aug. 2010 jurisprudence in labor law.doc

8/13/2019 aug. 2010 jurisprudence in labor law.doc

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JURISPRUDENCE ON LABOR LAW2009-2010

AUGUST 2010

Labor Law

Dismissal; abandonment. Time and again, the Supreme Court has held thatabandonment is totally inconsistent with the immediate filing of a complaint forillegal dismissal, more so if the same is accompanied by a prayer for reinstatement.In the present case, however, petitioner filed his complaint more than one yearafter his alleged termination from employment. Moreover, petitioner did not as forreinstatement in the complaint form, which he personally filled up and filed with the!"#C. The prayer for reinstatement is made only in the $osition $aper that was laterprepared by his counsel. This is an indication that petitioner never had the intentionor desire to return to his %ob. Elpidio Calipay vs. National Labor RelationsCommission, et al., G.R. No. 166411, August 3, !1!.

Dismissal; burden of proof. In termination cases, the employer has the burden ofproving, by substantial evidence that the dismissal is for %ust cause. If the employerfails to discharge the burden of proof, the dismissal is deemed illegal. In the presentcase, &C$I failed to discharge its burden when it failed to present any evidence ofthe alleged fistfight, aside from a single statement, which was refuted bystatements made by other witnesses and was found to be incredible by both the"abor 'rbiter and the !"#C.Ale" Gurango vs. #est C$emi%als and &lasti%, 'n%., etal., G.R. No. 1(4)*3, August ), !1!.

Dismissal; burden of proof. The law mandates that the burden of proving thevalidity of the termination of employment rests with the employer. (ailure to

discharge this evidentiary burden would necessarily mean that the dismissal wasnot %ustified and, therefore, illegal. )nsubstantiated suspicions, accusations, andconclusions of employers do not provide for legal %ustification for dismissingemployees. In case of doubt, such cases should be resolved in favor of labor,pursuant to the social %ustice policy of labor laws and the Constitution. CenturyCanning Corporation, Ri%ardo +. &o, r., et al. vs. -i%ente Randy R. Ramil, G.R. No.1(163!, August , !1!.

Dismissal; due process. In termination proceedings of employees, procedural dueprocess consists of the twin re*uirements of notice and hearing. The employer mustfurnish the employee with two written notices before the termination ofemployment can be effected+ - the first apprises the employee of the particular

acts or omissions for which his dismissal is sought; and / the second informs theemployee of the employer0s decision to dismiss him. The re*uirement of a hearingis complied with as long as there was an opportunity to be heard, and notnecessarily that an actual hearing was conducted. &$arma%ia and /p0o$n, 'n%., etal. vs. Ri%ardo &. Albayda, r., G.R. No. 1((4, August 3, !1!.

Dismissal; due process. The "abor Code recogni1es the right to due process of allworers, without distinction as to the cause of their termination, even if the causewas their supposed involvement in strie2related violence. In the present case,$3IMC4 sent a letter to the affected union members5officers, directing them toe6plain within /7 hours why they should not be dismissed for the illegal acts theycommitted during the strie; three days later, the union members5officers were

informed of their dismissal from employment. 8e do not find this companyprocedure to be sufficient compliance with due process. It does not appear from theevidence that the union officers were specifically informed of the charges againstthem. 'lso, the short interval of time between the first and second notice showsthat a mere toen recognition of the due process re*uirements was made,indicating the company0s intent to dismiss the union members involved, without anymeaningful resort to the guarantees accorded them by law. &'2C 'ndustries, 'n%.
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vs. &'2C 'ndustries Labor Asso%iation &'LA5, et al., G.R. No. 1(!3!, August 11, !1!.

Dismissal; employee0s past infractions. ' previous offense may be used as valid%ustification for dismissal from wor only if the past infractions are related to thesubse*uent offense upon which the basis of termination is decreed. The

respondent0s previous incidents of tardiness in reporting for wor were entirelyseparate and distinct from his latest alleged infraction of forgery. 3ence, the samecould no longer be utili1ed as an added %ustification for his dismissal. &esides,respondent had already been sanctioned for his prior infractions. To consider theseoffenses as %ustification for his dismissal would be penali1ing respondent twice forthe same offense. Century Canning Corporation, Ri%ardo +. &o, r., et al. vs. -i%enteRandy R. Ramil, G.R. No. 1(163!, August , !1!.

Dismissal; feng shui; breach of trust and confidence. The Court finds that thecomplainant0s allegations are more credible and that she was dismissed from heremployment because the (eng Shui master found that complainant0s Chinese9odiac Sign was a mismatch to that of respondents. This is not a %ust and validcause for an employee0s dismissal.

In contrast, respondent0s pleadings and evidence suffer from severalinconsistencies and the affidavits presented by respondents only pertain to pettymatters that are not sufficient to support respondent0s alleged loss of trust andconfidence. To be a valid cause for termination of employment, the act or actsconstituting breach of trust must have been done intentionally, nowingly, andpurposely; and they must be founded on clearly established facts. ens$a 7paCenter, in%. and8or 9u :$i ie ,vs. Loreta +. ;ung, G.R. No. 1)1, August 16, !1!.

Dismissal; gross negligence and loss of confidence. :ross negligence connotes

want of care in the performance of one0s duties.< $etitioner0s failure on = separateoccasions to re*uire clients to sign the re*uisite documents constituted grossnegligence. (urthermore, it has been held that if the employees are cashiers,managers, supervisors, salesmen or other personnel occupying positions ofresponsibility, the employer0s loss of trust and confidence in said employees may

%ustify the termination of their employment. 's the &an0s $ersonal &aningManager, petitioner0s failure to comply with basic baning policies and procedureswere inimical to the interests of the ban, maing his dismissal based on loss ofconfidence %ustified.esus E.


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Dismissal; pro%ect employees; damages. $rior or advance notice of termination isnot part of procedural due process if the termination of a pro%ect employee isbrought about by the completion of the contract or phase thereof. This is becausecompletion of the wor or pro%ect automatically terminates the employment, inwhich case, the employer is, under the law, only obliged to render a report to theD4">. Therefore, failing to give pro%ect employees advance notice of their

termination is not a violation of procedural due process and cannot be the basis forthe payment of nominal damages. a>aisang La>as ng 2anggaga?a sa ei$in NL2BLAL'AB2/5 and elen-alenuela vs. ei$in &$ilippines Corporation, G.R. No. 1(111), August *, !1!.

Dismissal; union security. In terminating the employment of an employee byenforcing the union security clause, the employer needs to determine and provethat+ - the union security clause is applicable; / the union is re*uesting for theenforcement of the union security provision in the C&'; and = there is sufficientevidence to support the decision of the union to e6pel the employee from the union.

These re*uisites constitute %ust cause for terminating an employee based on theunion security provision of the C&'.

The petitioner failed to satisfy the third re*uirement since nothing in the recordswould show that respondents failed to maintain their membership in good standingin the union. Significantly, petitioner0s act of dismissing respondents stemmed fromthe latter0s act of signing an authori1ation letter to file a petition for certificationelection as they signed it outside the freedom period. The mere signing of anauthori1ation letter before the freedom period is not sufficient ground to terminatethe employment of respondents inasmuch as the petition itself was actually filedduring the freedom period. The court emphasi1es anew that the employer is bound
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to e6ercise caution in terminating the services of his employees especially so whenit is made upon the re*uest of a labor union pursuant to the Collective &argaining'greement. &i%op Resour%es 'n%orporated &R'5 vs. Ana%leto L. +aDe%a, et al., G.R.No. 16!, August *, !1!.

Dimissal; use of illegal drugs. The law is clear that drug tests shall be performed

only by authori1ed drug testing centers. In this case, Sulpicio "ines failed to provethat S.M. "a1o Clinic is an accredited drug testing center nor did it deny thecomplainant0s allegation that S.M. "a1o Clinic was not accredited. 'lso, only ascreening test was conducted to determine if the complainant was guilty of usingillegal drugs. 7ulpi%io Lines did not %onirm t$e positive result o t$e s%reening test?it$ a %onirmatory testas re*uired by #.'. ?-@A. 3ence, Sulpicio "ines failed toindubitably prove that !acague was guilty of using illegal drugs and failed to clearlyshow that it had a valid and legal cause for terminating !acague0s employment.8hen the alleged valid cause for the termination of employment is not clearlyproven, as in this case, the law considers the matter a case of illegal dismissal.

erey Na%ague vs. 7ulpi%io Lines, 'n%., G.R. No. 1()*, August , !1!.

