal with prayer of SIL and 13 th month
differential pay with the NLRC, NCR Arbitration Branch. The Labor arbiter
ordered the reinstatement of Vivian, without loss of seniority rights and
privileges, and the payment of back wages and SIL. NLRC reversed the
LA decision stating that although petitioner is a regular employee, she
has no tenure of security beyond the period for which she was hired or
only up to the time the specific project for which she hired was
completed. MR denied
ISSUE: W/N petitioner is a regular employee entitled to tenurial security
and was therefore unjustly dismissed.
HELD: Yes. Even though petitioner is a project employee, as in the case
of Maraguinot, Jr. v. NLRC, the court held that a project employee or
member of a work pool may acquire the status of a regular employee
when the following concur:
1. there is continuous rehiring of project employees even after
the cessation of a project,
2. the tasks performed by the alleged “project employee” are vital,
necessary and indispensable to the usual business and trade of
the employer.
The evidence on record reveals that petitioner was employed by private
respondent as a data encoder, performing activities which are usually
necessary or desirable in the usual business or trade of her employer,
continuously for a period of more than three (3) years, from August 26,
1988 to October 18, 1991 and contracted for a total of thirteen (13)
successive projects. We have previously ruled that "however, the length
of time during which the employee was continuously re-hired is not
controlling, but merely serves as a badge of regular employment." Based
on the foregoing, we conclude that petitioner has attained the status of a
regular employee of private respondent.
Project or work pool employees who have gained the status of regular
employees are subject to the "no work-no pay" principle. A work pool may
exist although the workers in the pool do not receive salaries and are free
to seek other employment during temporary breaks in the business,
provided that the worker shall be available when called to report for a
project. Although primarily applicable to regular seasonal workers, this
set-up can likewise be applied to project workers insofar as the effect of
temporary cessation of work is concerned. This is beneficial to both the
employer and employee for it prevents the unjust situation of "coddling
labor at the expense of capital" and at the same time enables the workers
to attain the status of regular employees.

Once a project or work pool employee has been: (1) continuously, as

opposed to intermittently, re-hired by the same employer for the same
tasks or nature of tasks; and (2) these tasks are vital, necessary, and
indispensable to the usual business or trade of the employer, then the
employee must be deemed a regular employee, pursuant to Article 280 of
the Labor Code and jurisprudence. To rule otherwise would allow
circumvention of labor laws in industries not falling within the ambit of
Policy Instruction No. Policy Department Order No. 19, hence allowing
the prevention of acquisition of tenurial security by project or work pool
employees who have already gained the status of regular employees by
the employer's conduct.

Being a regular employee, petitioner is entitled to security of tenure and

could only be dismissed for a just or authorized cause, as provided in
Article 279 of the Labor Code, as amended. The alleged causes of
petitioner's dismissal (low volume of work and belatedly, completion of
project) are not valid causes for dismissal under Articles 282 and 283 of
the Labor Code. Thus, petitioner is entitled to reinstatement without loss
of seniority rights and other privileges, and to her full backwages,
inclusive of allowances, and to her other benefits or their monetary
equivalent computed from the time her compensation was withheld from
her up to the time of her actual reinstatement. However, complying with
the principles of "suspension of work" and "no work, no pay" between the
end of one project and the start of a new one, in computing petitioner's
backwages, the amounts corresponding to what could have been earned
during the periods from the date petitioner was dismissed until her
reinstatement when private respondent was not undertaking any project,
should be deducted.