Labor-review-cases-doctrines.docx

I pages 7 to 131 RA 10022 amending sec 6 of RA 8042, March 9, 2010 CASES A. G.R. No. 171448 February 28, 2007.* PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. CHARLIE COMILA and AIDA COMILA, accused-appellants. Criminal Law; Double Jeopardy; Illegal Recruitment; Estafa; It is wellestablished in jurisprudence that a person may be charged and convicted for both illegal recruitment and estafa—illegal recruitment is malum prohibitum while estafa is malum in se.—It is well-established in jurisprudence that a person may be charged and convicted for both illegal recruitment and estafa. The reason therefor is not hard to discern: illegal recruitment is malum prohibitum, while estafa is malum in se. In the first, the criminal intent of the accused is not necessary for conviction. In the second, such an intent is imperative. Estafa under Article 315, paragraph 2, of the Revised Penal Code, is committed by any person who defrauds another by using fictitious name, or falsely pretends to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of similar deceits executed prior to or simultaneously with the commission of fraud. Here, it has been sufficiently proven that both appellants represented themselves to the complaining witnesses to have the capacity to send them to Italy for employment, even as they do not have the authority or license for the purpose. Doubtless, it is this misrepresentation that induced the complainants to part with their hard-earned money for placement and medical fees. Such act on the part of the appellants clearly constitutes estafa under Article 315, paragraph (2), of the Revised Penal Code. B. G.R. No. 169076 January 23, 2007 PEOPLE OF THE PHILIPPINES, appellee, vs. JOSEPH JAMILOSA, appellant. Labor Law; Criminal Law; Illegal Recruitment in Large Scale; Elements; Any recruitment activities to be undertaken by nonlicensee or non-holder of contracts shall be deemed illegal and punishable under Article 39 of the Labor Code of the Philippines.— Any recruitment activities to be undertaken by non-licensee or non-holder of contracts shall be deemed illegal and punishable under Article 39 of the

Labor Code of the Philippines. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. To prove illegal recruitment in large scale, the prosecution is burdened to prove three (3) essential elements, to wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any prohibited practice under Article 34 of the Labor Code; (2) accused did not have the license or the authority to lawfully engage in the recruitment and placement of workers; and (3) accused committed the same against three or more persons individually or as a group. As gleaned from the collective testimonies of the complaining witnesses which the trial court and the appellate court found to be credible and deserving of full probative weight, the prosecution mustered the requisite quantum of evidence to prove the guilt of accused beyond reasonable doubt for the crime charged. Indeed, the findings of the trial court, affirmed on appeal by the CA, are conclusive on this Court absent evidence that the tribunals ignored, misunderstood, or misapplied substantial fact or other circumstance. Same; Same; Same; Even in the absence of money or other valuables given as consideration for the “services” of the recruiter, he is still considered as being engaged in recruitment activities—it can be gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment may be for profit or not.—The failure of the prosecution to adduce in evidence any receipt or document signed by appellant where he acknowledged to have received money and liquor does not free him from criminal liability. Even in the absence of money or other valuables given as consideration for the “services” of appellant, the latter is considered as being engaged in recruitment activities. It can be gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment may be for profit or not. It is sufficient that the accused promises or offers for a fee employment to warrant conviction for illegal recruitment. As the Court held in People v. Sagaydo, 341 SCRA 329 (2000): Such is the case before us. The complainants parted with their money upon the prodding and enticement of accused-appellant on the false pretense that she had the capacity to deploy them for employment abroad. In the end, complainants were neither able to leave for work abroad nor get their money back. The fact that private complainants Rogelio Tibeb and Jessie Bolinao failed to produce receipts as proof of their payment to accused-appellant does not free the latter from liability. The absence of receipts cannot defeat a criminal prosecution for illegal recruitment. As long as the witnesses can positively show through their respective testimonies that the accused is the one involved in prohibited recruitment, he may be convicted of the offense despite the absence of receipts.

C. G.R. No. 156029 November 14, 2008 SANTOSA B. DATUMAN, vs. FIRST COSMOPOLITAN MANPOWER AND PROMOTION SERVICES, INC. Labor Law; Overseas Contract Workers; Private Employment Agencies; Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment.—The above provisions are clear that the private employment agency shall assume joint and solidary liability with the employer. This Court has, time and again, ruled that private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. This is in line with the policy of the state to protect and alleviate the plight of the working class. Same; Same; Same; Employment Contracts; The signing of the “substitute” contracts with the foreign employer/principal before the expiration of the Philippine Overseas Employment Administration (POEA)-approved contract and any continuation of petitioner’s employment beyond the original one-year term, against the will of petitioner, are continuing breaches of the original Philippine Overseas Employment Administration (POEA)-approved contract.— We cannot agree with the view of the CA that the solidary liability of respondent extends only to the first contract (i.e. the original, POEAapproved contract which had a term of until April 1990). The signing of the “substitute” contracts with the foreign employer/principal before the expiration of the POEA-approved contract and any continuation of petitioner’s employment beyond the original one-year term, against the will of petitioner, are continuing breaches of the original POEA-approved contract. To accept the CA’s reasoning will open the floodgates to even more abuse of our overseas workers at the hands of their foreign employers and local recruiters, since the recruitment agency could easily escape its mandated solidary liability for breaches of the POEA-approved contract by colluding with their foreign principals in substituting the approved contract with another upon the worker’s arrival in the country of employment. Such outcome is certainly contrary to the State’s policy of extending protection and support to our overseas workers.