Dismissal; validity. The company did not adduce any evidence to prove that Sia1ar0sdismissal had been for a %ust or authori1ed cause, as in fact it had been itsconsistent stand that it did not terminate him and that he *uit on his own. &ut giventhe findings of the Court that the company had indeed dismissed Sia1ar and thatsuch dismissal has remained une6plained, there can be no other conclusion but thatthe dismissal was illegal.Agri%ultural and 'ndustrial 7upplies Corporation, et al. vs.

ueber &. 7iaar, et al., G.R. No. 1((*(!, August ), !1!.

Due process; decision rendered without due process. The violation of a party0s rightto due process raises a serious %urisdictional issue that cannot be glossed over ordisregarded at will. 8here the denial of the fundamental right to due process is

apparent, a decision rendered in disregard of that right is void for lac of%urisdiction. This rule is e*ually true in *uasi2%udicial and administrativeproceedings, for the constitutional guarantee that no man shall be deprived of life,liberty, or property without due process is un*ualified by the type of proceedingswhether %udicial or administrative where he stands to lose the same. inston F.Gar%ia vs. 2ario '. 2olina, et al.8inston F. Gar%ia -s. 2ario '. 2olina, et al., G.R. No.1)(338G.R. No. 1(413(, August 1!, !1!.

>mployee; evaluation and promotion. The fact that employees were re2classifiedfrom Bob :rade "evel - to Bob :rade "evel / as a result of a %ob evaluation programdoes not automatically entail a promotion or grant them an increase in salary. 4fprimordial consideration is not the nomenclature or title given to the employee, but

the nature of his functions. 8hat transpired in this case was only a promotion innomenclature. The employees continued to occupy the same positions they wereoccupying prior to the %ob evaluation. Moreover, their %ob titles remained the sameand they were not given additional duties and responsibilities. 7CA ygiene&rodu%ts Corporation Employees Asso%iationBFF vs. 7CA ygiene &rodu%tsCorporation, G.R. No. 1((, August *, !1!.

>mployee; security of tenure. ' worer0s security of tenure is guaranteed by theConstitution and the "abor Code. )nder the security of tenure guarantee, a worercan only be terminated from his employment for cause and after due process. (or avalid termination by the employer+ - the dismissal must be for a valid cause asprovided in 'rticle //, or for any of the authori1ed causes under 'rticles /= and

/7 of the "abor Code; and / the employee must be afforded an opportunity to beheard and to defend himself. ' %ust and valid cause for an employee0s dismissalmust be supported by substantial evidence, and before the employee can bedismissed, he must be given proper notice of such cause5s and an ade*uateopportunity to be heard. In the process, the employer bears the burden of provingthat the dismissal of an employee was for a valid cause. Its failure to discharge thisburden renders the dismissal un%ustified and, therefore, illegal. ens$a 7pa Center,'n%. and8or 9u :$i ie vs. Loreta +. ;ung, G.R. No. 1)1, August 16, !1!.
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>mployee benefit; time of death. The death should be deemed compensable underthe >CC since 3enry was on his way bac to Manila in order to be on time and beready for wor the ne6t day when his accidental death occurred. 3e should alreadybe deemed en routeto the performance of his duty at the time of the accident. Itshould be noted that 3enry0s superior allowed him to travel to "a )nion to visit hisailing mother on the condition that that he return the ne6t day. )nder these facts,

3enry was in the course of complying with his superior0s order when he met hisfatal accident. To be sure, he was not in an actual firefighting or accident situationwhen he died, but returning to wor as instructed by his superior is no lesse*uivalent to compensable performance of duty under Section -, #ule III of the >CC#ules. Government 7ervi%e 'nsuran%e 7ystem vs. Feli%itas :arate, as substituted by$er $eirs, namely 2elanie :arate, et al., G.R. No. 1(!4(, August 3, !1!.

Illegal dismissal; effect of rehabilitation proceedings. The e6istence of the Stay4rder which would generally authori1e the suspension of %udicial proceedings could not have affected the Court0s action on the present case due to thepetitioner0s failure to raise the pendency of the rehabilitation proceedings in itsmemorandum to the Court. 't any rate, a stay order simply suspends all actions forclaims against a corporation undergoing rehabilitation; it does not wor to oust acourt of its %urisdiction over a case properly filed before it. Thus, the Court0s rulingon the principal issue of the case stands. !evertheless, with "&!I0s manifestationthat it is still undergoing rehabilitation, the Court resolves to suspend the e6ecutionof our Decision until the termination of the rehabilitation proceedings. Carlos , 'n%. and Edgardo @uigue, G.R. No. 16)1)3.

August ), !1!.

Bob contracting. In permissible %ob contracting, the principal agrees to put out orfarm out with a contractor or subcontractor the performance or completion of aspecific %ob, wor or service within a definite or predetermined period, regardless ofwhether such %ob, wor or service is to be performed or completed within or outsidethe premises of the principal. The test is whether the independent contractor hascontracted to do the wor according to his own methods and without being sub%ectto the principal0s control e6cept only as to the results, he has substantial capital,and he has assured the contractual employees entitlement to all labor andoccupational safety and health standards, free e6ercise of the right to self2organi1ation, security of tenure, and social and welfare benefits. 7pi% n 7pan7ervi%es Corp. vs. Gloria &a0e, et al., G.R. No. 1(4!4, August ), !1!.

Management prerogative; transfer of employees. Burisprudence recogni1es thee6ercise of management prerogative to transfer or assign employees from oneoffice or area of operation to another, provided there is no demotion in ran or

diminution of salary, benefits, and other privileges, and the action is not motivatedby discrimination, made in bad faith, or effected as a form of punishment ordemotion without sufficient cause. To determine the validity of the transfer ofemployees, the employer must show that the transfer is not unreasonable,inconvenient, or pre%udicial to the employee; nor does it involve a demotion in ranor a diminution of his salaries, privileges and other benefits. Should the employerfail to overcome this burden of proof, the employee0s transfer shall be tantamountto constructive dismissal. &$arma%ia and /p0o$n, 'n%., et al. vs. Ri%ardo &. Albayda,

r., G.R. No. 1((4, August 3, !1!.

Merger; employee terms and conditions. That &$I is the same entity as (>&TC afterthe merger is but a legal fiction intended as a tool to ad%udicate rights and

obligations between and among the merged corporations and the persons that dealwith them. 'lthough in a merger it is as if there is no change in the personality ofthe employer, there is in reality a change in the situation of the employee. 4nce an(>&TC employee is absorbed, there are presumably changes in his condition ofemployment even if his previous tenure and salary rate is recogni1ed by &$I. It isreasonable to assume that &$I would have different rules and regulations andcompany practices than (>&TC and it is incumbent upon the former (>&TCemployees to obey these new. !ot the least of these changes is the fact that prior
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to the merger (>&TC employees were employees of an unorgani1ed establishmentand after the merger they became employees of a unioni1ed company that had ane6isting C&' with the certified union. Thus, although in a sense &$I is continuing(>&TC0s employment of these absorbed employees, &$I0s employment of theseabsorbed employees will not be under e6actly the same terms and conditions asstated in the latter0s employment contracts with (>&TC. #an> o t$e &$ilippine

'slands vs. #&' Employees /nionBven if thepetitioner as bus conductor was paid on commission basis, he falls within thecoverage of #.'. E@7- and its implementing rules. Thus, his retirement pay shouldinclude the cash e*uivalent of A2days SI" and -5-/ of -=th month pay. The !"#C0sreliance on the case of R H E +ransport, 'n%. as a basis for ruling that busconductors are not covered by the law on SI" and -= thmonth pay is erroneous sincethat involved a ta6i driver who was paid according to the boundary system.< Thereis a difference between drivers paid under the boundary system< and conductorswho are paid on commission basis. In practice, ta6i drivers do not receive fi6edwages and retain only those sums in e6cess of the boundary< or fee they pay tothe owners or operators of the vehicles. Conductors, on the other hand, are paid acertain percentage of the bus0 earnings for the day. Rodolo . 7errano vs. 7everino7antos +ransit and8or 7everino 7antos, G.R. No. 1(6*, August *, !1!.

