LABOR LAW REVIEW COURSE OUTLINE (2019)

I. Fundamental Principles and

Policies

A. Constitutional and Statutory basis

1.1987 Constitution
a. Article II, Secs. 9, 10, 11, 13, 14, 18, 20.
b. Article III, Secs. 1, 4, 7, 8, 10, 16, 18(2).
c. Article XII, Secs. 1, 6, 12.
d. Article XIII, Secs. 1, 2, 3, 13, 14.
e. Cases:
a) Tirazona vs. Phil Eds Techno Service, GR No. 169712, 20 Jan.
2009

Tirazona, being the Administrative Manager of Philippine

EDS Techno-Service, Inc. (PET), was a managerial employee who
held a position of trust and confidence; that after PET
officers/directors called her attention to her improper handling of
a situation involving a rank-and-file employee, she claimed that
she was denied due process for which she
demanded P2,000,000.00 indemnity from PET and its
officers/directors; that she admitted to reading a confidential
letter addressed to PET officers/directors containing the legal
opinion of the counsel of PET regarding her case; and that she was
validly terminated from her employment on the ground that she
willfully breached the trust and confidence reposed in her by her
employer.

On 29 April 2008, Tirazona moved for reconsideration[7] of

our afore-mentioned Decision. She argued therein that the Court
failed to consider the length of her service to PET in affirming her
termination from employment. She prayed that her dismissal be
declared illegal. Alternatively, should the Court uphold the legality
of her dismissal, Tirazona pleaded that she be awarded separation
pay and retirement benefits, out of humanitarian considerations.

Xxx
 The Court thereafter required PET to comment on the above motion. On 19
November 2008, PET filed its Comment/Opposition,[9] to which Tirazona filed her
Reply[10] on 8 December 2008.

After thoroughly scrutinizing the averments of the present Motion, the

Court unhesitatingly declares the same to be completely unmeritorious.

Section 2, Rule 52 of the Rules of Court explicitly decrees that no second

motion for reconsideration of a judgment or final resolution by the same party shall
be entertained. Accordingly, a second motion for reconsideration is a prohibited
pleading, which shall not be allowed, except for extraordinarily persuasive reasons
and only after an express leave shall have first been obtained.[11] In this case, we
fail to find any such extraordinarily persuasive reason to allow Tirazonas Second
Motion for Reconsideration.

As a general rule, an employee who has been dismissed for any of the just
causes enumerated under Article 282[12] of the Labor Code is not entitled to
separation pay.[13] In Sy v. Metropolitan Bank & Trust Company,[14] we declared
that only unjustly dismissed employees are entitled to retirement benefits and
other privileges including reinstatement and backwages.

Although by way of exception, the grant of separation pay or some other

financial assistance may be allowed to an employee dismissed for just causes on
the basis of equity,[15] in Philippine Long Distance Telephone Company v. National
Labor Relations Commission,[16] we set the limits for such a grant and gave the
following ratio for the same:

[S]eparation pay shall be allowed as a measure of social justice only in those

instances where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character. x x x.

xxxx
Contrary to her exaggerated claims, Tirazona was not just gracelessly
expelled or simply terminated from the company on 22 April 2002. She was
found to have violated the trust and confidence reposed in her by her
employer when she arrogantly and unreasonably demanded from PET and its
officers/directors the exorbitant amount of P2,000,000.00 in damages, coupled
with a threat of a lawsuit if the same was not promptly paid within five
days. This unwarranted imposition on PET and its officers/directors was
made after the company sent Tirazona a letter, finding her handling of the
situation involving a rank-and-file employee to be less than ideal, and merely
reminding her to be more circumspect when dealing with the more delicate
concerns of their employees. To aggravate the situation, Tirazona adamantly
and continually refused to cooperate with PETs investigation of her case and
to provide an adequate explanation for her actions.

Verily, the actions of Tirazona reflected an obdurate character that is

arrogant, uncompromising, and hostile. By immediately and unreasonably adopting
an adverse stance against PET, she sought to impose her will on the company and
placed her own interests above those of her employer. Her motive for her actions
was rendered even more questionable by her exorbitant and arbitrary demand
for P2,000,000.00 payable within five days from demand. Her attitude towards her
employer was clearly inconsistent with her position of trust and confidence. Her
poor character became even more evident when she read what was supposed to be
a confidential letter of the legal counsel of PET to PET officers/directors
expressing his legal opinion on Tirazonas administrative case. PET was, therefore,
fully justified in terminating Tirazonas employment for loss of trust and
confidence.
b) Best Wear Garments vs. de lemos, GR No. 191281, 5 Dec. 2012

Petitioner Best Wear Garments is a sole proprietorship represented by its General Manager Alex
Sitosta. Respondents Cecile M. Ocubillo and Adelaida B. De Lemos were hired as sewers on piece-
rate basis by petitioners on October 27, 1993 andJuly 12, 1994, respectively.

On May 20, 2004, De Lemos filed a complaint5 for illegal dismissal with prayer for backwages and
other accrued benefits, separation pay, service incentive leave pay and attorney’s fees. A similar
complaint6 was filed by Ocubillo on June 10, 2004. Both alleged in their position paper that in August
2003, Sitosta arbitrarily transferred them to other areas of operation of petitioner’s garments
company, which they said amounted to constructive dismissal as it resulted in less earnings for
them.

Petitioners denied having terminated the employment of respondents who supposedly committed
numerous absences without leave (AWOL). They claimed that sometime in February 2004, De
Lemos informed Sitosta that due to personal problem, she intends to resign from the company. She
then demanded the payment of separation pay. In March 2004, Ocubillo likewise intimated her
intention to resign and demanded separation pay. Sitosta explained to both De Lemos and Ocubillo
that the company had no existing policy on granting separation pay, and hence he could not act on
their request. De Lemos never reported back to work since March 2004, while Ocubillo failed to
report for work from October 2004 to the present.

As to the allegation of respondents that the reason for their transfer was their refusal to
render overtime work until 7:00 p.m., petitioners asserted that respondents are piece-rate
workers and hence they are not paid according to the number of hours worked.

On September 5, 2005, Labor Arbiter Arden S. Anni rendered a Decision granting respondents’
claims, as follows:

WHEREFORE, ALL THE FOREGOING CONSIDERED, judgment is rendered, as follows:

1. Declaring that complainants were constructively, nay, illegally dismissed from

employment;

Labor Arbiter Anni ruled that since respondents neither resigned nor abandoned their jobs, the
ambiguities in the circumstances surrounding their dismissal are resolved in favor of the workers. It
was emphasized that respondents could no longer be deemed terminated for reason of AWOL
because this prerogative should have been exercised before the dismissals have been effected.
Moreover, it would have been illogical for respondents to resign and then file a complaint for illegal
dismissal.

Petitioners appealed to the NLRC which reversed the Labor Arbiter’s decision and dismissed
respondents’ complaints. The NLRC found no basis for the charge of constructive dismissal

Xxx

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.16

With the foregoing as guidepost, we hold that the CA erred in reversing the NLRC’s ruling that
respondents were not constructively dismissed.

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 implythat any
resultingreduction in payis 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.

The records are bereft of any showing of clear discrimination, insensibility or disdain on
the part of petitioners in transferring respondents to perform a different type of sewing
job.It is unfair to charge petitioners with constructive dismissal simply because the
respondents insist that their transfer to a new work assignment was against their will. We
have long stated that "the objection to the transfer being grounded on solely upon the
personal inconvenience or hardship that will be caused to the employee by reason of the
transfer is not a valid reason to disobey an order of transfer."19 That respondents eventually
discontinued reporting for work after their plea to be returned to their former work
assignment was their personal decision, for which the petitioners should not be held liable
particularly as the latter did not, in fact, dismiss them.

c) Jamer vs. NLRC, 278 SCRA 632

Complainant, Corazon Jamer was employed on February 10, 1976 as a Cashier at Joy
Mart, a sister company of Isetann. After two (2) years, she was later on promoted to
the position of counter supervisor. She was transferred to Isetann, Carriedo Branch, as
a money changer. In 1982 she was transferred to the Cubao Branch of Isetann, as a
money changer, till her dismissal on August 31, 1990.

Complainant Cristina Amortizado, on the other hand, was employed also at Joy Mart
in May, 1977 as a sales clerk. In 1980 she was promoted to the position as counter
cashier. Thereafter, she was transferred to Young Un Department Store as an assistant
to the money changer. Later on, or in 1985, she transferred to Isetann, Cubao Branch
where she worked as a Store Cashier till her dismissal on August 31, 1990.

Both complainants were receiving a salary of P4,182.00 for eight (8) hours work at
the time of their dismissal.

Respondent Isetann Department Store on the other hand, is a corporation duly

organized and existing under laws of the Philippines and is engaged in retail trade and
the department store business. Individual respondent, John Go is the
President/General (Manager) of respondent Department Store.

This complaint arose from the dismissal of the complainants by the respondents. They
were both dismissed on August 31, 1990 on the alleged ground of dishonesty in their
work as Store Cashiers.

In justifying complainants dismissal from their employment, respondents alleged:

When the transactions for July 15, 1990 were being reconciled, a shortage
of P15,353.78 was discovered. Also uncovered was an under-deposit of P450.00 of
cash receipts for July 14, 1990.