Same; Same; Same; Same; The subsequently executed side agreement of an overseas contract worker with his foreign employer which reduced his salary below the amount approved by the Philippine Overseas Employment Administration (POEA) is void because it is against our existing laws, morals and public policy.—In Placewell International Services Corporation v. Camote, 492 SCRA 761 (2006), we held that the subsequently executed side agreement of an overseas contract worker with his foreign employer which reduced his salary below the amount approved by the POEA is void because it is against our existing laws, morals and public policy. The said side agreement cannot supersede the terms of the standard employment contract approved by the POEA. Same; Same; Same; Same; It is the terms of the original Philippine Overseas Employment Administration (POEA)-approved employment contract that shall govern the relationship of petitioner with the respondent recruitment agency and the foreign employer.—The solidary liability of respondent with petitioner’s foreign employer for petitioner’s money claims continues although she was forced to sign another contract in Bahrain. It is the terms of the original POEA-approved employment contract that shall govern the relationship of petitioner with the respondent recruitment agency and the foreign employer. We agree with the Labor Arbiter and the NLRC that the precepts of justice and fairness dictate that petitioner must be compensated for all months worked regardless of the supposed termination of the original contract in April 1990. Same; Same; Same; Same; The right to claim unpaid salaries (or in this case, unpaid salary differentials) accrue as they fall due.—We do not agree with the CA when it held that the cause of action of petitioner had already prescribed as the three-year prescriptive period should be reckoned from September 1, 1989 when petitioner was forced to sign another contract against her will. As stated in the complaint, one of petitioner’s causes of action was for underpayment of salaries. The NLRC correctly ruled the right to claim unpaid salaries (or in this case, unpaid salary differentials) accrue as they fall due. Thus, petitioner’s cause of action to claim salary differential for October 1989 only accrued after she had rendered service for that month (or at the end of October 1989). Her right to claim salary differential for November 1989 only accrued at the end of November 1989, and so on and so forth.

D. G.R. No. 182232. October 6, 2008.* PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. NENITA B. HU, accused-appellant. Criminal Law; Illegal Recruitment; Elements; Words and Phrases; Recruitment and placement is “any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers; and includes referrals, contact services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement”; The crime becomes Illegal Recruitment in Large Scale when the foregoing two elements concur, with the addition of a third element—the recruiter committed the same against three or more persons, individually or as group; A conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group.—Illegal recruitment is committed when two elements concur, namely: (1) the offender has no valid license or authority required by law to enable him to lawfully engage in the recruitment and placement of workers; and (2) he undertakes any activity within the meaning of “recruitment and placement” defined under Article 13(b) of the Labor Code. Recruitment and placement is “any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers; and includes referrals, contact services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement.” The crime becomes Illegal Recruitment in Large Scale when the foregoing two elements concur, with the addition of a third element—the recruiter committed the same against three or more persons, individually or as group. A conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. While it is true that the law does not require that at least three victims testify at the trial, nevertheless, it is necessary that there is sufficient evidence proving that the offense was committed against three or more persons. Same; Same; In offenses in which the number of victims is essential, failure of the prosecution to prove by convincing evidence that the offense is committed against the minimum number of persons

required by law is fatal to its cause of action.—While there were six private complainants in this case, four of whom were presented during the trial, the prosecution, nonetheless, failed to establish that Hu engaged in illegal recruitment acts against at least three of these complainants. In offenses in which the number of victims is essential, such as in the present petition, failure of the prosecution to prove by convincing evidence that the offense is committed against the minimum number of persons required by law is fatal to its cause of action. Underscoring the significance of the number of victims was the disquisition of Justice Florenz Regalado in People v. Ortiz-Miyake, 279 SCRA 180 (1997): It is evident that in illegal recruitment cases, the number of persons victimized is determinative. Where illegal recruitment is committed against a lone victim, the accused may be convicted of simple illegal recruitment which is punishable with a lower penalty under Article 39(c) of the Labor Code. Corollarily, where the offense is committed against three or more persons, it is qualified to illegal recruitment in large scale which provides a higher penalty under Article 39(a) of the same Code. (Emphasis supplied.) Same; Same; Failure of the prosecution to prove the guilt of the accused beyond reasonable doubt does not absolve her of her civil obligation to return the money she collected from private complaints.—Failure of the prosecution to prove the guilt of Hu beyond reasonable doubt does not absolve her of her civil obligation to return the money she collected from private complaints Panguelo, Abril and Orillano, plus legal interest in accordance with our ruling in Domagsang v. Court of Appeals, 347 SCRA 75 (2000). There, the prosecution failed to sufficiently establish a case to warrant a conviction, but clearly proved a just debt owed to the private complainant. Thus, the accused was ordered to pay the face value of the check with 12% legal interest per annum, reckoned from the filing of the information until the finality of the judgment. It is well settled that acquittal based on reasonable doubt does not preclude an award for civil damages. The judgment of acquittal extinguishes the liability of the accused only when it includes a declaration that the facts from which the civil liability might arise did not exist. Thus, civil liability is not extinguished where the acquittal is based on lack of proof beyond reasonable doubt, since only preponderance of evidence is required in civil cases. There appears to be no sound reason to require that a separate action be still filed considering that the facts to be proved in the civil case have already been established in the criminal proceedings. In the present case, the prosecution explicitly proved that private complainants parted with substantial amounts of money upon the prodding and enticement of Hu on the false pretense that she had the capacity to deploy them for

employment abroad. In the end, private complainants were not able to leave for work abroad or get their money back. Same; Same; Words and Phrases; The act of referral, which means the act of passing along or forwarding an applicant after an initial interview to a selected employer, placement or bureau, is included in recruitment.—Garcia testified that she applied for employment in Taiwan for the position of Electronic Operator thru Brighturn in April 2002. Due to the alleged suspension of Brighturn’s license, Hu referred her to a neighboring agency (Best One), but Hu continued collecting placement fees from her. The act of referral, which means the act of passing along or forwarding an applicant after an initial interview to a selected employer, placement or bureau, is included in recruitment. Undoubtedly, the act of Hu in referring Garcia to another recruitment agency squarely fell within the purview of recruitment that was undertaken by Hu after her authority to recruit and place workers already expired on 17 December 2001. Same; Same; Receipts; The absence of receipts in the case of illegal recruitment does not warrant the acquittal of the accused and is not fatal to the prosecution’s case.—Failure of Garcia to present proof of payment is irrelevant. The absence of receipts in the case of illegal recruitment does not warrant the acquittal of the appellant and is not fatal to the prosecution’s case. As long as the prosecution is able to establish through credible and testimonial evidence, as in the case at bar, that the appellant had engaged in illegal recruitment, a conviction for the offense can be very well justified. E. G.R. Nos. 182978-79 April 7, 2009 BECMEN SERVICE EXPORTER AND PROMOTION, INC., vs SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf of their daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and JAIME ORTIZ (President,White Falcon Services, Inc.) II