Separation pay. In those instances where an employee has been validly dismissedfor causes other than serious misconduct or those reflecting on his moral character,separation pay may still be granted after giving considerable weight to his longyears of employment. In this case, e*uity considerations dictate that respondent0stenure be computed from -?E, the year when respondent started woring for)p%ohn, and not only from -??@, when the merger of $harmacia and )p%ohn tooplace. &$arma%ia and /p0o$n, 'n%., et al. vs. Ri%ardo p. Albayda, r., G.R. No.1((4, August 3, !1!.

Strie; validity of strie. Despite the validity of the purpose of a strie and theunion0s compliance with the procedural re*uirements, a strie may still be heldillegal where the means employed are illegal. 8hile the strie had not been marredby actual violence and patent intimidation, the piceting that respondent $I"'officers and members undertoo as part of their strie activities effectively blocedthe free ingress to and egress from $3IMC40s premises, thus preventing non2striing employees and company vehicles from entering the $3IMC4 compound. Inthis manner, the piceters violated 'rticle /@7e of the "abor Code and tainted thestrie with illegality. &'2C 'ndustries, 'n%. vs. &'2C 'ndustries Labor

Asso%iation &'LA5, et al., G.R. No. 1(!3!, August 11, !1!.

)nion; eligibility of confidential employees to %oin. Confidential employees are

defined as those who - assist or act in a confidential capacity, / to persons whoformulate, determine, and effectuate management policies in the field of laborrelations. The two criteria are cumulative, and both must be met if an employee isto be considered a confidential employee that is, the confidential relationshipmust e6ist between the employee and his supervisor, and the supervisor musthandle the prescribed responsibilities relating to labor relations.In the present case,there is no showing that the secretaries5clers and checers assisted or acted in aconfidential capacity to managerial employees and obtained confidential
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information relating to labor relations policies. 'nd even assuming that they hade6posure to internal business operations of the company, as respondent claims, thisis notper se ground for their e6clusion in the bargaining unit of the ran2and2fileemployees. +unay na &ag>a>aisa ng 2anggaga?a sa Asia #re?ery vs. Asia#re?ery, 'n%., G.R. No. 16!), August 3, !1!.

)nion; liability for invalid strie. The effects of illegal stries, outlined in 'rticle /@7of the "abor Code, mae a distinction between participating worers and unionofficers. The services of an ordinary striing worer cannot be terminated for mereparticipation in an illegal strie; proof must be adduced showing that he or shecommitted illegal acts during the strie. The services of a participating union officer,on the other hand, may be terminated, not only when he actually commits an illegalact during a strie, but also if he nowingly participates in an illegal strie. &'2C'ndustries, 'n%. vs. &'2C 'ndustries Labor Asso%iation &'LA5, et al., G.R. No.1(!3!, August 11, !1!.

)nion shop; effect of merger. 'll employees in the bargaining unit covered by a)nion Shop Clause in their C&' with management are sub%ect to its terms. 3owever,under law and %urisprudence, the following inds of employees are e6empted fromits coverage, namely, - employees who at the time the union shop agreementtaes effect are bona fide members of a religious organi1ation which prohibits itsmembers from %oining labor unions on religious grounds; / employees already inthe service and already members of a union other than the ma%ority at the time theunion shop agreement too effect; = confidential employees who are e6cludedfrom the ran and file bargaining unit; and 7 employees e6cluded from the unionshop by e6press terms of the agreement. In the absence of any of these recogni1ede6ceptions, there is no basis to conclude that the terms and conditions ofemployment under a valid C&' in force in the surviving corporation should not bemade to apply to the absorbed employees. #an> o t$e &$ilippine 'slands vs. #&'Employees /nionB


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representation for the respondents should produce no legal effect. The Courtaffirmed the ruling of the C' that the cited technical infirmity cannot defeat therespondents0 preferred right to security of tenure, without pre%udice to whateveraction may be taen against the representative, if he had indeed been engaged inthe unauthori1ed practice of law. 7pi% n 7pan 7ervi%es Corp. vs. Gloria &a0e, et al.,G.R. No. 1(4!4, August ), !1!.

!"#C; factual findings. (indings of fact of the !"#C, affirming those of the "', areentitled to great weight and will not be disturbed if they are supported bysubstantial evidence. The C' had overstepped its legal mandate by reversing thefindings of fact of the "' and the !"#C as it appears that both decisions were basedon substantial evidence. There is no proof of arbitrariness or abuse of discretion inthe process by which each body arrived at its own conclusions. Thus, the C' shouldhave deferred to such speciali1ed agencies that are considered e6perts in matterswithin their %urisdictions. &$arma%ia and /p0o$n, 'n%., et al. vs. Ri%ardo &. Albayda,

r., G.R. No. 1((4, August 3, !1!.

!"#C; review of decisions. The power of the Court of 'ppeals to review !"#Cdecisions via #ule @A or $etition for Certiorari has been settled as early as in ourdecision in 7t. 2artin Funeral ome v. National Labor Relations Commission . ThisCourt held that the proper vehicle for such review was a Special Civil 'ction forCertiorari under #ule @A of the #ules of Court, and that this action should be filed inthe Court of 'ppeals in strict observance of the doctrine of the hierarchy of courts.Moreover, it is already settled that under Sec. ? of &.$. -/?, as amended, the Courtof 'ppeals pursuant to the e6ercise of its original %urisdiction over $etitions forCertiorari is specifically given the power to pass upon the evidence, if and whennecessary, to resolve factual issues. &i%op Resour%es 'n%orporated &R'5 vs.

Ana%leto L. +aDe%a, et al., G.R. No. 16!, August *, !1!.

$leading verification. The lac of a verification in a pleading is only a formal defect,not a %urisdictional defect, and is not necessarily fatal to a case. The primary reasonfor re*uiring a verification is simply to ensure that the allegations in the pleadingare done in good faith, are true and correct, and are not mere speculations. 'spreviously e6plained in +orres v. 7pe%ialied &a%>aging


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#ule 7A; review of factual findings. 's a general rule, only *uestions of law may beraised in petitions for certiorari under #ule 7A of the #ules of Court. 3owever, thereare recogni1ed e6ceptions to the rule. 'mong the e6ceptions are when the findingsof fact are conflicting and when the findings are conclusions without citation ofspecific evidence on which they are based. In the present case, the findings of factof the Court of 'ppeals conflict with the findings of fact of the !"#C and the "abor

'rbiter. 'lso, the finding of the Court of 'ppeals that :urango engaged in a fistfightis a conclusion without citation of specific evidence on which it is based. Ale"Gurango vs. #est C$emi%als and &lasti%, 'n%., et al., G.R. No. 1(4)*3, August ), !1!.

J!" 2010

Labor Law

'ssumption of %urisdiction by Secretary of "abor; authority to decide on legality ofdismissals arising from strie. The assumption of %urisdiction powers granted to the

"abor Secretary under 'rticle /@=g is not limited to the grounds cited in the noticeof strie or locout that may have preceded the strie or locout; nor is it limited tothe incidents of the strie or locout that in the meanwhile may have taen place.'s the term assume %urisdiction< connotes, the intent of the law is to give the"abor Secretary full authority to resolve all matters within the dispute that gave riseto or which arose out of the strie or locout, including cases over which the laborarbiter has e6clusive %urisdiction.

In the present case, what the "abor Secretary refused to rule upon was thedismissal from employment of employees who violated the return to wor order andparticipated in illegal acts during a strie. This was an issue that arose from thestrie and was, in fact, submitted to the "abor Secretary, through the union0s

motion for the issuance of an order for immediate reinstatement of the dismissedofficers and the company0s opposition to the motion. The dismissal issue wasproperly brought before the "abor Secretary and he was mistaen in ruling that thematter is legally within the e6clusive %urisdiction of the labor arbiter to decide.#agong &ag>a>aisa ng 2anggaga?a ng +riump$ 'nternational, et al. vs. 7e%retaryo a>aisa ng 2anggaga?a ng +riump$ 'nternational, et al., G.R. No.16(4!1, uly ), !1!.

&argaining deadloc; award; findings of Secretary of "abor. )nless there is a clearshowing of grave abuse of discretion, the Court cannot, and will not, interfere withthe e6pertise of the Secretary of "abor. The award granted by the "abor Secretary

in resolving the bargaining deadloc, drawn as they were from a close e6aminationof the submissions of the parties, do not indicate any legal error, much less anygrave abuse of discretion, and should not be disturbed. #agong &ag>a>aisa ng2anggaga?a ng +riump$ 'nternational, et al. vs. 7e%retary o a>aisang 2anggaga?a ng +riump$ 'nternational, et al., G.R. No. 16(4!1, uly ), !1!.