Considering that the foregoing deficits were attributable to herein appellees and to
another store cashier, Mrs. Lutgarda Inducta, who were the ones on duty those days
respondent Isetanns Human Resources Division Manager, Teresita A. Villanueva,
issued letters (Exh. 1 and 5) individually addressed to herein appellees and Mrs.
Inducta requiring them to submit written explanations in regard to their above
malfeasance within 48 hours from receipt thereof. Pursuant to said letters, they were
likewise placed under preventive suspension.

Petitioners admitted this in their affidavits. The labor arbiter ruled them having been
illegally dismissed. The NLRC reversed the ruling.

Xxx

From the foregoing premises, it is crystal clear that the failure of

petitioners to report the aforequoted shortages and overages to management
as soon as they arose resulted in the breach of the fiduciary trust reposed in
them by respondent company, thereby causing the latter to lose confidence in
them. This warrants their dismissal. Moreover, it must be pointed out that
herein petitioners have in fact admitted the underpayment of P450.00 not only
in their Sinumpaang Salaysay but also during the hearing conducted before
Labor Arbiter Pablo C. Espiritu. And, the record shows that the petitioners in
[25]

fact made a last ditch effort to conceal the same. Were it not for its timely
discovery by private respondents trusted employees, the incident could not
have been discovered at all. Furthermore, it is worth stressing at this juncture
that the petitioners have also expressly admitted the shortage of P15,353.78a
substantial amountin their respective sworn statements, and they were not
able to satisfactorily explain such shortage. The Court is convinced that
[26]

these particular acts or omissions provided Isetann with enough basis to

forfeit its trust and confidence over herein petitioners.
The NLRC, therefore, did not act with grave abuse of discretion in
declaring that petitioners were legally dismissed from employment. The failure
of petitioners to report to management the aforementioned irregularities
constitute fraud or willful breach of the trust reposed in them by their employer
or duly authorized representative one of the just causes in terminating
employment as provided for by paragraph (c), Article 282 of the Labor Code,
as amended.
 In other words, petitioners admissions in their sworn statements, together
with the other documentary evidences on record, constituted breach of trust
on their part which justifies their dismissal. Private respondents Isetann
Department Store and Mr. John Go cannot be compelled to retain employees
who are clearly guilty of malfeasance as their continued employment will be
prejudicial to the formers best interest. The law, I protecting the rights of the
[27]

employees, authorizes neither oppression nor self-destruction of the

employer. [28]

d) Gandara vs. NLRC, 300 SCRA 702 (1998)

FACTS: Private respondent Silvestre Germane did not report for work because his wife
delivered their first child. He did not however notify his employer, causing a disruption in
the business of the latter. When the respondent returned to work he was surprised upon
knowing that someone has been hired to take his place.

ISSUE: Was there a case of illegal dismissal?

After a careful study, and a thorough examination of the pleadings and supporting
documents, 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. Applying the WenPhil Doctrine by
analogy, where dismissal was not preceded by the twin requirement of notice and hearing, the
legality of the dismissal in question, is under heavy clouds and therefore illegal. While it cannot
be deduced unerringly from the records on hand that private respondent was really dismissed,
there is no clear indication that the latter was to be reinstated. In fact, since the inception of the
case, what petitioner merely endeavored was to compromise for a measly sum of P5,000.00, and
no mention of taking respondent back to his job was ever offered as part of the deal to end the
controversy. What can be surmised from petitionerss offer to re-admit the private respondent,
was nothing but a polite gesture couched in words intended to make the impact of his so-called
suspension less severe.Invoking the plight of a working man, where no work, no pay is the rule
of thumb, the court cannot sanction an over extended suspension. 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.[5]

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. Therefore, the Labor
Arbiters contention is upheld by the Court.
 Granting arguendo that private respondents absence engendered undue difficulty to the
smooth operations of petitioners business, considering the predicament of respondent Silvestre
Germano, his dismissal is unwarranted. In holding the constitutional mandate of protection to
labor, the rigid rules of procedure may sometimes be dispensed with to give room for
compassion. The doctrine of compassionate justice is applicable under the premises, private
respondent being the breadwinner of his family. The Social Justice policy mandates a
compassionate attitude toward the working class in its relation to management. In calling for the
protection to labor, the Constitution does not condone wrongdoing by the employee, it
nevertheless urges a moderation of the sanctions that may be applied to him in the light of the
many disadvantages that weigh heavily on him like an albatross on his neck.[6]

2. Civil Code
1. Article 19
2. Article 1700
3. Article 1702

3. Labor Code

Books I, II, III, IV, V, VI and VII and the implementing Rules
Department Orders issued by the DOLE Secretary

B. Concept of Shared Responsibility

1. Philippine Airlines vs NLRC 225 SCRA 301 (1993)

On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of
Discipline. The Code was circulated among the employees and was immediately implemented, and
some employees were forthwith subjected to the disciplinary measures embodied therein.

Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint
before the National Labor Relations Commission (NLRC) for unfair labor practice (Case No. NCR-7-
2051-85) with the following remarks: "ULP with arbitrary implementation of PAL's Code of Discipline
without notice and prior discussion with Union by Management" (Rollo, p. 41). In its position paper,
PALEA contended that PAL, by its unilateral implementation of the Code, was guilty of unfair labor
practice, specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code. PALEA
alleged that copies of the Code had been circulated in limited numbers; that being penal in nature
the Code must conform with the requirements of sufficient publication, and that the Code was
arbitrary, oppressive, and prejudicial to the rights of the employees.

PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe
rules and regulations regarding employess' conduct in carrying out their duties and functions.

Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed
to appear at the scheduled date. Interpreting such failure as a waiver of the parties' right to present
evidence, the labor arbiter considered the case submitted for decision. On November 7, 1986, a
decision was rendered finding no bad faith on the part of PAL in adopting the Code and ruling that
no unfair labor practice had been committed. However, the arbiter held that PAL was "not totally fault
free" considering that while the issuance of rules and regulations governing the conduct of
employees is a "legitimate management prerogative" such rules and regulations must meet the test
of "reasonableness, propriety and fairness."

As stated above, the Principal issue submitted for resolution in the instant petition is whether
management may be compelled to share with the union or its employees its prerogative of
formulating a code of discipline.

PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27,
1990, PALEA in effect, recognized PAL's "exclusive right to make and enforce company rules and
regulations to carry out the functions of management without having to discuss the same with
PALEA and much less, obtain the latter's conformity thereto" (pp. 11-12, Petitioner's Memorandum;
pp 180-181, Rollo.) Petitioner's view is based on the following provision of the agreement:

The Association recognizes the right of the Company to determine matters of

management it policy and Company operations and to direct its manpower.
Management of the Company includes the right to organize, plan, direct and control
operations, to hire, assign employees to work, transfer employees from one
department, to another, to promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and legal causes, to
introduce new or improved methods or facilities or to change existing methods or
facilities and the right to make and enforce Company rules and regulations to carry
out the functions of management.

The exercise by management of its prerogative shall be done in a just reasonable,

humane and/or lawful manner.

Such provision in the collective bargaining agreement may not be interpreted as cession of
employees' rights to participate in the deliberation of matters which may affect their rights and the
formulation of policies relative thereto. And one such mater is the formulation of a code of discipline.

Indeed, industrial peace cannot be achieved if the employees are denied their just
participation in the discussion of matters affecting their rights. Thus, even before Article 211 of
the labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy
of the State, "(d) To promote the enlightenment of workers concerning their rights and obligations . . .
as employees." This was, of course, amplified by Republic Act No 6715 when it decreed the
"participation of workers in decision and policy making processes affecting their rights, duties and
welfare." PAL's position that it cannot be saddled with the "obligation" of sharing management
prerogatives as during the formulation of the Code, Republic Act No. 6715 had not yet been enacted
(Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While such "obligation"
was not yet founded in law when the Code was formulated, the attainment of a harmonious labor-
management relationship and the then already existing state policy of enlightening workers
concerning their rights as employees demand no less than the observance of transparency in
managerial moves affecting employees' rights.

C. Preference for Labor ; Liberal interpretation

1. Fuentes vs. NLRC, 266 SCRA 24, (1997)
 Petitioners, numbering seventy-five (75) in all, seek to set aside the
decision of respondent National Labor Relations Commission dated 27
November 1992 reversing that of the Labor Arbiter which granted their claims,
for having been rendered with grave abuse of discretion amounting to lack or
excess of jurisdiction.
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. In their answer respondents denied the allegations
of petitioners and contended that upon receipt of instructions from the head
office in Singapore to implement retrenchment, private respondents
conducted grievance conferences or meetings with petitioners' representative
labor organization, the Association of Trade Unions through its national
president Jorge Alegarbes, its local president and its board of directors.
Private respondents also contended that the 30-day notices of termination
were duly sent to petitioners.

We sustain petitioners. The ruling of the Labor Arbiter that there was no
valid retrenchment is correct. Article 283 of the Labor Code clearly states:

Art 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of the title, by serving a written notice on the workers
and the Ministry of Labor and Employment at least one (1) month before the intended
date thereof. In case of termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay
equivalent to at least his one (1) month pay or to at least one (1) month pay for every
year of service, whichever is higher. In case of retrenchment to prevent losses and in
case of closure or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to
one (1) month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one (1)
whole year.