Pages 139; 145 to 160 Labor Code Pages 79 to 93 (Tesda Act of 1994) Pages 94 to 108 Special Laws (RA 7277 – Magna Carta for Disabled Persons) Cases:

A. G.R. No. 122917 July 12, 1999 MARITES BERNARDO et al vs. NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST COMPANY

Labor Law; Labor Code; The facts, viewed in light of the Labor Code and the Magna Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of them, should be deemed regular employees.—At the outset, let it be known that this Court appreciates the nobility of private respondent’s effort to provide employment to physically impaired individuals and to make them more productive members of society. However, we cannot allow it to elude the legal consequences of that effort, simply because it now deems their employment irrelevant. The facts, viewed in light of the Labor Code and the Magna Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of them, should be deemed regular employees. As such, they have acquired legal rights that this Court is duty-bound to protect and uphold, not as a matter of compassion but as a consequence of law and justice.

Same; Same; Since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor Code.—The fact that the employees were qualified disabled persons necessarily removes the employment contracts from the ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-bodied persons, they are thus covered by Article 280 of the Labor Code.

Same; Same; The test of whether an employee is regular was laid down in De Leon vs. National Labor Relations Commission.—The test of whether an employee is regular was laid down in De Leon v. NLRC, in which this Court held: “The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the

scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least one year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity, and while such activity exists.”

Same; Same; When the bank renewed the contract after the lapse of the six-month probationary period, the employees thereby became regular employees.—As held by the Court, “Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making permanent casuals of our lowly employees by the simple expedient of extending to them probationary appointments, ad infinitum.” The contract signed by petitioners is akin to a probationary employment, during which the bank determined the employees’ fitness for the job. When the bank renewed the contract after the lapse of the six-month probationary period, the employees thereby became regular employees. No employer is allowed to determine indefinitely the fitness of its employees.

Same; Same; As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their services may be terminated only for a just or authorized cause.—As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their services may be terminated only for a just or authorized cause. Because respondent failed to show such cause, these twenty-seven petitioners are deemed illegally dismissed and therefore entitled to back wages and reinstatement without loss of seniority rights and other privileges. Considering the allegation of respondent that the job of money sorting is no longer available because it has been assigned back to the tellers to whom it originally belonged, petitioners are hereby awarded separation pay in lieu of reinstatement.

Same; Same; An employee is regular because of the nature of work and the length of service, not because of the mode or even the reason for hiring them.—Respondent argues that petitioners were merely “accommodated” employees. This fact does not change the nature of their employment. As earlier noted, an employee is regular

Same; Same; The determination of whether employment is casual or regular does not depend on the will or word of the employer, and the procedure of hiring x x x but on the nature of the activities performed by the employee, and to some extent, the length of performance and its continued existence.—Equally unavailing are private respondent’s arguments that it did not go out of its way to recruit petitioners, and that its plantilla did not contain their positions. In L. T. Datu v. NLRC, the Court held that “the determination of whether employment is casual or regular does not depend on the will or word of the employer, and the procedure of hiring x x x but on the nature of the activities performed by the employee, and to some extent, the length of performance and its continued existence.”

Same; Same; The well-settled rule is that the character of employment is determined not by stipulations in the contract, but by the nature of the work performed.—Private respondent argues that the petitioners were informed from the start that they could not become regular employees. In fact, the bank adds, they agreed with the stipulation in the contract regarding this point. Still, we are not persuaded. The well-settled rule is that the character of employment is determined not by stipulations in the contract, but by the nature of the work performed. Otherwise, no employee can become regular by the simple expedient of incorporating this condition in the contract of employment.

Same; Same; The noble objectives of Magna Carta for Disabled Persons are not based merely on charity or accommodation, but on justice and the equal treatment of qualified persons, disabled or not.—In rendering this decision, the Court emphasizes not only the constitutional bias in favor of the working class, but also the concern of the State for the plight of the disabled. The noble objectives of Magna Carta for Disabled Persons are not based merely on charity or accommodation, but on justice and the equal treatment of qualified persons, disabled or not. In the present case, the handicap of petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of this statement is the repeated renewal of their employment contracts. Why then should they be dismissed, simply because they are physically impaired? The Court believes, that, after showing their

fitness for the work assigned to them, they should be treated and granted the same rights like any other regular employees III

Pages 167 to 240 (art 84) – Labor Code

IV

Pages 240 )Art. 85) to 303 – Labor Code

RA 10028 – Expanding Breastfeeding Promotion Act of 2009

Cases Onus Probandi of Empoyer-Employee Relationship

A. G.R. No. 192558 February 15, 2012 BITOY JAVIER (DANILO P. JAVIER), CORPORATION/FLORDELYN CASTILLO.

vs.

FLY

ACE

Labor Law; Appeals; Generally, the Supreme Court does not review errors that raise factual questions, however, when there is conflict among the factual findings of the antecedent deciding bodies like the Labor Arbiter (LA), the National Labor Relations Commission (NLRC) and the Court of Appeals (CA), “it is proper, in the exercise of the High Court’s equity jurisdiction, to review and re-evaluate the factual issues and to look into the records of the case and reexamine the questioned findings.”—It must be noted that the issue of Javier’s alleged illegal dismissal is anchored on the existence of an employer-employee relationship between him and Fly Ace. This is essentially a question of fact. Generally, the Court does not review errors that raise factual questions. However, when there is conflict among the factual findings of the antecedent deciding bodies like the LA, the NLRC and the CA, “it is proper, in the exercise of Our equity jurisdiction, to review and re-evaluate the factual issues and to look into the records of the case and re-examine the questioned findings.” In dealing with factual issues in labor cases, “substantial evidence— that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion—is sufficient.”