Dismissal of employees; %ust cause. Theft committed by an employee is a validreason for his dismissal by the employer. 'lthough as a rule this Court leans overbacwards to help worers and employees continue with their employment or tomitigate the penalties imposed on them, acts of dishonesty in the handling ofcompany property, petitioner0s income in this case, are a different matter. 2aribago

#lue?ater #ea%$ Resort, 'n%. vs. Nito


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substantive aspect. Ere%tor Advertising 7ign Group, 'n%. and Ar%$ imy C. Amorotovs. E"pedito Cloma, G.R. No. 16(1, uly , !1!.

Dismissal of employees; procedural due process. (urnishing the employee with asuspension order prior to his notice of termination does not satisfy the re*uirementof a first notice. It implies that the employer has already decided, for the reasons

stated therein, to suspend the employee from wor in the company, and thewording of the order in the present case gives no indication that the employee isbeing given an opportunity to submit his defense or e6planation. Ere%tor

Advertising 7ign Group, 'n%. and Ar%$ imy C. Amoroto vs. E"pedito Cloma, G.R. No.16(1, uly , !1!.

Dismissal of employees; procedural due process. In order to validly dismiss anemployee, he must be accorded both substantive and procedural due process bythe employer. $rocedural due process re*uires that the employee be given a noticeof the charge against him, an ample opportunity to be heard, and a notice oftermination. >ven if the aforesaid procedure is conducted after the filing of theillegal dismissal case, the legality of the dismissal, as to its procedural aspect, willbe upheld provided that the employer is able to show that compliance with thesere*uirements was not a mere afterthought. Ne? &uerto Commer%ial and Ri%$ardLim vs. Rodel Lope and Feli" Gavan, G.R. No. 16****, uly 6, !1!.

>mployee benefits; -=th month pay; definition of basic salary. The term basicsalary< of an employee for the purpose of computing the thirteenth2month pay wasinterpreted to include all remuneration or earnings paid by the employer forservices rendered, but does not include allowances and monetary benefits whichare not integrated as part of the regular or basic salary, such as the cash e*uivalentof unused vacation and sic leave credits, overtime, premium, night differential andholiday pay, and cost2of2living allowances. 3owever, these salary2related benefits

should be included as part of the basic salary in the computation of the thirteenth2month pay if, by individual or collective agreement, company practice or policy, thesame are treated as part of the basic salary of the employees. Central Au%arera 6change Services '($C>S is a government agency performing proprietary
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functions. &y clear implication of law, all '($C>S personnel should therefore beclassified as government employees and any complaint for illegal dismissalinvolving such employees should be filed with the CSC and not the !"#C. Such factcannot be negated by the failure of '($C>S to follow appropriate civil service rulesin the hiring, appointment, discipline and dismissal of employees. !either can it bedenied by the fact that '($C>S chose to enroll its employees in the SSS instead of

the :SIS. Such considerations cannot be used against the CSC to deprive it of its%urisdiction. 3ence, the "abor 'rbiter0s decision in the illegal dismissal case filed by'($C>S employees is a total nullity for having been rendered without %urisdiction.2agdalena idalgo, et al. vs. Republi% o t$e &$ilippines, G.R. No. 1(*(*3, uly ), !1!.

>mployer2employee relationship; evidence. 'ny doubt arising from the evaluation ofevidence as between the employer and the employee must be resolved in favor ofthe latter. It is settled %urisprudence that the burden of proving payment ofmonetary claims rests on the employer. It was entirely within the company0s powerto present personnel files, payrolls, remittances, and other similar documents whichwould have proven payment of respondent0s money claims as these documentsshould necessarily be in its possession; hence, failure to present such evidencemust be taen against it.


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courts should not use that one act to conclude that an employee was constructivelydismissed when substantial evidence proves otherwise. In this case, substantialevidence proves that $ulgar was not constructively dismissed, and that he hadabandoned his duties in order to avoid an investigation being conducted by hisemployer. &$ilippine Rural Re%onstru%tion vs. -irgilio &ulgar, G.R. No. 16*(. uly), !1!.

Illegal dismissal; misrepresentation of cause is an act of bad faith. The complainant,#io #emo, was dismissed from service on the ground of retrenchment. 3owever, therecords show that Sentinel hired a replacement soon after #emo0s dismissal,proving that Sentinel0s financial distress was not as serious as it claimed, and thatretrenchment was not the real reason for #emo0s dismissal. Sentinel concealed itstrue intention and committed misrepresentation when it claimed that #emo0sdismissal was due to serious financial losses. This act of misrepresentation is an actof active bad faith that fatally tainted #emo0s dismissal and rendered it illegal.7entinel 'ntegrated 7ervi%es, 'n%. vs. Rio ose Remo, G.R. No. 13, uly ), !1!.

Illegal dismissal; relief available to employee. 'n illegally dismissed employee isentitled to reinstatement without loss of seniority rights and other privileges and tofull bacwages, inclusive of allowances, and to her other benefits or their monetarye*uivalent, computed from the time the compensation was withheld up to the timeof actual reinstatement. 8here reinstatement is no longer feasible, separation paye*uivalent to at least one month salary or one month salary for every year ofservice, whichever is higher, a fraction of at least si6 months being considered asone whole year, should be awarded to respondent. 'n award for moral ande6emplary damages cannot be %ustified unless the employer had acted in bad faith.

The award of moral and e6emplary damages cannot be %ustified solely upon thepremise that the employer dismissed his employee without authori1ed cause anddue process. Lambert &a?nbro>ers and e?elry %orporation and Lambert Lim vs.elen #inamira, G.R. No. 1(!464. uly 1, !1!.

"abor2only contracting. Despite the fact that the service contracts containstipulations which are earmars of independent contractorship, they do not mae itlegally so. The language of a contract is neither determinative nor conclusive of therelationship between the parties. The parties cannot dictate, by a declaration in acontract, the character of the contractor0s business as a labor2only contractor or alegitimate %ob contractor, which should be determined by the criteria set by statute.3ere, a closer loo at 'M$C40s actual status and participation regarding theemployment of the complainants clearly belie the contents of the written servicecontract. 7an 2iguel Corporation vs. -i%ente 7emillan, et al., G.R. No. 164)(, uly), !1!.

"abor2only contracting; evidence. ' Certificate of #egistration as an IndependentContractor is not conclusive evidence of such status. In distinguishing betweenpermissible %ob contracting and prohibited labor2only contracting, the totality of thefacts and the surrounding circumstances of the case are to be considered. 7an2iguel Corporation vs. -i%ente 7emillan, et al., G.R. No. 164)(, uly ), !1!.

"iability of officers for illegal dismissal. Corporate officers are only solidarily liablewith the corporation for the illegal termination of services of employees if theyacted with malice or bad faith. In &$ilippine Ameri%an Lie and General 'nsuran%e v.Grama0e,bad faith is defined as a stateof mind affirmatively operating with furtivedesign or with some motive of self2interest or ill will or for ulterior purpose. It

implies a conscious and intentional design to do a wrongful act for a dishonestpurpose or moral obli*uity. The lac of authori1ed or %ust cause to terminate one0semployment and the failure to observe due process do not ipso a%tomean that thecorporate officer acted with malice or bad faith. There must be independent proofof malice or bad faith which is lacing in the present case. Lambert &a?nbro>ersand e?elry %orporation and Lambert Lim vs. elen #inamira, G.R. No. 1(!464. uly1, !1!.
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$reventive suspension. $reventive suspension is %ustified where the employee0scontinued employment poses a serious and imminent threat to the life or propertyof the employer or of the employee0s co2worers. 8ithout this ind of threat,preventive suspension is not proper. ose &. Artii%io vs. National Labor RelationsCommission, R& Guardians 7e%urity Agen%y, 'n%. uan -i%tor . Laurilla, Alberto

Aguirre, and Antonio A. Andres, G.R. No. 1(*, uly 6, !1!

$ublic employees; demotion. There is demotion when an employee is appointed to aposition that results in a diminution in duties, responsibilities, status or ran whichmay or may not involve a reduction in salary. 8here an employee is appointed to aposition with the same duties and responsibilities with a ran and salary higher thanthose he en%oyed in his previous position, there is no demotion and the appointmentis valid. -irginia , G.R. No.111(, uly 6, !1!.
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#etrenchment; definition; re*uisites. #etrenchment is the termination ofemployment initiated by the employer through no fault of and without pre%udice tothe employees. It is resorted to during periods of business recession, industrialdepression, seasonal fluctuations, or during lulls occasioned by lac of orders,shortage of materials, conversion of the plant to a new production program, orautomation. It is a management prerogative resorted to avoid or minimi1e business

losses.