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. [2]

In the case before us, private respondents merely alleged in their answer
and position paper that after their officials from the head office had visited the
plantation respondent manager Chang Chee Kong received a letter from the
head office directing him to proceed immediately with the termination of
redundant workers and staff, and change the operations to contract system
against direct employment. They also alleged that after five (5) years of
operations, the return of investments of respondent company was meager;
that the coup attempt in August 1987 as well as that of December 1989
aggravated the floundering financial state of respondent company; that the
financial losses due to lack of capital funding resulted in the non-payment of
long-overdue accounts; that the untimely cut in the supply of fertilizers and
manuring materials and equipment parts delayed the payment of salaries and
the implementation of weekly job rotations by the workers. Except for these
allegations, private respondents did not present any other documentary proof
of their alleged losses which could have been easily proven in the financial
statements which unfortunately were not shown.
There is no question that an employer may reduce its work force to
prevent losses. However, these losses must be serious, actual and
real. Otherwise, this ground for termination of employment would be
[3]

susceptible to abuse by scheming employers who might be merely feigning

losses in their business ventures in order to ease out employees. [4]

Indeed, private respondents failed to prove their claim of business

losses. What they submitted to the Labor Arbiter were mere self-serving
documents and allegations. Private respondents never adduced evidence
which would show clearly the extent of losses they suffered as a result of lack
of capital funding, which failure is fatal to their cause.

2. PLDT vs NLRC 276 SCRA 1 (1997)

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.
Sometime in December 1987, PLDTs rank-and-file employees and
telephone operators went on strike, prompting the supervisors of the MITD to
discharge the formers duties to prevent a total shutdown of its business
operations.
Premised on the above findings, 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.
In a complaint for illegal dismissal filed by respondent against petitioner,
Labor Arbiter Jose G. De Vera rendered a decision, the dispositive portion of
which reads thus:
WHEREFORE, all the foregoing premises being considered, judgment is
hereby rendered ordering the respondent company to reinstate the complainant
to her former position with all the rights, benefits and privileges thereto
appertaining including seniority plus backwages which as ofFebruary 28, 1991
already amounted to P103,381.50 (P5,043.00 mo. x. 20.5 mos.). Further, the
respondent company is ordered to pay complainant attorneys fees equivalent
to ten percent (10%) of such backwages that the latter may recover in this suit.
SO ORDERED.

Xxx
 The instant petition must be dismissed. Petitioner failed to adduce any
substantial argument that would warrant a reversal of the questioned decision.

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.
Xxx
This Court will not sanction a dismissal premised on mere conjectures and
suspicions. To be a valid ground for respondents dismissal, the evidence must
be substantial and not arbitrary and must be founded on clearly established
facts sufficient to warrant his separation from work.
[7]

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. The essence of due process in
[8]

administrative proceedings is the opportunity to explain ones side or a

chance to seek reconsideration of the action or ruling complained of. The
[9]

twin requirements of notice and hearing constitute the essential elements

of due process. This simply means that the employer shall afford the
worker ample opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires. Ample opportunity
connotes every kind of assistance that management must accord the
employee to enable him to prepare adequately for his defense including
legal representation. In the instant case, the petitioner failed to
[10]

convincingly establish valid bases on the alleged serious misconduct and

loss of trust and confidence.
 D. Application of technical rules: Burden of Proof

1. Technical rules not binding

i) MERALCO v. Jan Carlo Gala; GRs 191288 & 191304 (2012)

On March 2, 2006, respondent Jan Carlo Gala commenced employment with the
petitioner Meralco Electric Company (Meralco) as a probationary lineman. He
was assigned at Meralcos Valenzuela Sector. He initially served as member of the
crew of Meralcos Truck No. 1823 supervised by Foreman Narciso Matis. After one
month, he joined the crew of Truck No. 1837 under the supervision of Foreman
Raymundo Zuiga, Sr.

On July 27, 2006, barely four months on the job, Gala was dismissed for alleged
complicity in pilferages of Meralcos electrical supplies, particularly, for the
incident which took place on May 25, 2006.

Unknown to Gala and the rest of the crew, a Meralco surveillance task force was
monitoring their activities and recording everything with a Sony video camera.
The task force was composed of Joseph Aguilar, Ariel Dola and Frederick Riano.

Xxx
The petition is anchored on the ground that the CA seriously erred and gravely
abused its discretion in -

1. ruling that Gala was illegally dismissed; and

2. directing Galas reinstatement despite his probationary status.

Meralco faults the CA for not giving credit to its witnesses Aguilar, Dola and
Riano, and instead treated their joint affidavit (Samasamang Sinumpaang
Salaysay) as inconclusive to establish Galas participation
in the pilferage of company property on May 25, 2006. It submits that the
affidavit of the three Meralco employees disproves the CAs findings, considering
that their statements were based on their first-hand account of the incident
during their day-long surveillance on May 25, 2006. It points
out that the three Meralco employees categorically stated that all of the
companys foremen and linemen present at that time, including Gala,
had knowledge of the pilferage that was happening at the time. According to
Aguilar, Dola and Riano, the trucks crew, including Gala, was familiar with Llanes
who acted as if his presence particularly, that of freely collecting materials and
supplies was a regular occurrence during their operations.

e find merit in the petition.

Contrary to the conclusions of the CA and the NLRC, there is substantial

evidence supporting Meralcos position that Gala had become unfit to continue his
employment with the company. Gala was found, after an administrative
investigation, to have failed to meet the standards expected of him to become a
regular employee and this failure was mainly due to his undeniable knowledge, if
not participation, in the pilferage activities done by their group, all to the
prejudice of the Companys interests.[21]

Gala insists that he cannot be sanctioned for the theft of company property
on May 25, 2006. He maintains that he had no direct participation in the incident
and that he was not aware that an illegal activity was going on as he was at some
distance from the trucks when the alleged theft was being committed. He adds
that he did not call the attention of the foremen because he was a mere lineman
and he was focused on what he was doing at the time. He argues that in any
event, his mere presence in the area was not enough to make him a conspirator
in the commission of the pilferage.
 Gala misses the point. He forgets that as a probationary employee, his overall
job performance and his behavior were being monitored and measured in
accordance with the standards (i.e., the terms and conditions) laid down in his
probationary employment agreement.[22] Under paragraph 8 of the agreement, he
was subject to strict compliance with, and non-violation of the Company Code on
Employee Discipline, Safety Code, rules and regulations and existing policies. Par.
10 required him to observe at all times the highest degree of transparency,
selflessness and integrity in the performance of his duties and responsibilities,
free from any form of conflict or contradicting with his own personal interest.

The evidence on record established Galas presence in the worksite where the
pilferage of company property happened. It also established that it was not only
on May 25, 2006 that Llanes, the pilferer, had been seen during a Meralco
operation. He had been previously noticed by Meralco employees, including Gala
(based on his admission),[23] in past operations. If Gala had seen Llanes in earlier
projects or operations of the company, it is incredulous for him to say that he did
not know why Llanes was there or what Zuiga and Llanes were talking about. To
our mind, the Meralco crew (the foremen and the linemen) allowed or could have
even asked Llanes to be there during their operations for one and only purpose to
serve as their conduit for pilfered company supplies to be sold to ready buyers
outside Meralco worksites.

The familiarity of the Meralco crew with Llanes, a non-Meralco employee who
had been present in Meralco field operations, does not contradict at all but rather
support the Meralco submission that there had been reported pilferage or
rampant theft, by the crew, of company property even before May 25, 2006. Gala
downplays this particular point with the argument that the labor arbiter made no
such finding as she merely assumed it to be a fact,[24] her only basis being the
statement that may natanggap na balita na ang mga crew na ito ay palagiang
hindi nagsasauli ng mga electric facilities na kanilang ginagamit o pinapalitan
bagkus ito ay ibinenta palabas.[25] Gala impugns the statement as hearsay. He also
wonders why Meralcos supposed video footage of the incident on May 25,
2006 was never presented in evidence.

The established fact that Llanes, a non-Meralco employee, was often seen during
company operations, conversing with the foremen, for reason or reasons
connected with the ongoing company operations, gives rise to the question: what
was he doing there? Apparently, he had been visiting Meralco worksites, at least
in the Valenzuela Sector, not simply to socialize, but to do something else. As
testified to by witnesses, he was picking up unused supplies and materials that
were not returned to the company. From these factual premises, it is not hard to
conclude that this activity was for the mutual pecuniary benefit of himself and the
crew who tolerated the practice. For one working at the scene who had seen or
who had shown familiarity with Llanes (a non-Meralco employee), not to have
known the reason for his presence is to disregard the obvious, or at least the very
suspicious.

For ignoring the evidence in this case, the NLRC committed grave abuse of
discretion and, in sustaining the NLRC, the CA committed a reversible error.
2. Doubts
i) in employment contract interepretation
* Price vs Innodata Phil - GR No. 178505 Sept 30, 2008

FACTS:

 The Petitioners prayed for a review of the decision promulgated by the Court of Appeals on June
15, 2007 which affirmed the decision of the NLRC on December 14, 2001 in favour of the
Respondent, which reversed the decision of the Labor Arbiter on October 17, 2000.
 The Respondent is a domestic corporation engaged in data encoding and data conversion,
therefore employing encoders, indexers, formatters, programmers, quality/quantity staff, and
others to perform its operations and assignments from clients.
 The Petitioners and Respondent engaged in an employment contract for a fixed duration of one
year, beginning on February 16, 1999 until February 16, 2000. The Petitioners were hired as
Formatters.
  The aforesaid Employment Contract indicated the following terms for termination:
o If Innodata shall cease operations, the contract shall also be terminated on the last day
of that month
o If Innodata shall no longer need the services of the Petitioners and will thus pre-
terminate the contract (a) once the project has been completed, (b) during business
losses, (c) introduction of new production processes and techniques
o Innodata or the Petitioners may pre-terminate the contract with or without cause, with
due notice of 15 days
o Innodata or the Petitioners may pre-terminate the contract by reason of breach or
violation of the terms and conditions of the contract through 15 days written notice,
without need of judicial action or approval
 Respondent through its HRAD Manager sent notice to Petitioners re their last day of work on
February 16, 2000, the end data stipulated in the contract
 Petitioners filed a complaint for illegal dismissal and damages against respondents on May 22,
2000 for the reason that they should be considered as regular employees given that (1) their
positions as formatters were necessary and desirable to the usual business of Innodata and (2)
they are not project employees as there was no specific indication of the project upon which
their contract duration was co-terminous with
 Respondents explained that (1) they were compelled to engage additional employees for fixed
durations to accommodate the wide range of services requested by their clients (2) the contract
was for a fixed term only, from September 6, 1999 to February 16, 2000 (3) the Petitioners
knowingly, voluntarily, and wilfully entered into the contract
 Respondents have ceased operations in June 2002
 The Labor Arbiter ruled in favour of the Petitioners, which was reversed by the NLRC and the
Court of Appeals upon finding merit in the execution of the contract which indicates the
duration of the employment over the nature of the services rendered.