Same; Same; Labor officials are enjoined to use reasonable means to ascertain the facts speedily and objectively with little regard to technicalities or formalities but nowhere in the rules are they provided a license to completely discount evidence, or the lack of it; When confronted with conflicting versions on factual matters, it is for them in the exercise of discretion to determine which party deserves credence on the basis of evidence received, subject only to the requirement that their decision must be supported by substantial evidence.—As the records bear out, the LA and the CA found Javier’s claim of employment with Fly Ace as wanting and deficient. The Court is constrained to agree. Although Section 10, Rule VII of the New Rules of Procedure of the NLRC allows a relaxation of the rules of procedure and evidence in labor cases, this rule of liberality does not mean a complete dispensation of proof. Labor officials are enjoined to use reasonable means to ascertain the facts speedily and objectively with little regard to technicalities or formalities but nowhere in the rules are they provided a license to completely discount evidence, or the lack of it. The quantum of proof required, however, must still be satisfied. Hence, “when confronted with conflicting versions on factual matters, it is for them in the exercise of discretion to determine which party deserves credence on the basis of evidence received, subject only to the requirement that their decision must be supported by substantial evidence.” Accordingly, the petitioner needs to show by substantial evidence that he was indeed an employee of the company against which he claims illegal dismissal. Same; Employer-Employee Relationship; No particular form of evidence is required to prove the existence of such employeremployee relationship.—“No particular form of evidence is required to prove the existence of such employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. Hence, while no particular form of evidence is required, a finding that such relationship exists must still rest on some substantial evidence. Moreover, the substantiality of the evidence depends on its quantitative as well as its qualitative aspects.” Although substantial evidence is not a function of quantity but rather of quality, the x x x circumstances of the instant case demand that something more should have been proffered. Had there been other proofs of employment, such as x x x inclusion in petitioner’s payroll, or a clear exercise of control, the Court would have affirmed the finding of employer-employee relationship.”

Same; Same; Tests to Determine the Existence of EmployerEmployee Relationship.—The Court is of the considerable view that on Javier lies the burden to pass the well-settled tests to determine the existence of an employer-employee relationship, viz.: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. Of these elements, the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which the result is to be accomplished. Same; Same; Independent Contractors; In determining whether the relationship is that of employer and employee or one of an independent contractor, each case must be determined on its own facts and all the features of the relationship are to be considered.— The Court’s decision does not contradict the settled rule that “payment by the piece is just a method of compensation and does not define the essence of the relation.” Payment on a piece-rate basis does not negate regular employment. “The term ‘wage’ is broadly defined in Article 97 of the Labor Code as remuneration or earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or commission basis. Payment by the piece is just a method of compensation and does not define the essence of the relations. Nor does the fact that the petitioner is not covered by the SSS affect the employer-employee relationship. However, in determining whether the relationship is that of employer and employee or one of an independent contractor, each case must be determined on its own facts and all the features of the relationship are to be considered.” Same; Social Justice; Out of its concern for the less privileged in life, the Supreme Court has inclined, more often than not, toward the worker and upheld his cause in his conflicts with the employer.—While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its rights which are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for the less privileged in life, the Court has inclined, more often than not, toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.

B. G.R. No. 193493 June 13, 2013 JAIME N. GAPAYAO, vs. ROSARIO FULO, SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, Remedial Law; Civil Procedure; Appeals; Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the Court of Appeals.―At the outset, it is settled that the Court is not a trier of facts and will not weigh evidence all over again. Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the CA. For as long as these findings are supported by substantial evidence, they must be upheld. Labor Law; Regular Employees; Project Employees; Casual Employees; Jurisprudence has identified the three types of employees mentioned in Article 280 of the Labor Code.―Jurisprudence has identified the three types of employees mentioned in the provision: (1) regular employees or those who have been engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of their engagement, or those whose work or service is seasonal in nature and is performed for the duration of the season; and (3) casual employees or those who are neither regular nor project employees. Same; Same; For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular activity they perform and the usual trade or business of the employer.―Farm workers generally fall under the definition of seasonal employees. We have consistently held that seasonal employees may be considered as regular employees. Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employer is such that during the off season, they are temporarily laid off; but reemployed during the summer season or when their services may be needed. They are in regular employment because of the nature of their job, and not because of the length of time

they have worked. The rule, however, is not absolute. In Hacienda Fatima v. National Federation of Sugarcane Workers-Food & General Trade, 396 SCRA 518 (2003), the Court held that seasonal workers who have worked for one season only may not be considered regular employees. Similarly, in Mercado, Sr. v. NLRC, 201 SCRA 332 (1991), it was held that when seasonal employees are free to contract their services with other farm owners, then the former are not regular employees. For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular activity they perform and the usual trade or business of the employer. This test has been explained thoroughly in De Leon v. NLRC, 176 SCRA 615 (1989), viz.: The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. Same; Pakyaw Workers; Words and Phrases; Control Test; Pakyaw workers are considered employees for as long as their employers exercise control over them.―Pakyaw workers are considered employees for as long as their employers exercise control over them. In Legend Hotel Manila v. Realuyo, 677 SCRA 10 (2012), the Court held that “the power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship. This is the so-called control test and is premised on whether the person for whom the services are performed reserves the right to control both the end achieved and the manner and means used to achieve that end.” It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. It is not essential that the employer actually supervises the performance of duties by the employee. It is enough that the former has a right to wield the power.