To effect a valid retrenchment, the following elements must be present+ - theretrenchment is reasonably necessary and liely to prevent business losses which, ifalready incurred, are not merely de minimis, but substantial, serious and real, oronly if e6pected, are reasonably imminent as perceived ob%ectively and in goodfaith by the employer; / the employer serves written notice both to theemployee5s concerned and the D4"> at least one month before the intended date ofretrenchment; = the employer pays the retrenched employee separation pay in anamount prescribed by law; 7 the employer e6ercises its prerogative to retrench ingood faith; and A the employer uses fair and reasonable criteria in ascertainingwho would be retrenched or retained. Lambert &a?nbro>ers and e?elry%orporation and Lambert Lim vs. elen #inamira, G.R. No. 1(!464. uly 1, !1!

#etrenchment; decrease in income is not business loss. ' sharp drop in incomefrom $-million to only $@@A,FFF.FF is not the ind of business losses contemplatedby the "abor Code that would %ustify a valid retrenchment. ' mere decline in grossincome cannot in any manner be considered as serious business losses. It should besubstantial, sustained and real. Lambert &a?nbro>ers and e?elry %orporation andLambert Lim vs. elen #inamira, G.R. No. 1(!464. uly 1, !1!.

Separation pay; as e*uitable relief. 3aving determined that the imposition ofpreventive suspension was proper and that the complainant was not illegally

dismissed, the Court found no basis to grant bacwages. 3owever, given theattendant circumstances of the case H that complainant had been woring with thecompany for a period of si6teen -@ years without any previous derogatory record the Court held that the ends of social and compassionate %ustice would be served ifthe employee is given some e*uitable relief in the form of separation pay. ose &.

Artii%io vs. National Labor Relations Commission, R& Guardians 7e%urity Agen%y,'n%. uan vi%tor . Laurilla, Alberto Aguirre, and Antonio A. Andres, G.R. No. 1(*,

uly 6, !1!

LABOR PROCEDURE

Burisdiction; intra2union disputes. Section //@ of the "abor Code clearly provides

that the &"# and the #egional Directors of D4"> have concurrent %urisdiction overinter2union and intra2union disputes. Such disputes include the conduct ornullification of election of union and worers0 association officers. There is, thus, nodoubt as to the &"#0s %urisdiction over the instant dispute involving member2unionsof a federation arising from disagreement over the provisions of the federation0sconstitution and by2laws. Atty. Allan 7. 2ontaDo vs. Atty Ernesto C. -er%eles, G.R.No. 16)3, uly 6, !1!.

"abor tribunal; factual finding. 's a rule, a petition for certiorari under #ule @A isvalid only when the *uestion involved is an error of %urisdiction, or when there isgrave abuse of discretion amounting to lac or e6cess of %urisdiction on the part ofthe court or tribunals e6ercising *uasi2%udicial functions. 3ence, courts e6ercising

certiorari %urisdiction should refrain from reviewing factual assessments of therespondent court or agency. 4ccasionally, however, they are constrained to wadeinto factual matters when the evidence on record does not support those factualfindings; or when too much is concluded, inferred or deduced from the bare orincomplete facts appearing on record. The C' rightfully reviewed the correctness ofthe labor tribunals0 factual findings not only because of the foregoing inade*uacies,but also because the !"#C and the "abor 'rbiter came up with conflicting findings.
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Lambert &a?nbro>ers and e?elry %orporation and Lambert Lim vs. elen #inamira,G.R. No. 1(!464. uly 1, !1!.

Money claims; effect of failure to include in prayer for relief. The rule is well2settledthat points of law, theories, issues and arguments not ade*uately brought to theattention of the trial court need not be, and ordinarily will not be considered by a

reviewing court as they cannot be raised for the first time on appeal because thiswould be offensive to the basic rules of fair play, %ustice and due process. Thoughthere is nothing on record which would show that the amount of $/FE,@?= has beenreturned to $##M, a perusal of the pleadings show that $##M failed to include thereturn of such amount in its prayer for relief. 3ence, the "abor 'rbiter cannot act onthe same. ' prayer for a monetary award should have been raised at the earliestopportunity before the "abor 'rbiter. $hilippine #ural #econstruction vs. Girgilio$ulgar, G.R. No. 16*(. uly ), !1!.

!"#C #ules of $rocedure; certificate of non2forum shopping. The filing of acertificate of non2forum shopping is mandatory in initiatory pleadings; non2compliance with the re*uired certification is fatal. The filing of the same is notwaived by the other party0s failure to immediately assert the defect, and neither isit cured by its belated submission on the ground that the party was not in any wayguilty of actual forum shopping. In cases where the Court tolerated the deficiency,special circumstances or compelling reasons made the strict application un%ustified.In this case, however, the petitioners offered no valid %ustification for their failure tocomply with the Circular. 2andaue Galleon +rade, 'n%., et al. vs. #ienvenido 'sidto,et al., G.R. No. 11!)1, uly ), !1!.

#ule 7A; when review of facts allowed. 's a rule, a petition for review under #ule 7Aof the #ules of Court must raise only *uestions of law. 3owever, the rule hase6ceptions such as when the findings of the "abor 'rbiter, !"#C and Court of

'ppeals vary, as in this case. 2aribago #lue?ater #ea%$ Resort, 'n%. vs. Nito


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or a diminution of pay. It e6ists when an act of clear discrimination, insensibility ordisdain by an employer has become so unbearable to the employee leaving himwith no option but to forego with his continued employment.

3ere, there was no diminution of petitioner0s salary and other benefits. There wasno evidence that she was harassed or discriminated upon, or that respondents

made it difficult for her to continue with her other duties. 'bsent any evidence ofbad faith, it is within the e6ercise of respondents0 management prerogative totransfer some of petitioner0s duties, if, in their %udgment, this would be morebeneficial to the corporation. Estrella -elas%o vs. +ransit Automotive 7upply, 'n%.and Antonio de ' standard employment contract would be nullified. 3owever, in thepresent case, the absence of a post2employment medical e6amination cannot beused to defeat respondent0s claim since the failure to sub%ect the seafarer to thisre*uirement was not due to the seafarer0s fault but to the inadvertence ordeliberate refusal of petitioners. 'nterorient 2aritime Enterprises, 'n%. et al. v.Leonora 7. Remo, G.R. No. 1111, une *, !1!.

Dismissal; breach of trust; lac of loss not a defense. The acts of the employeerevealed a mind that was willing to disregard ban rules and regulations when otherbranch officers concurred. 3er defense that the ban suffered no loss is of nomoment. The focal point is that she betrayed the trust of the ban. 3ence, the banrightfully terminated the services of the employee for willful breach of the trust thatit reposed in her. Luviminda A. Ang vs. &$ilippine National #an>, G.R. No. 1((6,

une 16, !1!.
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Dismissal; burden of proof. In termination cases, the burden of proof rests upon theemployer to show that the dismissal of the employee is for %ust cause and failure todo so would mean that the dismissal is not %ustified. This is in consonance with theguarantee of security of tenure in the Constitution, and elaborated in the "aborCode. ' dismissed employee is not re*uired to prove his innocence to the chargesleveled against him by his employer. The determination of the e6istence and

sufficiency of a %ust cause must be e6ercised with fairness and in good faith andafter observing due process. Lima Land, 'n%., Leandro avier, 7ylvia


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personnel, insofar as the application of the doctrine of loss of trust and confidenceis concerned. Thus, with respect to ran2and2file personnel, loss of trust andconfidence, as ground for valid dismissal, re*uires proof of involvement in thealleged events in *uestion, and that mere uncorroborated assertions andaccusations by the employer will not be sufficient. &ut as regards a managerialemployee, the mere e6istence of a basis for believing that such employee has

breached the trust of his employer would suffice for his dismissal. 3ence, in thecase of managerial employees, proof beyond reasonable doubt is not re*uired, itbeing sufficient that there is some basis for such loss of confidence, such as whenthe employer has reasonable ground to believe that the employee concerned isresponsible for the purported misconduct, and the nature of his participation thereinrenders him unworthy of the trust and confidence demanded of his position. LimaLand, 'n%., Leandro avier, 7ylvia ot$e &$ilippine 'slands and #&' Family #an> vs. on. National Labor RelationsCommission 1st mployee benefit; total disability construed. It has been held that disability isintimately related to one0s earning capacity. It should be understood less on itsmedical significance but more on the loss of earning capacity. Total disability doesnot mean absolute helplessness. In disability compensation, it is not the in%ury,which is compensated, but rather the incapacity to wor resulting in the impairmentof one0s earning capacity. Thus, permanent disability is the inability of a worer toperform his %ob for more than -/F days, regardless of whether or not he loses the

use of any part of his body. riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol,G.R. No. 16*, une *, !1!.