ISSUE:

1.) Were the Petitioners regular employees of Innodata?

2.) Were the Petitioners illegally dismissed, therefore, subject to reinstatement and payment of
backwages?

HELD:

Yes.

 While the Court renders fixed-term contracts as valid, these should not be construed as a means
for employers to circumvent the law on security of tenure.
 o The employment status of a person is provided for by the law and not by what the
Parties declare it to be, and as such, they should not absolve themselves from the
coverage of the law. Applicable references are Art. 280 and Art. 270 of the Labor Code.
o Undoubtedly, the Petitioners are regular employees by the nature of the work they
render, such that they are desirable and necessary in the usual operation of business of
Innodata.
o Fixed-term employment is valid only for certain cases, such that these are essential and
natural undertakings, such as in (a) overseas employment (b) positions in educational
institutions where these are undertaken in rotation among faculty members like deans
and principals (c) elective positions in companies of which durations are fixed
 The Employment Contract is highly suspicious as the document was clearly tampered with: the
beginning data, supposedly indicated to be on February 16, 1999, was crossed out to indicate
September 6, 2000. This was due to the completion of the project before the end of the one
year term, and as such, the Petitioners were re-hired in September. This would mean that they
engaged the Petitioners for a period of less than a year, which is an attempt to circumvent
security of tenure.
 Petitioners could not be considered as Project Employees, defined as (1) engaged for a specific
project or undertaking (2) completion or termination of the project has been predetermined at
the time of engagement of the employee. The contract did not indicate a specific project upon
which the Petitioners shall render services accordingly, and in fact the Petitioners have rendered
services for a number of clients of Innodata.
 The contract has barred the Petitioners from claiming illegal dismissal upon termination of the
contract as it has indicated that they can be pre-terminated with or without cause provided they
be given 15 days notice.
 Since reinstatement is no longer possible, the Respondents shall pay backwages from the start
of illegal termination until its closure plus attorney’s fees.

 The Labor Arbiter decided in favour of the Petitioners

** Marcopper Mining vs NLRC 255 SCRA 322 (1996)

FACTS

Marcopper Mining Corporation and NAMAWU-MIF (a labor federation registered under NLRC)
entered into a Collective Bargaining Agreement (CBA) effecting from May 1, 1984 until April 30, 1987. It
was agreed under Section 1 Article 5 that Petitioner will grant a general wage increase to its employees
in the following manner: 5% Increase per day on the Basic Wage effective May 1, 1985 and an 5%
increase again on May 1, 1986. It was expressed that the wage shall be exclusive of any increase in the
minimum wage and/or mandatory living allowance that may be promulgated during the life of the CBA.

On July 25, 1986, petitioner and private respondent modified the CBA through Memorandum of
agreement, which states that the petitioner grants a 10% wage increase of the basic rate to employees
effective May 1, 1986 and a 5% increase in effective May 1, 1987. However, Executive Order No. 178
was promulgated on June 1, 1987 mandating the integration of the cost of living allowance (COLA) into
the basic wage of workers effective May 1 1987. On this same day, the Petitioner implemented the
second 5% wage increase pursuant to the MOA.

Private Respondent, however, contested that the COLA should be added as part of the basic
wage before implementing the 5% increase. On the December 15 1988, the union filed a complaint for
underpayment of wages before the Regional Arbitration Branch IV. Consequently, the Labor Arbiter
decided in favor of the union, which directed company to pay the wage differentials due its rank-and-file
workers citing that the date of effectivity of Executive Order No. 178 should be taken into account. The
Company appealed to the NLRC but the NLRC affirmed the decision of the Labor Arbiter. The Petitioner
further challenged the NLRC and the private respondents on the following grounds: That the ruling of
the Labor Arbiter was a grave abuse of discretion because the Executive Order did not exist at the time
of the agreement. Furthermore, it was expressly stated that the wage increase is exclusive of any
increase in the minimum wage and/or mandatory living allowance.

ISSUE

Whether of not the COLA or Cost of Living Allowance should be computed as part of the basic
wage.

We rule for the respondents.

The principle that the CBA is the law between the contracting parties
stands strong and true. However, the present controversy involves not
[17]

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. This is, and should be, the focus of the instant case.
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.

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.
Finally, petitioner misinterprets the declaration of the Labor Arbiter in the
assailed decision that when the pendulum of judgment swings to and fro and
the forces are equal on both sides, the same must be stilled in favor of labor.
While petitioner acknowledges that all doubts in the interpretation of the Labor
Code shall be resolved in favor of labor, it insists that what is involved-here
[20]

is the amended CBA which is essentially a contract between private

persons. What petitioner has lost sight of is the avowed policy of the State,
enshrined in our Constitution, to accord utmost protection and justice to labor,
a policy, we are, likewise, sworn to uphold.
In Philippine Telegraph & Telephone Corporation v. NLRC, we [21]

categorically stated that:

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.

Likewise, in Terminal Facilities and Services Corporation v. NLRC, we [22]

declared:

Any doubt concerning the rights of labor should be resolved in its favor pursuant to
the social justice policy.

ii) in appreciation of evidence

*Asuncion vs NLRC 362 SCRA 56 (2001)

FACTS: Petitioner was an accountant/bookkeeper of the Mabini

Medical Clinic. The NCR company and discovered upon
petitionerdisclosure that there were violations of the labor standards law.
Later a memo was issued charging petitioner with chronic absenteeism,
habitual tardiness, wasting time, getting money without a receipt, and
disobedience and was asked to explain why she should not be terminated
so she submitted her response. She was dismissed on the same day so
she filed a complaint for illegal dismissal. The LA ruled that there was
illegal dismissal. The NLRC set it saying that petitioner admitted that
charges.
 ISSUE: W/N there was illegal dismissal

HELD: The SC ruled in favor of petitioner. For a valid dismissal not

only must there be just cause supported by clear and convincing
evidence,. There must also be an opportunity ;to be heard.
The employer;has the burden to prove that the dismissal was just or
authorized cause. Failure to discharge this burden ;means that the
dismissal ;is unjustified. 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 theabsences and tardiness. The 2 day period given
to answer the allegations is an unreasonably short period of time.
The clinic can’t have given ample opportunity to answer the charges
filed. There are serious doubts as to the factual basis of the charges
against petitioner. There doubts shall be resolved in her favor in line with
the policy rule list that if doubts exist between the evidence presented by
the employer and the employee, the scales of justice must be titled in
favor of the latter.

iii) in application of policies and programs

* PNCC vs NLRC 277 SCRA 91 (1997)

In the interpretation of an employer’s retrenchment program providing

for separation benefits, all doubts should be construed in favor of the
underprivileged worker.

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.
[6]

However, petitioner denied his claim. Thus, on September 5, 1989, private

respondent filed a complaint for nonpayment of separation pay as provided for
in said program. As earlier stated, the executive labor arbiter granted private
[7]

respondents plea, and public respondent affirmed such grant minus the award
of attorneys fees.
No motion for reconsideration was filed because, according to petitioner,
the questions raised before this Honorable Court are the same questions
which were considered by Public Respondent NLRC. [8]

Acting on the petition, this Court (Second Division) in a Resolution dated

October 27, 1992 issued a restraining order enjoining respondents from
enforcing the assailed Decision.

Private respondent was a project employee and his service with petitioner was not
continuous.

The executive labor arbiter phrased the latter issue thus: [12]

x x x the issue of whether the complainant is a regular or a project employee is not

relevant since respondents retrenchment or separation program grants separation
benefits to eligible employees irrespective of whether they are regular, project or
permanent employees. The only important thing to consider is whether they are
qualified or eligible to receive these benefits under the program.

Petitioner contends that the complaint is barred by Article 291 of the [13]

Labor Code for having been filed late on September 5, 1989 or after the lapse
of more than three (3) years from his separation from employment on May 18,
1986. Petitioner argues further that private respondent was employed only
[14]

for ten (10) months from August 17, 1988 again as project employee, until his
separation on June 15, 1989. Thus, he is not entitled to separation pay
[15]

under its special separation program which applies only to employees who
have rendered at least one year of continuous service at the time of their
separation from PNCC. [16]

Private respondent, on the other hand, alleges that he cannot be expected

to file a claim for separation benefits within 3 years after 1986 when [he] was
rehired within two (2) years or in 1988. Further, private respondent contends
[17]

that since he was terminated from service on 15 June 1989 or five (5) months
after the cut-off date of 16 January 1989, he was covered by the separation
program

Xxx

What is being contested in this case is whether private respondent is

covered by paragraph 2.1 of the separation program of PNCC. We again
quote the said paragraph: [25]

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.