Onus Probandi of Payment of Benefits A. G.R. No. 173648 January 16, 2012 ABDULJUAHID R. PIGCAULAN, vs. SECURITY INVESTIGATION, INC. and/or RENE AMBY REYES

and

CREDIT

Remedial Law; Civil Procedure; Certificate of Non-forum Shopping; The filing of a certificate of non-forum shopping is mandatory so much so that non-compliance could only be tolerated by special circumstances and compelling reasons; This Court has held that when there are several petitioners, all of them must execute and sign Originally captioned as Oliver Canoy and Abduljuahid Pigcaulan, petitioners vs. Security and Credit Investigation Inc. and/or Rene Amby Reyes, respondents. The Court, however, drops Oliver Canoy from the caption consistent with the Court’s ruling herein. The certification against forum shopping; otherwise, those who did not sign will be dropped as parties to the case.—The filing of a certificate of non-forum shopping is mandatory so much so that non-compliance could only be tolerated by special circumstances and compelling reasons. This Court has held that when there are several petitioners, all of them must execute and sign the certification against forum shopping; otherwise, those who did not sign will be dropped as parties to the case. True, we held that in some cases, execution by only one of the petitioners on behalf of the other petitioners constitutes substantial compliance with the rule on the filing of a certificate of non-forum shopping on the ground of common interest or common cause of action or defense. We, however, find that common interest is not present in the instant petition. To recall, Canoy’s and Pigcaulan’s complaints were consolidated because they both sought the same reliefs against the same respondents. This does not, however, mean that they share a common interest or defense. The evidence required to substantiate their claims may not be the same. A particular evidence which could sustain Canoy’s action may not effectively serve as sufficient to support Pigcaulan’s claim. Same; Same; Same; Procedural Rules and Technicalities; Procedural rules should not be ignored simply because their non-observance may result in prejudice to a party’s substantial rights.—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. However, Canoy failed to advance any justifiable reason why he did not inform anyone of his whereabouts when he knows that he has a pending case against his former employer. Sadly, his lack of prudence and diligence cannot merit the court’s consideration or sympathy. It must be emphasized at this point that procedural rules should not be ignored simply because their non-observance may result in prejudice to a party’s substantial rights. The Rules of Court should be followed except only for the most persuasive of reasons. Labor Law; Holiday Pay; Service Incentive Leave Pay; The employer has the burden of proving of paying holiday pay, service incentive leave pay and other benefits.—Article 94 of the Labor Code provides that: 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; x x x x While Article 95 of the Labor Code provides: 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. x x x x Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work. Likewise, express provision of the law entitles him to service incentive leave benefit for he rendered service for more than a year already. Furthermore, under Presidential Decree No. 851, he should be paid his 13th month pay. As employer, SCII has the burden of proving that it has paid these benefits to its employees. Same; Same; Same; Prescription; All money claims arising from an employer-employee relationship shall be filed within three years from the time the cause of action accrued.—Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed within three years from the time the cause of action accrued, Pigcaulan can only demand the amounts due him for the period within three years preceding the filing of the complaint in 2000. Furthermore, since the records are insufficient to use as bases to properly compute Pigcaulan’s claims, the case should be remanded to the Labor Arbiter for a detailed computation of the monetary benefits due to him. Pigcaulan vs. Security and Credit Investigation, Inc., 663 SCRA 1, G.R. No. 173648 January 16, 2012 B. No. L-31341 March 31, 1976

PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION (PALEA) and PHILIPPINE AIR LINES SUPERVISORS’ ASSOCIATION (PALSA), vs. PHILIPPINE AIR LINES, INC. No. L-31341 and No. L-31343 March 31, 1976 PHILIPPINE AIR LINES, INC., vs. PHILIPPINE AIR LINES EMPLOYEES’ ASSOCIATION, PHILIPPINE AIRLINES SUPERVISORS’ ASSOCIATION, and the COURT OF INDUSTRIAL RELATIONS, Labor relations; Computation of basic daily rate of employees; Divisor in computing an employee’s basic daily rate should be the actual working days in a year; Reasons.—The divisor in computing an employee’s basic daily rate should be the actual working days in a year. The number of off-days are not to be counted precisely because on such off-days, an employee is not required to work. Simple common sense dictates that should an employee opt not to work—which he can legally do—on an off-day, and for such he gets no pay, he would be unduly robbed of a portion of his legitimate pay if and when in computing his basic daily and hourly rate, such off-day is deemed subsumed by the divisor. For it is elementary in the fundamental process of division that with a constant dividend, the bigger your divisor is, the smaller your quotient will be. Same; Same; Same; Off-days not paid days; Reasons.—Off-days are not paid days. Precisely, off-days are rest days for the worker. He is not required to work on such days. This finds support not only in the basic principle in labor that the basis of remuneration or compensation is actual service rendered, but in the ever-pervading labor spirit aimed at humanizing the conditions of the working man. Since during his off-days an employee is not compelled to work he cannot, conversely, demand for his corresponding pay. If, however, a worker works on his off-day, our welfare laws duly reward him with a premium higher than what he would receive when he works on his regular working day. Same; Same; Where employer commits itself to pay additional compensation to employees who work on off-days.—PAL inked with the representative unions of the employees collective bargaining agreements wherein it bound itself to duly compensate employees working on their offdays. It must pay not because of compulsion of law but because of contractual obligation.