>mployer2>mployee #elationship; agents of insurance companies; e6ception to theInsular case; 4ur ruling in the first 'nsular %ase J'nsular 'nsuran%e v. NLRC, 1(*7CRA 4)*Kcase did not foreclose the possibility of an insurance agent becoming anemployee of an insurance company; if evidence e6ists showing that the companypromulgated rules or regulations that effectively controlled or restricted an
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insurance agent0s choice of methods or the methods themselves in sellinginsurance, an employer2employee relationship would be present. The e6istence ofan employer2employee relationship is thus determined on a case2to2case basisdepending on the evidence on record. Gregorio -. +ong>o v. +$e 2anua%turers Lie'nsuran%e Co. &$ils5 and Renato A. -ergel , G.R.No. 1((6, une 16, !1!.

!ature of employer; privati1ation no defense; continuity of offense.The offense forwhich petitioner was removed too place when the government still owned $!& andshe was then a government employee. &ut while $!& began as a governmentcorporation, it did not mean that its corporate being ceased and was subse*uentlyreestablished when it was privati1ed. It remained the same corporate entity before,during, and after the change over with no brea in its life as a corporation.Conse*uently, the offenses that were committed against the ban before its

privati1ation continued to be offenses against the ban after the privati1ation.Luviminda A. Ang vs. &$ilippine National #an>, G.R. No. 1((6, une 16, !1!.

$rescription of labor claims; overseas contract worers. The employment ofseafarers, including claims for death benefits, is governed by the contracts theysign every time they are hired or rehired; and as long as the stipulations therein arenot contrary to law, morals, public order or public policy, they have the force of lawbetween the parties.

In Cadalin v. &EAs Administrator/= SC#' E/-, E@7J we held that 'rticle /?- ofthe "abor Code covers all money claims from employer2employee relationship. Itis not limited to money claims recoverable under the "abor Code, but applies also to

claims of overseas contract worers


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the contract is not contrary to law, public order, public policy, morals or goodcustoms, or pre%udicial to a third person with a right recogni1ed by law.

Courts have stepped in to annul *uestionable transactions, especially where there isclear proof that a waiver, for instance, was obtained from an unsuspecting or agullible person; or where the agreement or settlement was unconscionable on its

face. ' *uitclaim is ineffective in barring recovery of the full measure of a worer0srights, and the acceptance of benefits therefrom does not amount to estoppel.Moreover, a *uitclaim in which the consideration is scandalously low and ine*uitablecannot be an obstacle to the pursuit of a worer0s legitimate claim. 'nterorient2aritime Enterprises, 'n%. et al. v. Leonora 7. Remo, G.R. No. 1111, une *, !1!.

#etirement benefits; does not include allowances. >6ecutive 4rder !o. EA@temporary measure; statutory construction. Section @ of >6ecutive 4rder !o. EA@>.4. [email protected]@ was clearly meant as an incentive for employees who retire, resign or areseparated from service during or as a conse*uence of the reorgani1ation. 's atemporary measure, it cannot be interpreted as an e6ception to the generalprohibition against separate or supplementary insurance and5or retirement orpension plans under C.'. -@, as amended.

In reconciling >.4. EA@ with C.'.-@, as amended, uppermost in the mind of theCourt is the fact that the best method of interpretation is that which maes lawsconsistent with other laws which are to be harmoni1ed rather than having one

considered repealed in favor of the other. &$ilippine 'nternational +radingCorporation vs. Commission on Audit, G.R. No. 13)1(, une , !1!.

#esignation; burden of proof. The rule in termination cases is that the employerbears the burden of proving that he dismissed his employee for a %ust cause. 'nd,when the employer claims that the employee resigned from wor, the burden is onthe employer to prove that he did so willingly. 8hether that is the case wouldlargely depend on the circumstances surrounding such alleged resignation. Thosecircumstances must be consistent with the employee0s intent to give up wor. Elsa7. 2aliBon v. E=uitable General 7ervi%es 'n%., G.R. No. 1)6*, une *, !1!.

Solidary liability of employers; proof of bad faith. &ased on 2A2 Realty


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becomes the law of the case upon subse*uent appeal. 4SCI0s application of the lawof the case principle to the instant case, as regards the remand of the case to the"abor 'rbiter for clarificatory hearings, is misplaced. The only matter settled in the

Buly =F, -??? !"#C Decision, which can be regarded as law of the case, was theundisputed fact that &astol was suffering from a heart ailment. 's it is, the issue onthe degree of disability of &astol0s heart ailment and his entitlement to disability

indemnity, as viewed by the !"#C through said decision, has yet to be resolved.(or this reason, the !"#C remanded the case to "abor 'rbiter Mayor, Br. forconduct of further appropriate proceedings and to terminate the same withdispatch. riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol, G.R. No. 16*,

une *, !1!.

Budgment; res %udicata; nature and applicability. The nature of res 0udi%ata, as nowembodied in Sec. 7E, #ule =? of the #ules of Court, has two concepts, which are ibar by former %udgment and ii conclusiveness of %udgment. These concepts of thedoctrine of res 0udi%ataare applicable to second actions involving substantially thesame parties, the same sub%ect matter, and cause or causes of action. In the instantcase, there is no second action to spea of. riental 7$ip 2anagement Co., 'n%. vs.Romy #. #astol, G.R. No. 16*, une *, !1!.

$rocedure; certificate of non2forum shopping; pro2forma complaints. (or thee6peditious and ine6pensive filing of complaints by employees, the #egional'rbitration &ranch #'&


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that the affiant has read the pleading and that the allegations therein are true andcorrect of his personal nowledge or based on authentic records.< 4n the otherhand, the actual verification of counsel states+ That I am the counsel of record forthe complainant in the above2entitled case; that I caused the preparation of theforegoing $osition $aper; that I have read and understood the contents thereof; andthat I confirm that all the allegations therein contained are true and correct based

on recorded evidence.< riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol, :.#.!o. -@/?, Bune /?, /F-F.

$rocedure; late filing of position paper, and filing of prohibited pleading. Therela6ation of rules of technical procedure in the hearing of labor disputes shall notbe applicable in case counsel fails to file a position paper before the "abor 'rbiternot %ust once but twice. 3is situation was compounded when he filed a motion torecall order of dismissal, a prohibited pleading, albeit gratuitously glossed over bythe "abor 'rbiter, which treated it as an appeal; and when he belatedly paid theappeal fee.

Moreover, not having learned his lesson, petitioner0s counsel filed a motion forreconsideration of the !"#C dismissal of his appeal, which is also prohibited, insteadof interposing an appeal before the Court of 'ppeals. Said motion forreconsideration not having tolled the running of the reglementary period for thefiling of a petition for certiorari under #ule @A, petitioner0s petition before theappellate court was filed out of time three months late. Luis 2. Rivera vs. &arentsB+ea%$ers Community Asso%iation and Easter ;ase, G.R. No. 11)3, une *, !1!.

$rocedure; late submission of documentary evidence allowed. The nature of theproceedings before the "abor 'rbiter is not only non2litigious and summary, but the"abor 'rbiter is also given great leeway to resolve the case; thus, he may availhimself of all reasonable means to ascertain the facts of the controversy.< The

belated submission of additional documentary evidence by respondent after thecase was already submitted for decision did not mae the proceedings before the"abor 'rbiter improper. The basic reason is that technical rules of procedure arenot binding in labor cases. riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol,G.R. No. 16*, une *, !1!.