The Court notes that the photocopy of the Separation Program with
Special Benefits shows that there is a comma after the word regular; thus, it
reads: all regular, project employees and permanent employees x x x. The
comma is also found in petitioners Counter-Manifestation filed with the
executive labor arbiter. In the petition itself, however, no comma was placed
after the word regular.
The requisites of petitioners separation program are as follows:
1.The employee must be either a regular, project or permanent employee;
2.He rendered at least one (1) year of continuous service for the petitioner;
3.He was actively employed in the Company as of the date of his separation.
4.He must have been separated from service on the effectivity of the Separation
Program or on January 16, 1989 or later.[26]

Regarding the first requisite, petitioner does not deny that private
respondent was a project employee; thus: [27]
The employment terms and conditions of Private Respondent contained in the reverse
side of his appointment paper (Exhs. 1 and 1-A of PNCCs Reply Position
Paper/Annex C to the Petition) clearly showed that he was a project
worker. Moreover, his said appointment paper defined a regular employee as
a permanent employee with respect to a particular project and in no instance beyond
the completion of the items of work or project to which he is
employed. (Underscoring supplied)

Moreover, private respondents employment contracts explicitly describe

his employment status as regular. Private respondents appointment paper
dated September 23, 1982 contained the following particulars: [28]

1. Re-hired

2. A regular employee

3. Entitled to the separate MELA under PD 1634, 1678, 1713 and wage order #1

4. Not entitled to meal allowance at project site

5. Paid wages, accrued leave benefits and portion of 13th month pay at EMO-Magat

His second appointment paper dated October 6, 1982 included the

following:[29]

1. Re-hired from CSY

2. A regular employee

3. Entitled to separate MELAS per PD 1634, 1678, 1713 & W.O. # 1

The clear provisions above have no other import than that private
respondent was a regular employee as of September 23, 1982 and, as such,
also covered by the separation program. These employment contracts
ineludibly strengthen the right of private respondent to separation pay under
the PNCC program. Whether as a regular or as a project employee, private
respondent is clearly covered by the said program.
We also note that petitioner did not deny that it continuously employed
private respondent starting July 14, 1981 in different work assignments,
interrupted only by the completion of each project.
 Private respondent likewise meets the second requisite of the separation
program. He has rendered more than one (1) year of continuous service with
petitioner; in fact, he had worked for petitioner for at least five (5) years, one
(1) month and seven (7) days.Private respondents first work engagement from
July 14, 1981 to September 23, 1982 lasted for one (1) year, two (2) months
and nine (9) days. His second and third work engagements from September
27, 1982 to August 1, 1984 were for one (1) year, ten (10) months and three
(3) days. His fourth work engagement from February 22, 1985 to May 18,
1986 lasted for one (1) year, two (2) months and twenty-six (26) days. The
duration of his fifth, which was also his last work engagement, from August
17, 1988 to June 15, 1989 was nine (9) months and twenty-eight (28) days.
The program bases the computation of separation benefits on every year
of completed/credited service. Contrary to petitioners claims, nothing in the
phrase every year of completed/credited service can be understood as
requiring that the service be continuous.Thus, it should be stressed that the
requirement of continuous service pertains only to ones eligibility under the
program. No such requirement restricts the computation of separation
benefits. In other words, there is no prohibition for the cumulation of the
services rendered by qualified employees.
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. [30]

Because private respondent was actively employed by PNCC until

June 15, 1989, he was undoubtedly covered by the separation program
embracing employment separation on or after January 16, 1989. Thus,
his situation also meets the third and fourth requisites of the separation
program.
In the interpretation of an employers program providing for separation
benefits, all doubts should be construed in favor of labor. After all, workers are
the intended beneficiaries of such program and our Constitution mandates a
clear bias in favor of the working class.

3. Burden of Proof
i) In illegal dismissal cases

* Gurango vs Best Chemicals GR No. 174593, August 25, 2010

FACTS:

Respondent (Best) is a corporation engaged in the manufacture of biaxally oriented polypropylene and
related products.

Petitioner Gurango was hired as a boiler operator of respondent corporation.

Respondent Best issued a memorandum order prohibiting its employees bringing personal items to their
work area. A suspension of 6 days without pay shall be its sanction to erring employees.

On May 5, 2003, Petitioner Gurango was caught bringing a camera without a film inside the production
area. Romeo Albao, the security guard, tried to confiscate the camera from him but Gurango refuses to
give up the camera. Thus, it turns out into a heated argument and a fistfight between them occurred.
Other security guards tried to pacify them thus their brawl ended. Because of that incident, Respondent
corporation dismissed Petitioner Gurango from his job on the ground of gross misconduct.

Petitioner Gurango filed a complaint for illegal dismissal against respondent.

The Labor Arbiter (LA) ruled in favor of Petitioner that he was illegally dismissed from his job. LA also
ordered respondent to pay petitioner backwages and separation pay.

On appeal, NLRC affirmed LA's decision. That the bringing of camera is not included in the memorandum
order and contending that an unloaded camera will not disrupt nor obstruct company services and
operations.

Court of Appeals (CA) set aside NLRC's ruling. Asserting that fistfight with fellow employees is a serious
misconduct.

A Motion for Reconsideration was filed by Petitioner but was denied.

ISSUE:

WON petitioner was illegally dismissed.

RULING:

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. In AMA Computer College — East
Rizal v. Ignacio, the Court held that:
27
 In termination cases, the burden of proof rests on the employer to show that the
dismissal is for just cause. 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. 28

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. In AMA Computer College –
East Rizal, the Court held that:

The Labor Code provides that an employer may terminate the services of an
employee for a just cause. Among the just causes in the Labor Code is serious
misconduct. Misconduct is improper or wrong conduct. It is the transgression of
some established and definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere error in judgment.
The misconduct to be serious within the meaning of the Labor Code must be of
such a grave and aggravated character and not merely trivial or unimportant. x x x

In National Labor Relations Commission v. Salgarino, the Court stressed that “[i]n
order to constitute serious misconduct which will warrant the dismissal of an
employee under paragraph (a) of Article 282 of the Labor Code, it is not
sufficient that the act or conduct complained of has violated some established
rules or policies. It is equally important and required that the act or conduct
must have been performed with wrongful intent.”

After a thorough examination of the records of the case, however, the Court finds
that petitioner AMACCI miserably failed to prove by substantial evidence its
charges against respondent. There is no showing at all that respondent’s actions
 were motivated by a perverse and wrongful intent, as required by Article 282(a) of
the Labor Code. (Emphasis supplied)
29

The surrounding circumstances show that Gurango did not engage in a fistfight: (1) in
his 9 May 2003 letter to BCPI, Juanitas corroborated Gurango’s version of the facts;
(2) nobody corroborated Albao’s version of the facts; (3) in his medical report, Dr.
Aguinaldo found that Gurango suffered physical injuries; (4) Gurango filed with the
MCTC a complaint against Albao, Cordero and Pablis for slight physical injury; (5)
the Labor Arbiter found Gurango’s statement credible and unblemished; (6) the Labor
Arbiter found Albao’s statement contradictory; (7) the Labor Arbiter stated, “I am
convinced Albao lied in his statement”; (8) the NLRC found that Gurango did not
start a fight; (9) the NLRC found Albao’s statement unbelievable and exaggerated;
and (10) the Court of Appeals’ reversal of the findings of fact of the Labor Arbiter and
the NLRC is baseless.

* Labadan vs Forest Hills GR No. 172295 December 23, 2008

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.

Lilian L. Labadan (Labadan) was hired by Forest Hills Mission Academy (Forest Hills)
as an elementary school teacher in 1989. After one year of employment, she was made
registrar and secondary school teacher. In 2003, Labadan filed a complaint against
Forest Hills for illegal dismissal, non-payment of overtime pay, holiday pay, allowances,
13th month pay, service incentive leave, illegal deductions, and damages. She alleged
that she was allowed to go on leave, and albeit she had exceeded her approved leave
period, its extension was impliedly approved by the school principal because Labadan
received no warning or reprimand, and was in fact retained in the payroll. Labadan
further alleged that since 1990, tithes to the Seventh Day Adventist church, of which she
was a member, have been illegally deducted from her salary; and she was not paid
overtime pay for overtime service, 13th month pay, five days service incentive leave pay,
and holiday pay; and that her SSS contributions have not been remitted.

Forest Hills claims that Labadan was permitted to go on leave for two weeks but did not
return for work after the expiration of the period granted. Because of Labadan’s failure
to report to work despite promises to do so, Forest Hills hired a temporary employee
to accomplish the needed reports. When Labadan did return for work, classes for the
school year were already underway. With regard to the charge for illegal deduction,
Forest Hills claimed that the Seventh Day Adventist church requires its members to pay
tithes equivalent to 10% of their salaries, and that Labadan never questioned the
deduction of the tithe from her salary. As regards the non-payment of overtime pay,
holiday pay, and allowances, Forest Hills noted that petitioner proffered no evidence to
support the same.

The Labor Arbiter decided in favor of Labadan, and found that she was illegally
dismissed, and dismissed her claims for overtime pay, holiday pay, allowances, 13th
month pay, service incentive leave. The National Labor Relations Commission (NLRC)
reversed and set aside the Labor Arbiter’s decision with regard to the finding of illegal
dismissal. Labadan then filed a Petition for Certiorari with the Court of Appeals, which
was dismissed by the same. Hence, this Petition for Review on Certiorari.