Labor laws; Construction of.—In case of doubt, all labor legislation and labor contracts should be construed in favor of the safety and decent living of the laborer. Estoppel; Applicability of estoppel depends on circumstances of case.—The doctrine of estoppel had its origin in equity. As such, its applicability depends, to a large extent, on the circumstances surrounding a particular case. Where, therefore, the neglect or omission alleged to have placed a party in estoppel is actually fraught Same; Estoppel by silence; Element of turpitude or negligence must be connected with silence.—Mere innocent silence will not work estoppel. There must also be some element of turpitude or negligence connected with the silence by which another is misled to his injury. Same; Estoppel cannot arrest recovery of overtime compensation.— Jurisprudence likewise fortifies the position that in the interest of public policy, estoppel and laches cannot arrest recovery of overtime compensation. Same; Estoppel cannot give validity to act against public policy.—The unilateral adoption by PAL of an irregular wage formula being an act against public policy, the doctrine of estoppel cannot give validity to the same. Prescription; Where claim for overtime compensation based on collective bargaining agreements, prescription period of ten years applies.—The present case calls for the application of the Civil Code provisions on the prescriptive period in the filing of actions based on written contracts. The reason should be fairly obvious. Petitioners’ claim fundamentally involves the strict compliance by PAL of the provisions on wage computation embodied in the collective bargaining agreements inked between it and the employees’ representative unions. Same; Where claim for overtime compensation based solely on EightHour Labor Law, prescriptive period of three years applies.—The threeyear prescriptive period fixed in the Eight-Hour Labor Law (CA No. 444, as amended) will apply, if the claim for differentials for overtime work is solely based on said law, and not on a collective bargaining agreement or any other contract. C. G.R. No. 146881

February 5, 2007 COCA-COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA, Manager, petitioners, vs. DR. DEAN N. CLIMACO Labor Law; Employer-Employee Relationship; Four-Fold Test.—The Court, in determining the existence of an employeremployee relationship, has invariably adhered to the four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the socalled “control test,” considered to be the most important element. Same; Same; Physicians; Retainer Agreements; Independent Contractors; There is nothing wrong with the employment of a doctor as a company retained physician; Where there is no employeremployee relationship between the parties, the termination of the Retainership Agreement, which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of the retained physician.—The Court also notes that the Retainership Agreement granted to both parties the power to terminate their relationship upon giving a 30-day notice. Hence, petitioner company did not wield the sole power of dismissal or termination. The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the employment of respondent as a retained physician of petitioner company and upholds the validity of the Retainership Agreement which clearly stated that no employer-employee relationship existed between the parties. The Agreement also stated that it was only for a period of 1 year beginning January 1, 1988 to December 31, 1998, but it was renewed on a yearly basis. Considering that there is no employer-employee relationship between the parties, the termination of the Retainership Agreement, which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of respondent. Consequently, there is no basis for the moral and exemplary damages granted by the Court of Appeals to respondent due to his alleged illegal dismissal. D. G.R. No. 168424 June 8, 2007 CONSOLIDATED BROADCASTING SYSTEM, INC., vs. DANNY OBERIO, ELNA DE PEDRO, LUISITO VILLAMOR, WILMA SUGATON, RUFO DEITA, JR., EMILY DE GUZMAN, CAROLINE LADRILLO, JOSE ROBERTO REGALADO, ROSEBEL NARCISO & ANANITA TANGETE

Labor Law; Dismissals; Labor Standards; Jurisdictions; Forum Shopping; In cases where the complaint for violation of labor standard laws preceded the termination of the employee and the filing of the illegal dismissal case, it would not be in consonance with justice to charge the complainants with engaging in forum shopping when the remedy available to them at the time their causes of action arose was to file separate cases before different fora.—Under Article 217 of the Labor Code, termination cases fall under the jurisdiction of Labor Arbiters. Whereas, Article 128 of the same Code vests the Secretary of Labor or his duly authorized representatives with the power to inspect the employer’s records to determine and compel compliance with labor standard laws. The exercise of the said power by the Secretary or his duly authorized representatives is exclusive to cases where employer-employee relationship still exists. Thus, in cases where the complaint for violation of labor standard laws preceded the termination of the employee and the filing of the illegal dismissal case, it would not be in consonance with justice to charge the complainants with engaging in forum shopping when the remedy available to them at the time their causes of action arose was to file separate cases before different fora. Besides, in the instant case, respondent Danny Oberio disclosed in the verification the pendency of the case regarding wage differential. In addition, said case was discussed in detail in the position paper, evincing the absence of any intention on the part of respondents to mislead the Labor Arbiter. Same; Project Employees; Broadcast Industry; Program Employment; Policy Instruction No. 40; Project or contractual employees are required to be apprised of the project they will undertake under a written contract.—Petitioner failed to controvert with substantial evidence the allegation of respondents that they were hired by the former on various dates from 1974 to 1997. If petitioner did not hire respondents and if it was the director alone who chose the talents, petitioner could have easily shown, being in possession of the records, a contract to such effect. However, petitioner merely relied on its contention that respondents were piece rate contractors who were paid by results. Note that under Policy Instruction No. 40, petitioner is obliged to execute the necessary contract specifying the nature of the work to be performed, rates of pay, and the programs in which they will work. Moreover, project or contractual employees are required to be apprised of the project they will undertake under a written contract. This was not complied with by the petitioner, justifying the reasonable conclusion that no such contracts exist and that respondents were in fact regular employees.

Same; Same; The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer—also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business.—The engagement of respondents for a period ranging from 2 to 25 years and the fact that their drama programs were aired not only in Bacolod City but also in the sister stations of DYWB in the Visayas and Mindanao areas, undoubtedly show that their work is necessary and indispensable to the usual business or trade of petitioner. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. Thus, even assuming that respondents were initially hired as project/contractual employees who were paid per drama or per project/contract, the engagement of their services for 2 to 25 years justify their classification as regular employees, their services being deemed indispensable to the business of petitioner. Same; Dismissals; In labor cases, the employer has the burden of proving that the dismissal was for a just cause; failure to show this would necessarily mean that the dismissal was unjustified and, therefore, illegal.—We find that respondents were illegally dismissed. In labor cases, the employer has the burden of proving that the dismissal was for a just cause; failure to show this would necessarily mean that the dismissal was unjustified and, therefore, illegal. To allow an employer to dismiss an employee based on mere allegations and generalities would place the employee at the mercy of his employer; and the right to security of tenure, which this Court is bound to protect, would be unduly emasculated. In this case, petitioner merely contended that it was respondents who ceased to report to work, and never presented any substantial evidence to support said allegation. Petitioner therefore failed to discharge its burden, hence, respondents were correctly declared to have been illegally dismissed.