$rocedure; *uantum of evidence on appeal; substantial evidence. In administrativeproceedings, the *uantum of proof re*uired is substantial evidence, which is morethan a mere scintilla of evidence, but such amount of relevant evidence which areasonable mind might accept as ade*uate to %ustify a conclusion. The Court of'ppeals may review the factual findings of the !"#C and reverse its ruling if it findsthat the decision of the !"#C lacs substantial basis. Estrella -elas%o vs. +ransit

Automotive 7upply, 'n%. and Antonio de


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bacwages and reinstatement or payment of separation pay in lieu thereof. Thus,an illegally dismissed employee is entitled to two reliefs+ bacwages andreinstatement. The two reliefs provided are separate and distinct. Golden A%e#uilders and Arnold/. Aur vs. ose A. +alde, G.R. No. 1(!!, 2ay ), !1!.

Illegal dismissal; doctrine of strained relations. )nder the do%trine o strained

relations, the payment of separation pay is considered an acceptable alternative toreinstatement when the latter option is no longer desirable or viable. 4n one hand,such payment liberates the employee from what could be a highly oppressive worenvironment. 4n the other hand, it releases the employer from the grosslyunpalatable obligation of maintaining in its employ a worer it could no longer trust.

Strained relations must be demonstrated as a fact, however, to be ade*uatelysupported by evidenceH substantial evidence to show that the relationshipbetween the employer and the employee is indeed strained as a necessaryconse*uence of the %udicial controversy.

In the present case, the "abor 'rbiter found that actual animosity e6isted betweenpetitioner '1ul and respondent as a result of the filing of the illegal dismissal case.Such finding, especially when affirmed by the appellate court as in the case at bar,is binding upon the Court, consistent with the prevailing rules that the Court will nottry facts anew and that findings of facts of *uasi2%udicial bodies are accorded greatrespect, even finality. Golden A%e #uilders and Arnold/. Aul vs. ose A. +alde, G.R.No. 1(!!, 2ay ), !1!.

Illegal dismissal; separation pay. In instances where reinstatement is no longerfeasible because of strained relations between the employee and the employer,separation pay is granted. In effect, an illegally dismissed employee is entitled toeither reinstatement, if viable, or separation pay if reinstatement is no longer

viable, and bacwages. The normal conse*uences of respondents0 illegal dismissal,then, are reinstatement without loss of seniority rights, and payment of bacwagescomputed from the time compensation was withheld up to the date of actualreinstatement. 8here reinstatement is no longer viable as an option, separationpay e*uivalent to one - month salary for every year of service should be awardedas an alternative. The payment of separation pay is in addition to payment ofbacwages.

The accepted doctrine is that separation pay may avail in lieu of reinstatement ifreinstatement is no longer practical or in the best interest of the parties. Separationpay in lieu of reinstatement may liewise be awarded if the employee decides not tobe reinstated. Golden A%e #uilders and Arnold /. Aur vs. ose A. +alde, G.R. No.

1(!!, 2ay ), !1!.

Labor %rocedre

Budgment; final and e6ecutory. The "abor 'rbiter0s decision has long become finaland e6ecutory and it can no longer be reversed or modified. !othing is more settledin law than when a final %udgment becomes e6ecutory, it thereby becomesimmutable and unalterable. The %udgment may no longer be modified in anyrespect, even if the modification is meant to correct what is perceived to be anerroneous conclusion of law or fact, and regardless of whether the modification isattempted to be made by the court rendering it or by the highest court of the land.

The only recogni1ed e6ception are the correction of clerical errors or the maing of

so2called nun% pro tun% entries which cause no in%ury to any party, and, of course,where the %udgment is void.

4nce a %udgment becomes final and e6ecutory, the prevailing party should not bedenied the fruits of his victory by some subterfuge devised by the losing party.(inal and e6ecutory %udgments can neither be amended nor altered e6cept forcorrection of clerical errors, even if the purpose is to correct erroneous conclusionsof fact or of law. Trial and e6ecution proceedings constitute one whole action or suit
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such that a case in which e6ecution has been issued is regarded as still pending sothat all proceedings in the e6ecution are proceedings in the suit.

It is no longer legally feasible to modify the final ruling in this case through thee6pediency of a petition *uestioning the order of e6ecution. Budgments of courtsshould attain finality at some point lest there be no end in litigation. The final

%udgment in this case may no longer be reviewed, or in any way modified directly orindirectly, by a higher court, not even by the Supreme Court. The reason for this isthat, litigation must end and terminate sometime and somewhere, and it isessential to an effective and efficient administration of %ustice that, once a %udgmenthas become final, the winning party be not deprived of the fruits of the verdict.Courts must guard against any scheme calculated to bring about that result andmust frown upon any attempt to prolong controversies. 2armosy +rading, 'n%. and-i%tor 2orales vs. Court o Appeals, et al., G.R. No. 1(!)1), 2ay 6, !1!.

APRIL 2010

Labor Law

Dismissal; bacwages. 'rticle /E? of the "abor Code provides that an employeewho is un%ustly dismissed from wor shall be entitled to reinstatement without lossof seniority rights and other privileges and to his full bacwages, inclusive ofallowances, and to his other benefits or their monetary e*uivalent computed fromthe time his compensation was withheld from him up to the time of his actualreinstatement. Corporation vs. National Labor Relations Commission, etal., G.R. No. 16)*)1, 2ar%$ 3!, !1!.

Cost of living allowance. C4"' is not in the nature of an allowance intended toreimburse e6penses incurred by officials and employees of the government in theperformance of their official functions. It is not payment in consideration of thefulfillment of official duty. 's defined, cost of living refers to the level of pricesrelating to a range of everyday items< or the cost of purchasing those goods andservices which are included in an accepted standard level of consumption.< &ased

on this premise, C4"' is a benefit intended to cover increases in the cost of living.Thus, it is and should be integrated into the standardi1ed salary rates.

In the present case, the Court is not persuaded that the continued grant of C4"' tothe uniformed personnel to the e6clusion of other national government officials runafoul the e*ual protection clause of the Constitution. The fundamental right ofe*ual protection of the laws is not absolute, but is sub%ect to reasonableclassification. If the groupings are characteri1ed by substantial distinctions that
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mae real differences, one class may be treated and regulated differently fromanother. The classification must also be germane to the purpose of the law andmust apply to all those belonging to the same class.

The Court found valid reasons to treat the uniformed personnel differently fromother national government officials. &eing in charge of the actual defense of the

State and the maintenance of internal peace and order, they are e6pected to bestationed virtually anywhere in the country. They are liely to be assigned to avariety of low, moderate, and high2cost areas. Since their basic pay does not varybased on location, the continued grant of C4"' is intended to help them offset theeffects of living in higher cost areas. -i%toria C. Gutierre, et al. vs.


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sufficiently e6plain her basis in concluding that the respondent0s illness was notwor2related+ she found the respondent not to have been e6posed to anycarcinogenic fumes, or to any viral infection in his worplace. 3er findings werearrived at after the respondent was made to undergo a physical, neurological andlaboratory e6amination, taing into consideration his past medical history, familyhistory, and social history. In addition, the respondent was evaluated by a

specialist, a surgeon and an oncologist. The series of tests and evaluations showthat Dr. 4ng2Salvador0s findings were not arrived at arbitrarily; neither were theybiased in the company0s favor.

The respondent, on the other hand, did not adduce proof to show a reasonableconnection between his wor as an assistant houseeeping manager and hislymphoma. There was no showing how the demands and nature of his %ob vis2R2visthe ship0s woring conditions increased the ris of contracting lymphoma. The non2wor relatedness of the respondent0s illness is reinforced by the fact that under theImplementing #ules and #egulations of the "abor Code >CC #ules, lymphoma isconsidered occupational only when contracted by operating room personnel due toe6posure to anesthetics. The records do not show that the respondent0s wor as anassistant houseeeping manager e6posed him to anesthetics.

'ccordingly, the Court held that the respondent is not entitled to total andpermanent disability benefits on account of his failure to refute the company2designated physician0s findings that+ - his illness was not wor2related; and / hewas fit to resume sea duties. 2agsaysay 2aritime Corporation and8or Cruise 7$ipsCatering 7ervi%es 'nternational N.-. vs. National Labor Relations Commissions, etal., G.R. No. 161!, 2ar%$ , !1!.

Constructive dismissal. In constructive dismissal cases, the employer has theburden of proving that its conduct and action or the transfer of an employee are for

valid and legitimate grounds such as genuine business necessity. $articularly, for atransfer not to be considered a constructive dismissal, the employer must be able toshow that such transfer is not unreasonable, inconvenient, or pre%udicial to theemployee. (ailure of the employer to overcome this burden of proof taints theemployee0s transfer as a constructive dismissal.