ISSUES:
Whether or not Labadan was illegally dismissed by Forest Hills

HELD:
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 petitioner’s 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.

Labadan 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.” Labadan, 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.

Labadan’s affidavit and those of her former colleagues, which she attached to her
Position Paper, merely attested that she was dismissed from her job without valid cause,
but gave no particulars on when and how she was dismissed.

* Watchman vs Lumahan GR No. 212096 October 14, 2015

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).

Designated as Acting Chairperson, per Special Order No. 2222 dated September 29, 2015. Designated as
Acting Member in lieu of Associate Justice Antonio T. Carpio, per Special Order No. 2223 dated September
29, 2015.
On January 9, 2000, 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.

On March 10, 2000, 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.

On April 15, 2002, Labor Arbiter Pablo C. Espiritu, Jr. (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 in the total amount of P 224,928.26
plus 10% attorney's fees.4

On August 31, 2010, the NLRC granted Nightowl's appeal; set aside and reversed the December 15, 2004
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.7

The NLRC found that there was no evidence showing that Lumahan had been dismissed, and held that what
actually happened was an "informal voluntary termination of employment" on his end.

Xxx
We resolve to partly GRANT the petition.

The CA erred in finding grave

abuse of discretion in the NLRC's
factual conclusion that Lumahan
was not dismissed from 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.

We 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.

The CA should have first considered whether there had been a dismissal in the first place. To our mind, the
CA missed this crucial point as it presumed that Lumahan had actually been dismissed. The CA's failure to
properly appreciate this point - which led to its erroneous conclusion -constitutes reversible error that
justifies the Court's exercise of its factual review power.

We support the NLRC's approach of first evaluating whether the employee had been dismissed, and find that
it committed no grave abuse of discretion in factually concluding that Lumahan had not been dismissed from
work.

It should be remembered that in cases before administrative and quasi-judicial agencies like the NLRC, the
degree of evidence required to be met is substantial evidence,13 or such amount of relevant evidence that a
reasonable mind might accept as adequate to justify a conclusion.14 In a situation where the word of
another party is taken against the other, as in this case, we must rely on substantial evidence because a
party alleging a critical fact must duly substantiate and support its allegation.15

We agree with the NLRC that Lumahan stopped reporting for work on April 22, 1999, and never returned, as
Nightowl sufficiently supported this position with documentary evidence.

In contrast, Lumahan failed to refute, with supporting evidence, Nightowl's contention that he did not report
for work on April 22, 1999, and failed as well to prove that he continued working from such date to May 15,
1999. What we can only gather from his claim was that he did not work from May 16, 1999 to June 8, 1999;
but this was after the substantially proven fact that he had already stopped working on April 22, 1999.

The CA erred when it considered

"abandonment of work" generally
understood in employee dismissal
situations despite the fact that
Nightowl never raised it as
a defense.

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.19 It is a form of neglect of duty that constitutes just cause for the
employer to dismiss the employee.20

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."21 This burden, of course, proceeds from the general rule that places the burden
on the employer to prove the validity of the dismissal.

The CA, agreeing with LA Demaisip, concluded that Lumahan was illegally dismissed because Nightowl failed
to prove the existence of an overt act showing Lumahan's intention to sever his employment. To the CA, the
fact that Nightowl failed to send Lumahan notices for him to report back to work all the more showed no
abandonment took place.

The critical point the CA missed, however, was the fact that Nightowl never raised abandonment as a
defense. What Nightowl persistently argued was that Lumahan stopped reporting for work beginning April
22, 1999; and that it had been waiting for Lumahan to show up so that it could impose on him the
necessary disciplinary action for abandoning his post at Steelwork, only to learn that Lumahan had filed an
illegal dismissal complaint. Nightowl did not at all argue that Lumahan had abandoned his work, thereby
warranting the termination of his employment.

Significantly, the CA construed these arguments as abandonment of work under the labor law construct. We
find it clear, however, that Nightowl did not dismiss Lumahan; hence, it never raised the defense of
abandonment.

Besides, Nightowl did not say that Lumahan "abandoned his work"; rather, Nightowl stated that Lumahan
"abandoned his post" at Steelwork. When read together with its arguments, what this phrase simply means
is that Lumahan abandoned his assignment at Steelwork; nonetheless, Nightowl still considered him as its
employee whose return they had been waiting for.

Finally, failure to send notices to Lumahan to report back to work should not be taken against Nightowl
despite the fact that it would have been prudent, given the circumstance, had it done so. Report-to-work
notices are required, as an aspect of procedural due process, only in situations involving the dismissal, or
the possibility of dismissal, of the employee.22 Verily, report-to-work notices could not be required when
dismissal, or the possibility of dismissal, of the employee does not exist.
aw

* Penaflor vs Outdoor Clothing GR No. 177114 April 13, 2010

FACTS: Peñaflor was hired on September 2, 1999 as probationary HRD Manager of respondent Outdoor
Clothing Manufacturing Corporation. Peñaflor claimed that his relationship with Outdoor Clothing went
well during the first few months of his employment. His woes began when the company’s Vice President
for Operations, Edgar Lee, left the company after a big fight between Lee and Chief Corporate Officer
Nathaniel Syfu. Because of his close association with Lee, Peñaflor claimed that he was among those
who bore Syfu’s ire. After Peñaflor returned from his field work on March 13, 2000, his officemates
informed him that while he was away, Syfu had appointed Nathaniel Buenaobra as the new HRD
Manager. He tried to talk to Syfu to clarify the matter, but was unable to do so. Peñaflor claimed that
under these circumstances, he had no option but to resign. He submitted a letter to Syfu declaring his
irrevocable resignation from his employment with Outdoor Clothing effective at the close of office hours
on March 15, 2000. Peñaflor then filed a complaint for illegal dismissal with the labor arbiter, claiming
that he had been constructively dismissed. Outdoor Clothing denied Peñaflor’s allegation of constructive
dismissal. It posited instead that Peñaflor had voluntarily resigned from his work. The labor arbiter
agreed with Penaflor and issued a decision in his favor. On appeal, the NLRC reversed the arbiter’s
decision and the CA affirmed the NLRC’s decision. Hence, petitioner filed a petition for review before
the SC.

ISSUE: Can Peñaflor’s resignation be considered as constructive dismissal equivalent to an illegal

dismissal?

RULING: Yes. Peñaflor started working for the company on September 2, 1999 so that by March 1,
2000, his probationary period would have ended and he would have become a regular employee. We
find it highly unlikely that he would resign on March 1 and would simply leave given his undisputed
record of having successfully worked within his probationary period. It does not appear sound and
logical to us that an employee would tender his resignation on the very same day he was entitled by law
to be considered a regular employee, especially when a downsizing was taking place and he could have
availed of its benefits if he would be separated from the service as a regular employee. It was strange,
too, that he would submit his resignation on March 1 and keep quiet about this until its effective date
on March 15. In our view, it is more consistent with human experience that Peñaflor indeed learned of
the appointment of Buenaobra only on March 13, 2000 and reacted to this by tendering his resignation
letter after realizing that he would only face hostility and frustration in his working environment. Three
very basic labor law principles support this conclusion and militate against the company’s case.

The first is the settled rule that in employee termination disputes, the employer bears the burden of
proving that the employee’s dismissal was for just and valid cause. That Peñaflor did indeed file a letter
of resignation does not help the company’s case as, other than the fact of resignation, the company
must still prove that the employee voluntarily resigned. There can be no valid resignation where the act
was made under compulsion or under circumstances approximating compulsion, such as when an
employee’s act of handing in his resignation was a reaction to circumstances leaving him no alternative
but to resign. In sum, the evidence does not support the existence of voluntariness in Peñaflor’s
resignation.
Another basic principle is that expressed in Article 4 of the Labor Code—that all doubts in the
interpretation and implementation of the Labor Code should be interpreted in favor of the workingman.
Thus, we find that Peñaflor was constructively dismissed given the hostile and discriminatory working
environment he found himself in, particularly evidenced by the escalating acts of unfairness against him
that culminated in the appointment of another HRD manager without any prior notice to him. Where no
less than the company’s chief corporate officer was against him, Peñaflor had no alternative but to
resign from his employment.

Last but not the least, we have repeatedly given significance in abandonment and constructive dismissal
cases to the employee’s reaction to the termination of his employment. We find from the records that
Peñaflor sought almost immediate official recourse to contest his separation from service through a
complaint for illegal dismissal. This is not the act of one who voluntarily resigned; his immediate
complaints characterize him as one who deeply felt that he had been wronged.

*Vicente vs CA and Cinderella Marketing GR No. 175988 August 24, 2007

Facts:
Vicente was employed by respondent Cinderella Marketing Corporation (Cinderella) as
Management Coordinator in January 1990. Prior to her resignation in February 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.

She 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 and Mr.
Tecson (AVP-Finance) approves the same.

After some time, one of Cinderellas suppliers complained about the unauthorized
deductions from the net sales due them. Accordingly, 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.

Vicente alleged that Mr. Tecson demanded her resignation on several occasions. Mr.
Tecson allegedly told her MAGRESIGN KANA AGAD KASI MAIIPIT KAMI. As a result of this
alleged force and intimidation, 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.