Same; Same; If doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter—the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.—If doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter—the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. It is a timehonored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence should be resolved in the former’s favor. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection of labor. Strained Relations Doctrine; In the event that reinstatement is no longer feasible, or if the employee decides not to be reinstated, the employer shall pay him separation pay in lieu of reinstatement— When a person is illegally dismissed, he is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. In the event, however, that reinstatement is no longer feasible, or if the employee decides not to be reinstated, the employer shall pay him separation pay in lieu of reinstatement. Such a rule is likewise observed in the case of a strained employer-employee relationship or when the work or position formerly held by the dismissed employee no longer exists. In sum, an illegally dismissed employee is entitled to: (1) either reinstatement if viable or separation pay if reinstatement is no longer viable, and (2) backwages. In the instant controversy, reinstatement is no longer viable considering the strained relations between petitioner and respondents. As admitted by the latter, the complaint filed before the DOLE strained their relations with petitioner who eventually dismissed them from service. Payment of separation pay instead of reinstatement would thus better promote the interest of both parties. E. G.R. No. 162833 June 15, 2007 LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG ALYANSAPINAGBUKLOD NG MANGGAGAWANG PROMO NG BURLINGAME, petitioner, vs. BURLINGAME CORPORATION Labor Law; Job Contracting; Conditions to be considered in determining job contracting.—The case of De Los Santos v. NLRC, 372 SCRA 723 (2001), succinctly enunciates the statutory criteria: Job

contracting is permissible only if the following conditions are met: 1) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and 2) the contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of the business. Same; Employer-Employee Relationship; Elements to Determine the Existence of an Employment Relationship.—The “four-fold test” will show that respondent is the employer of petitioner’s members. The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct. The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. Same; Same; In labor-only contracting, the law creates an employeremployee relationship to prevent a circumvention of labor laws; Contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer.—Under this circumstance, there is no doubt that F. Garil was engaged in labor-only contracting, and as such, is considered merely an agent of Burlingame. In labor-only contracting, the law creates an employer-employee relationship to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. Since F. Garil is a labor-only contractor, the workers it supplied should be considered as employees of Burlingame in the eyes of the law. F. G.R. No. 162813 February 12, 2007 FAR EAST AGRICULTURAL SUPPLY, INC. and/or ALEXANDER UY, vs. JIMMY LEBATIQUE and THE HONORABLE COURT OF APPEALS

Labor Law; Illegal Dismissals; Abandonment; To constitute abandonment as a just cause for dismissal, there must be: a) absence without justifiable reason; and b) a clear intention, as manifested by some overt act, to sever the employer-employee relationship.—It is well-settled that in cases of illegal dismissal, the burden is on the employer to prove that the termination was for a valid cause. In this case, petitioners failed to discharge such burden. Petitioners aver that Lebatique was merely suspended for one day but he abandoned his work thereafter. To constitute abandonment as a just cause for dismissal, there must be: (a) absence without justifiable reason; and (b) a clear intention, as manifested by some overt act, to sever the employer-employee relationship. Same; Same; Same; An employee who takes steps to protest his layoff cannot by any stretch of imagination be said to have abandoned his work and the filing of the complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment—a contrary notion would not only be illogical but also absurd.—An employee who takes steps to protest his layoff cannot by any stretch of imagination be said to have abandoned his work and the filing of the complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment. A contrary notion would not only be illogical but also absurd. Same; Field Personnel; Words and Phrases; Field personnel shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.—“Field personnel” shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Same; Same; In Auto Bus Transport Systems, Inc. v. Bautista [458 SCRA 578, 2005], this Court emphasized that the definition of a field personnel is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s performance is unsupervised by the employer.—In Auto Bus Transport Systems, Inc. v. Bautista, 458 SCRA 578 (2005), this Court emphasized that the definition of a “field personnel” is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s performance is

unsupervised by the employer. We held that field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Thus, in order to determine whether an employee is a field employee, it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or not the employee’s time and performance are constantly supervised by the employer. Same; Employees’ Compensation; Employer-Employee Relationship; Drivers like Lebatique, are under the control and supervision of management officers. Lebatique, therefore, is a regular employee whose tasks are usually necessary and desirable to the usual trade and business of the company. Thus, he is entitled to the benefits accorded to regular employees of Far East, including overtime pay and service incentive leave pay.—Drivers, like Lebatique, are under the control and supervision of management officers. Lebatique, therefore, is a regular employee whose tasks are usually necessary and desirable to the usual trade and business of the company. Thus, he is entitled to the benefits accorded to regular employees of Far East, including overtime pay and service incentive leave pay. Same; Same; The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three years before the filing of the complaint.—The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three years before the filing of the complaint. G. G.R. No. 156146 June 21, 2007. OLONGAPO MAINTENANCE SERVICES, INC., vs. EDGARDO B. CHANTENGCO et al Labor Law; Regular and Project Employees; A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring.—The principal test in determining whether an employee is a project employee is whether he/she is assigned to carry out a “specific project or undertaking,” the duration and scope of which are specified at the time the employee is engaged in the project, or where the work or