In the present case, the employer failed to discharge this burden. The combinationof harsh actions taen by the ban rendered the employment condition of theemployee hostile and unbearable for the following reasons+ (irst, there is noshowing of any urgency or genuine business necessity to transfer the employee tothe Maati 3ead 4ffice. The ban0s stated reason that the employee had to undergobranch head training because of his gross inefficiency was not supported by any

proof that the employee had a record of gross inefficiency. Second, the employee0stransfer from Dumaguete to Maati City is clearly unreasonable, inconvenient andoppressive, since the respondent and his family are residents of Dumaguete City.

Third, the employer failed to present any valid reason why it had to re*uire theemployee to go to the Maati 3ead 4ffice to undergo branch head training when itcould have %ust easily re*uired the latter to undertae the same training in theGISMI! area. (inally, there was nothing in the order of transfer indicating theposition which the employee would occupy after his training; thus, the employeewas effectively placed in a floating< status. The ban0s contention that theemployee was assigned to a sensitive position in the D)34 Tas (orce is suspectwhen considered with the fact that he was made to undergo branch head trainingwhich is totally different from a position that entails reconciling boo entries of all

branches of the former. #econciling boo entries is essentially an accounting tas.

The test of constructive dismissal is whether a reasonable person in the employee0sposition would have felt compelled to give up his position under the circumstances.&ased on the factual considerations in the present case, the Court held that thehostile and unreasonable woring conditions of the ban %ustified the finding of the!"#C and the C' that the employee was constructively dismissed. &$ilippine
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-eterans #an> vs. National Labor Relations Commission, et al., G.R. No. 1,2ar%$ 3!, !1!.

Disability benefits; entitlement. The seafarer, upon sign2off from his vessel, mustreport to the company2designated physician within three woring days from arrivalfor diagnosis and treatment. 'pplying Section /F&, paragraph = of the /FFF

'mended Standard Terms and Conditions :overning the >mployment of (ilipinoSeafarers on &oard 4cean2:oing Gessels, petitioner is re*uired to undergo post2employment medical e6amination by a company2designated physician within threeworing days from arrival, e6cept when he is physically incapacitated to do so, inwhich case, a written notice to the agency within the same period would suffice.In 2aunlad +ransport, 'n%. v. 2anigo, r., :.#. !o.-@-7-@, -= Bune /FF, AA7 SC#'77@, 7A?J this Court e6plicitly declared that it is mandatory for a claimant to bee6amined by a company2designated physician within three days from hisrepatriation. The une6plained omission of this re*uirement will bar the filing of aclaim for disability benefits. Ale" C. Cootau%o vs. 227 &$il. 2aritime 7ervi%es, 'n%.2s. 2ary C. 2a=uilan, and8or 227 Co. Ltd., G.R. No. 14(, 2ar%$ 1), !1!.

Dismissal; damages. Moral and e6emplary damages are recoverable where thedismissal of an employee was attended by bad faith or fraud or constituted an actoppressive to labor or was done in a manner contrary to morals, good customs orpublic policy. 8ith regard to the employees of $romm2:em, there being noevidence of bad faith, fraud or any oppressive act on the part of the latter, the Courtfound no support for the award of damages.

's for $:, the records show that it dismissed its employees through S'$S in amanner oppressive to labor. The sudden and peremptory barring of the employeesfrom wor, and from admission to the wor place, after %ust a one2day verbal notice,and for no valid cause, bellows oppression and utter disregard of the right to due

process of the concerned petitioners. 3ence, an award of moral damages is calledfor. oeb Aliviado, et al. vs. &ro%ter H Gamble &$ilippines, 'n%., et al., G.R. No.16!)!6, 2ar%$ *, !1!.

Dismissal; fraud and serious misconduct.In this case, the Court found that $astorilwas as actively involved as >scoto and 4mela in the sale of the Toyota Town 'cethat resulted in a loss to the company. 'll three participated in maing thecompany believe that '*uino bought the Toyota Town 'ce for $-?F,FFF.FF when infact, '*uino paid $/FF,FFF.FF for the vehicle. Thus, $astoril acted in concert with>scoto and 4mela in the transaction that defrauded their employer in the amount of$-F,FFF.FF. $astoril prepared and issued the deed of sale indicating that thevehicle was sold for $-?F,FFF.FF, although she new that the buyer was being

charged $/FF,FFF.FF for the vehicle. >scoto, 4mela and $astoril helped themselvesto the price difference and tried to silence #odrigue1 who got wind of the anomalyby giving him $-,FFF.FF and passing the $-F,FFF.FF price difference off as theapproved discount '*uino ased for. The Court held that there was a conspiracybetween and among the three employees, where every participant had madesignificant contributory acts. $ite


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Dismissal; %ust cause; misconduct. Misconduct has been defined as improper orwrong conduct; the transgression of some established and definite rule of action, aforbidden act, a dereliction of duty, unlawful in character implying wrongful intentand not mere error of %udgment. The misconduct to be serious must be of suchgrave and aggravated character and not merely trivial and unimportant. To be a

%ust cause for dismissal, such misconduct a must be serious; b must relate to the

performance of the employee0s duties; and c must show that the employee hasbecome unfit to continue woring for the employer. In other words, in order toconstitute serious misconduct which will warrant the dismissal of an employeeunder paragraph a of 'rticle // of the "abor Code, it is not sufficient that the actor conduct complained of has violated some established rules or policies. It ise*ually important and re*uired that the act or conduct must have been performedwith wrongful intent. In the instant case, petitioners2employees of $romm2:em mayhave committed an error of %udgment in claiming to be employees of $:, but itcannot be said that they were motivated by any wrongful intent in doing so. 'ssuch, the Court found them guilty of simple misconduct only, for assailing theintegrity of $romm2:em as a legitimate and independent promotion firm. 'misconduct which is not serious or grave, as that e6isting in the instant case,

cannot be a valid basis for dismissing an employee. oeb Aliviado, et al. vs. &ro%terH Gamble &$ilippines, 'n%., et al., G.R. No. 16!)!6, 2ar%$ *, !1!.

Dismissal; %ust cause; union security clause. In terminating the employment of anemployee by enforcing the union security clause, the employer is re*uired only todetermine and prove that+ - the union security clause is applicable; / the unionis re*uesting for the enforcement of the union security provision in the C&'; and =there is sufficient evidence to support the decision of the union to e6pel theemployee from the union. These re*uisites constitute %ust cause for terminating anemployee based on the union security provision of the C&'.

It is the third re*uisite that appears to be lacing in this case. It is apparent fromthe identical termination letters that :MC terminated Casio, et al., by relying uponthe resolutions of the union, which made no mention at all of the evidencesupporting the decision of the union to e6pel Casio, et al. from the union. :MCnever alleged nor attempted to prove that the company actually looed into theevidence of the union for e6pelling Casio, et al. and made a determination on thesufficiency thereof. 8ithout such a determination, :MC cannot claim that it hadterminated the employment of Casio, et al. for %ust cause. The failure of :MC tomae a determination of the sufficiency of evidence supporting the decision of theunion constitutes non2observance by :MC of procedural due process in thedismissal of employees. General 2illing Corporation vs. Ernesto Casio, et al. and-irgilio &ino, et al., G.R. No. 14*)), 2ar%$ 1!, !1!.

Dismissal pursuant to union security clause; separate notice and haring re*uired.:MC illegally dismissed Casio, et al. because not only did :MC fail to mae adetermination of the sufficiency of evidence to support the union0s decision to e6pelCasio, et al., it also failed to accord the e6pelled union members procedural dueprocess, i.e., notice and hearing, prior to the termination of their employment.

:MC, by its own admission, did not conduct a separate and independentinvestigation to determine the sufficiency of the evidence supporting the union0se6pulsion of Casio, et al. It simply acceded to the union0s demand. Conse*uently,:MC cannot insist that it has no liability for the payment of bacwages anddamages to Casio, et al., and that the liability for such payment should fall only

upon the union officers and board members who e6pelled Casio, et al. :MCcompletely missed the point that the e6pulsion of Casio, et al. by the union and thetermination of employment of the same employees by :MC, although related, aretwo separate and distinct acts. Despite a closed shop provision in the C&', law and

%urisprudence impose upon :MC the obligation to accord Casio, et al. substantiveand procedural due process before complying with the union0s demand to dismissthe e6pelled union members from service. The failure of :MC to carry out thisobligation maes it liable for illegal dismissal of Casio, et al. General 2illing
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