LA - Vicente was constructively and illegally dismissed. Cinderella was not able to controvert
petitioners assertion that she was forced to resign; and the resignation letter does not bear
VIcente's signature
NLRC - affirmed
CA - reversed LA and NLRC's decision. Vicente voluntarily resigned.

Issue: WON petitioner was constructively dismissed.

Ruling:
No. Vicente voluntarily resigned from work.

Court of Appeals may review the factual findings of the NLRC and reverse its ruling if it
finds that the decision of the NLRC lacks substantial basis.

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. It is incumbent upon respondent company to prove that the employee voluntarily
resigned.

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.

A careful scrutiny of the said letter shows that it bears the signature of petitioner. More
importantly, petitioner admitted having submitted the said letter.

Subsequently, petitioner stopped reporting for work although 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 4year 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.

ii) in money claims and labor standard cases

* Abduljuahid Pigcaulan v. Security and Credit Investigation, Inc.; GR
173648 (2012)

facts of the case

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
complaints 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.
 Petitioner: In support of claims, they presented the ff: (1) daily time records, (2) itemized lists of
their claims.
Respondents: Paid their salaries and other just benefits; salaries were above the minimum wage, that
their holiday pay were already included in the computation of their monthly salaries, 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.
LA: In favor of petitioners
NLRC: Dismissed appeal and sustained LA
CA: Set aside both rulings, noting that there were no factual and legal bases mentioned in the
questioned rulings to support the conclusions made.

issue
[minor] WON the CA’s decision is considered final as to Canoy. YES, since he failed to file pertinent
pleadings and documents as to include him as a petitioner in the SC Case
WON OT pay should be granted. NO, because of insufficient proof to support such claim
WON petitioner is entitled to holiday pay, service incentive leave and proportionate 13th month pay. YES.
Respondents failed to rebut such claims by petitioners

ratio
On finality of CA’s decision as to Canoy (minor issue)
The SC has examined the petition and found that same was filed by Pigcaulan solely on his own behalf.
This is very clear from the petition’s prefatory which is phrased as follows: COMES NOW Petitioner
Abduljuahid R. Pigcaulan, by counsel, unto this Honorable Court x x x.
Also, under the heading “Parties”, only Pigcaulan is mentioned as petitioner and consistent with this, the
body of the petition refers only to a “petitioner” and never in its plural form “petitioners”. Aside from the
fact that the Verification and Certification of Non-Forum Shopping attached to the petition was executed by
Pigcaulan alone, it was plainly and particularly indicated under the name of the lawyer who prepared the same,
Atty. Josefel P. Grageda that he is the “Counsel for Petitioner Adbuljuahid Pigcaulan” only. In view of these,
there is therefore, no doubt, that the petition was brought only on behalf of Pigcaulan. Since no appeal from
the CA Decision was brought by Canoy, same has already become final and executory as to him.
Besides, assuming that the petition is also filed on his behalf, Canoy failed to show any reasonable cause
for his failure to join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as
a litigant, to be prudent in pursuing his claims against SCII, especially so, if he was indeed suffering from
financial distress.

WRT to OT claim
 There was no substantial evidence to support the grant of overtime pay.
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.

WRT to holiday pay, service incentive leave and 13th month pay (see relevant laws1)
G.R. Employers have the burden of proving that it has paid the benefits the employees are entitled to
Also, the one who pleads payment has the burden of proving it

In this case, the SCII presented payroll listings and transmittal letters to the bank to show that Canoy and
Pigcaulan received their salaries as well as benefits which it claimed are already integrated in the employees’
monthly salaries. BUT, 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. Since SCII failed to provide
convincing proof that it has already settled the claims, Pigcaulan should be paid his holiday pay, service
incentive leave benefits and proportionate 13th month pay for the year 2000.

---------------------------------

WHEREFORE, the petition is GRANTED. The Decision dated

February 24, 2006 and Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515 are
REVERSED and SET ASIDE. Petitioner Abduljuahid R. 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.

The case is REMANDED to the Labor Arbiter for further proceedings to determine the exact amount and to
make a detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit
Investigation Inc. should pay without delay.

E. No Work No Pay
1. Aklan Electric Cooperative vs NLRC 323 SCRA 258 (2000)

FACTS: On January 22, the Board of AKELCO allowed the

temporary transfer holding of office at Kalibo, Aklan. Nevertheless,

1 ART. 94. RIGHT TO HOLIDAY PAY. – (a) Every worker shall be paid his regular daily wage during regular holidays, except
in retail and service establishments regularly employing less than ten (10) workers;

ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. – (a) Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive of five days with pay.
 majority of the employees continued to work at Lezo Aklan and were
paid of their salaries. An unnumbered resolution was passed by AKELCO
withdrawing the temporary designation of office at kalibo, Aklan and that
daily operation be held again at the main office of Lezo, Aklan. From
June 1992 to March 1993, complainants who reported at Lezo were not
paid their salaries. From March up to the present, complainants were
allowed to draw their salaries, with the exception of a few who were not
paid their salaries for April and May 1993. The respondents allege that
the complainants voluntarily abandoned their work assignments and that
theydefied the lawful orders by the General manager and thus
the Board ofDirectors passed a resolution resisting and denying the
claims of these complainants under the principle of “no work, no pay.”
NLRC held that private respondents are entitled to unpaid wages from
June 1992 up to march 1993.

ISSUE: Whether or not private respondents are covered by the

“no work, no pay” principle and thus not entitled to the claim for unpaid
wages from June 1992 to March 1993.

HELD: Yes. Petitioner was able to show that the private

respondents did not render services during the stated period. Also,
private respondents in their position paper admitted that they did not
report at the Kalibo office, as Lezo remained to be their office where they
continuously reported. Their excuse that the transfer to Kalibo was
illegal; however it was not for private respondents to declare the
management’s act of transferring the AKELCO office to Kalibo as an
illegal act as there was no allegation of proof that such was made in bad
faith or with malice. The unnumbered resolution returning the office from
Kalibo to Lezo was not a valid act of petitioner’s legitimate board and
was never implemented. Private respondents were dismissed by
petitioner effective January 1992 and were accepted back, subject to
the condition of ‘no work, no pay” effective March 1993 which is they
were allowed to draw their salaries again. Since the burden of evidence
lies with the party who asserts theaffirmative allegation, the plaintiff or
complainant has to prove his allegations in the complaint.

2. Lao Construction vs NLRC 278 SCRA 716 (1997)

Within the periods of their respective employments, they alternately
worked for petitioners Tomas Lao Corporation (TLC), Thomas and James
Developers (T&J) and LVM Construction Corporation (LVM), altogether
informally referred to as the Lao Group of Companies, the three (3) entities
comprising a business conglomerate exclusively controlled and managed by
members of the Lao family.
TLC, T&J and LVM are engaged in the construction of public roads and
bridges. Under joint venture agreements they entered into among each other,
they would undertake their projects either simultaneously or successively so
that, whenever necessary, they would lease tools and equipment to one
another. Each one would also allow the utilization of their employees by the
other two (2). With this arrangement, workers were transferred whenever
necessary to on-going projects of the same company or of the others, or were
rehired after the completion of the project or project phase to which they were
assigned. Soon after, however, TLC ceased its operations while T&J and [2]

LVM stayed on.

Sometime in 1989 Andres Lao, Managing Director of LVM and President
of T&J, issued a memorandum requiring all workers and company personnel
[3] [4]

to sign employment contract forms and clearances which were issued on 1

July 1989 but antedated 10 January 1989. These were to be used allegedly
for audit purposes pursuant to a joint venture agreement between LVM and
T&J. To ensure compliance with the directive, the company ordered the
withholding of the salary of any employee who refused to sign. Quite notably,
the contracts expressly described the construction workers as project
employees whose employments were for a definite period, i.e., upon the
expiration of the contract period or the completion of the project for
which the workers was hired.

NLRC RAB VIII dismissed the complaints lodged before it, finding that private respondents were
project employees whose employments could be terminated upon completion of the projects or
project phase for which they were hired. It upheld petitioners contention that the execution of
their employment contracts was to forestall the eventuality of being compelled to pay the
workers their salaries even if there was no more work to be done due to the completion of the
projects or project phases.

The main thrust of petitioners expostulation is that respondents have no valid cause to complain
about their employment contracts since these documents merely formalized their status as
project employees. They cite Policy Instruction No. 20 of the Department of Labor which defines
project employees as those employed in connection with a particular construction project,
adding that the ruling in Sandoval Shipyards, Inc. v. NLRC[8] applies squarely to the instant case
because there the Court declared that the employment of project employees is co-terminous
with the completion of the project regardless of the number of projects in which they have
worked. And as their employment is one for a definite period, they are not entitled to separation
pay nor is their employer required to obtain clearance from the Secretary of Labor in connection
with their termination. Petitioners thus argue that their dismissal from the service of private
respondents was legal since the projects for which they were hired had already been
completed. As additional ground, they claim that Mario Labendia and Roberto Labendia had
absented themselves without leave giving management no choice but to sever their
employment.

Xxx

We are not convinced. 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 (and scope) of which are specified at the time the
employees are engaged for the project. Project in the realm of business and
industry refers to a particular job or undertaking that 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. Such job or undertaking
begins and ends at determined or determinable times. [9]

While it may be allowed that in the instant case the workers were initially
hired for specific projects or undertakings of the company and hence can be
classified as project employees, the repeated re-hiring and the continuing
need for their services over a long span of time (the shortest, at seven
[7] years) have undeniably made them regular employees. Thus, we held
that where the employment of project employees is extended long after
the supposed project has been finished, the employees are removed
from the scope of project employees and considered regular
employees. [10]

Moreover, if 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
[17]

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
[18]

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. [19]

We agree with the NLRC that the execution of the project employment
contracts was farcical. Obviously, the contracts were a scheme of
[20]

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 [21]

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.
We likewise reject petitioners justification in re-hiring private
respondents i.e., that it is much cheaper and economical to re-hire or re-
employ the same workers than to train a new set of employees. It is precisely
because of this cost-saving benefit to the employer that the law deems it fair
that the employees be given a regular status. We need not belabor this point.
The NLRC was correct in finding that the workers were illegally
dismissed. The rule is that in effecting a valid dismissal, the mandatory
requirements of substantive and procedural due process must be strictly
complied with. These were wanting in the present case. Private respondents
were dismissed allegedly because of insubordination or blatant refusal to
comply with a lawful directive of their employer. But willful disobedience of the
employers lawful orders as a just cause for the dismissal of the employees
envisages the concurrence of at least two (2) requisites: (a) the employees
assailed conduct must have been willful or intentional, the willfulness being
characterized by a wrongful and perverse attitude; and, (b) the order violated
must have been reasonable, lawful, made known to the employee and must
pertain to the duties which he has been engaged to discharge. The refusal
[22]

of private respondents was willful but not in the sense of plain and perverse
insubordination. It was dictated by necessity and justifiable reasons - for what
appeared to be an innocent memorandum was actually a veiled attempt to
deny them their rightful status as regular employees. The workers therefore
had no option but to disobey the directive which they deemed unreasonable
and unlawful because it would result in their being downsized to mere project
workers. This act of self-preservation should not merit them the extreme
penalty of dismissal.
The allegation of petitioners that private respondents are guilty of
abandonment of duty is without merit. The elements of abandonment are: (a)
failure to report for work or absence without valid or justifiable reason, and, (b)
a clear intention to sever the employer-employee relationship, with the second
element as the more determinative factor manifested by some overt acts. In [23]

this case, private respondents Roberto Labendia and Mario Labendia were
forced to leave their respective duties because their salaries were
withheld. They could not simply sit idly and allow their families to starve. They
had to seek employment elsewhere, albeit temporarily, in order to survive. On
the other hand, it would be the height of injustice to validate abandonment in
this particular case as a ground for dismissal of respondents thereby making
petitioners benefit from a gross and unjust situation which they themselves
created. Private respondents did not intend to sever ties with petitioner and
[24]

permanently abandon their jobs; otherwise, they would not have filed this
complaint for illegal dismissal. [25]

Petitioners submit that since private respondents were only project

employees, they are not entitled to security of tenure. This is
incorrect. In Archbuild Masters and Construction, Inc. v. NLRC we held -
[26]

x x x a project employee hired for a specific task also enjoys security of tenure. A
termination of his employment must be for a lawful cause and must be done in a
manner which affords him the proper notice and hearing x x x x To allow employers
to exercise their prerogative to terminate a project workers employment based on
gratuitous assertions of project completion would destroy the constitutionally
protected right of labor to security of tenure (emphasis supplied).

The burden of proving that an employee has been lawfully dismissed

therefore lies with the employer. In the case at bar, the assertions of
petitioners were self-serving and insufficient to substantiate their claim of
proximate project completion. The services of the employees were terminated
not because of contract expiration but as sanction for their refusal to sign the
project employment forms and quitclaims.

3. Imbuido vs NLRC 329 SCRA 357 (2000)

 FACTS: Petitioner was employed as a date encoder by private
respondent. From 1988 until 1991, she entered into 13 employment
contracts with private respondent, each contract for a period of 3
months. In September 1991, petitioner and 12 other employees
allegedly agreed to the filing of a PCE of the rank and file employees of
private respondent. Subsequently, petition received a termination latter
due to “low volume of work.” Petitioner filed a complaint for illegal
dismissal. The labor Arbiter found in favor of petitioner ruling that she
was a regular employee. The NLRC reversed the decision stating that
although petitioner is a regular employee, she has no tenurial security
beyond the period for which she was hired (only up to the time the
specific project for which she was hired was completed). Petitioner filed
the present appeal.

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.

Private respondent was employed as a data encoder performing duties,

which are usually necessary or desirable in the usual business or trade of
the employer, continuously for a period of more than 3 years. Being a
regular employee, petitioner is entitled to security of tenure and could
only be dismissed for a just and authorized cause; low volume of work is
not a valid cause for dismissal under Art. 282 or 283. Having worked for
more than 3 years, petitioner is also entitled to service incentive leave
benefits from 1989 until her actual reinstatement since such is
demandable after one year of service, whether continuous or broken.

F. Equal Day for Equal Work

1. Internation School vs Quisumbing 333 SCRA 13 (2000)
FACTS:
The private respondent, International School, Inc. pursuant to Presidential Decree 732, is a domestic
educational institution established primarily for dependents of foreign diplomatic personnel and
other temporary residents.
The school grants foreign-hires certain benefits not accorded to local hires. These include housing,
transportation, shipping costs, taxes, and home leave travel allowance. Foreign hires are also paid a
salary rate twenty-five percent (25%) more than local hires. The School justifies the difference on
two “significant economic disadvantages” foreign-hires have to endure, namely (a) the “dislocation
factor” and (b) limited tenure.
The compensation scheme is simply the School’s adaptive measure to remain competitive on an
international level in terms of attracting competent professionals in the field of international
education.
Local hires filed a petition claiming that point-of-hire classification employed by the School is
discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial
discrimination.

ISSUE: Whether or not the School’s system of compensation is violative of the principle of “equal
pay for equal work”

RULING: Discrimination, particularly in terms of wages, is frowned upon by the Labor Code.
Article 135, for example, prohibits and penalizes the payment of lesser compensation to female
employees as against a male employee for work of equal value. Art. 248 declares it an unfair labor
practice for an employer to discriminate in regard to wages in order to encourage or discourage
membership in an labor organization.

Persons who work with substantially equal qualifications, skill, effort and responsibility,
under similar conditions, should paid similar salaries. If an employer accords employees the
same position and rank, the presumption is that these employees perform equal work. This
presumption is borne by logic and human experience. If the employer has discriminated
against an employee, it is for the employer to explain why the employee is treated unfairly.
The employer in this case had failed to do so. There is no evidence here that foreign-hires perform
25% more efficiently or effectively than local-hires. Both groups have similar functions and
responsibilities, which they perform under similar working conditions.

G. Last in First out

1. Maya Farms Employees Organization vs NLRC 239 SCRA 508 (1994)

H. One Company – One Union

1. Philtranco Services Enterprises vs BLR 174 SCRA 388 (1989)

I. Four Fold Test

1. Cesar Lirio (Celkor Ad Sonicmix) v. Wilmer Genovia; GR 169757 (2011)

2. Marticio Semblante and Dubrick Pilar v. CA, Gallera de Mandaue and Spouses Loot;
GR 196426 (2011)

J . Management Prerogative

1. De La Salle University vs De la Salle University Employees Association 330

 SCRA 363 (2000)
2. San Miguel Brewery Sales Force Union (PTGWO) vs Ople GR No. 53515
(1989) 170 SCRA 25 (1989)
2. Capitol Medical Center vs Meris GR No. 155098 (2005) 470 SCRA 125
(2005)
3. Manila Pavillion vs Delada GR No. 189947 (2012)
4. Blue Dairy Corporation vs NLRC 314 SCRA 401 (1999)
5. Almodiel vs NLRC 223 SCRA 341 (1993)
6. Interphil Laboratories (FFW) vs Interphil – 372 SCRA 658 (2001)

II. Recruitment and Placement

A. Recruitment of local and migrant workers

1. Illegal recruitment (Sec. 5, R.A. No. 10022)
a) License vs. authority. Definition of terms. (Article 13 Labor Code)
b) Essential elements of illegal recruitment
* People vs Angeles GR No. 132376
April 11, 2002
* People vs Ong GR No. 119594
January 18, 2000

c) Simple illegal recruitment

d) Illegal recruitment in large scale

e) Illegal recruitment as economic sabotage

f) Illegal recruitment vs. estafa

*People vs Calonzo GR No. 115150
September 27, 1996)

g) Liabilities
(i) Local recruitment agency
(ii) Foreign employer
(a) Theory of imputed knowledge
(iii) Solidary liability
h) Pre-termination of contract of migrant worker
*Serrano vs Gallant Maritime Sevices GR No. 167614 March 24,
2009)
2. Direct hiring (article 18 Labor Code)
* Name hirees
3. Contractual nature of overseas employment
* Millares vs NLRC GR No. 110524 July 29, 2002;
* Santiago vs CF Sharp GR No. 162419 July 10, 2007
4. Minimum terms and conditions of Overseas Employment Contract
 B. Regulation and enforcement
1. Suspension or cancellation of license or authority (Art. 35, Labor Code)
2. Regulatory and visitorial powers of the DOLE secretary
3. Remittance of foreign exchange earnings (Article 22 Labor Code)
4. Prohibited activities (Article 34 and Article 38 Labor Code; RA 8042 Sec
6)

C. Jurisdiction of POEA and Labor Arbiter (RA 8042 Section 10,

D. Repatriation of Workers (Section 15, RA 8042)

* Equi Asia Placement Inc vs DFA and DOLE – GR No. 152214 September 19,
2006

E. Nationality requirements (Article 27 Labor Code)

F. Hiring of Foreign nationals for Domestic employment (Artic 40 and article 41

Labor Code)