service to be performed is seasonal in nature and the employment is for the duration of the season. A true project employee should be assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring. Same; Same; Evidence; Appeals; The practice of submitting evidence late—like in a motion for reconsideration before the Court of Appeals—cannot be tolerated, for it defeats the speedy administration of justice involving poor workers, aside from being unfair.—In the instant case, the record is bereft of proof that the respondents’ engagement as project employees has been predetermined, as required by law. We agree with the Court of Appeals that OMSI did not provide convincing evidence that respondents were informed that they were to be assigned to a “specific project or undertaking” when OMSI hired them. Notably, the employment contracts for the specific project signed by the respondents were never presented. All that OMSI submitted in the proceedings a quo are the service contracts between OMSI and the MIAA. Clearly, OMSI utterly failed to establish by substantial evidence that, indeed, respondents were project employees and their employment was coterminous with the MIAA contract. Evidently cognizant of such neglect, OMSI attempted to correct the situation by attaching copies of the application forms of the respondents to its motion for reconsideration of the Court of Appeals’ Decision. Such practice cannot be tolerated. This practice of submitting evidence late is properly rejected as it defeats the speedy administration of justice involving poor workers. It is also unfair. Same; Same; Same; Employers who hire project employees are mandated to state and, once its veracity is challenged, to prove the actual basis for the latter’s dismissal.—In termination cases, the burden of proof rests on the employer to show that the dismissal is for a just cause. Thus, employers who hire project employees are mandated to state and, once its veracity is challenged, to prove the actual basis for the latter’s dismissal. Unfortunately for OMSI, it failed to discharge the burden. All that we have is OMSI’s selfserving assertion that the respondents were hired as project employees. H. G.R. No. 167622 November 7, 2008 GREGORIO V. TONGKO, vs. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS

Labor Law; Employer-Employee Relationship; Four-fold test to determine the existence of the elements of an employer-employee relationship.—In the determination of whether an employer-employee relationship exists between two parties, this Court applies the four-fold test to determine the existence of the elements of such relationship. In Pacific Consultants International Asia, Inc. v. Schonfeld, 516 SCRA 209, 228 (2007), the Court set out the elements of an employer-employee relationship, thus: Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute, four elements constitute the reliable yardstick: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct. It is the so-called “control test” which constitutes the most important index of the existence of the employer-employee relationship that is, whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. Stated otherwise, an employeremployee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end. Same; Same; Control not only applies to the work or goal to be done but also to the means and methods to accomplish it; Not all forms of control would establish an employer-employee relationship.—An impasse appears to have been reached between the CA and the NLRC on the sole issue of control over an employee’s conduct. It bears clarifying that such control not only applies to the work or goal to be done but also to the means and methods to accomplish it. In Sonza v. ABS-CBN Broadcasting Corporation, 431 SCRA 583 (2004), we explained that not all forms of control would establish an employer-employee relationship, to wit: Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the services being rendered may be accorded the effect of establishing an employer-employee relationship. The facts of this case fall squarely with the case of Insular Life Assurance Co., Ltd. vs. NLRC, 179 SCRA 459 (1989). In said case, we held that: Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it.

Same; Same; Insurance Agents; If the specific rules and regulations that are enforced against insurance agents or managers are such that would directly affect the means and methods by which such agents or managers would achieve the objectives set by the insurance company, they are employees of the insurance company.—Based on the foregoing cases, if the specific rules and regulations that are enforced against insurance agents or managers are such that would directly affect the means and methods by which such agents or managers would achieve the objectives set by the insurance company, they are employees of the insurance company. In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to this conclusion. Same; Termination of Employment; Burden of Proof; 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.—In Quebec, Sr. v. National Labor Relations Commission, 301 SCRA 627 (1999), we ruled that: 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. This burden of proof appropriately lies on the shoulders of the employer and not on the employee because a worker’s job has some of the characteristics of property rights and is therefore within the constitutional mantle of protection. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws. Same; Same; Backwages; An illegally dismissed employee shall be entitled to backwages and separation pay, if reinstatement is no longer viable.—In Triad Security & Allied Services, Inc. v. Ortega, Jr. (Triad), 481 SCRA 591 (2006), we thus stated that an illegally dismissed employee shall be entitled to backwages and separation pay, if reinstatement is no longer viable: As the law now stands, an illegally dismissed employee is entitled to two reliefs, namely: backwages and reinstatement. These are separate and distinct from each other. However, separation pay is granted where reinstatement is no longer feasible because of strained relations between the employee and the employer. In effect, an illegally dismissed employee is entitled to either reinstatement,

if viable, or separation pay if reinstatement is no longer viable and backwages. I. G.R. No. 151309 October 15, 2008 BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG, as Union President, JOSELITO LARIÑO, VIVENCIO B. BARTE, SATURNINO EGERA and SIMPLICIO AYA-AY, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, TRYCO PHARMA CORPORATION, and/or WILFREDO C. RIVERA Labor Law; Constructive Dismissals; Transfer of Employees; While the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives; The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.—Tryco’s decision to transfer its production activities to San Rafael, Bulacan, regardless of whether it was made pursuant to the letter of the Bureau of Animal Industry, was within the scope of its inherent right to control and manage its enterprise effectively. While the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. Same; Same; Same; Management’s Prerogative; Management’s prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is, therefore, generally not constitutive of constructive dismissal.—This prerogative extends to the management’s right to regulate, according to its own discretion and judgment, all aspects of employment, including the freedom to transfer and reassign employees according to the requirements of its business. Management’s prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the business is, therefore, generally not constitutive of constructive dismissal. Thus, the consequent transfer of Tryco’s personnel, assigned to the Production Department was well within the scope of its management prerogative. Same; Same; Same; Employer must show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee, nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits.—When the transfer is not unreasonable, or

inconvenient, or prejudicial to the employee, and it does not involve a demotion in rank or diminution of salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal. However, the employer has the burden of proving that the transfer of an employee is for valid and legitimate grounds. The employer must show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Same; Same; Same; Mere incidental inconvenience is not sufficient to warrant a claim of constructive dismissal.—In the instant case, the transfer orders do not entail a demotion in rank or diminution of salaries, benefits and other privileges of the petitioners. Petitioners, therefore, anchor their objection solely on the ground that it would cause them great inconvenience since they are all residents of Metro Manila and they would incur additional expenses to travel daily from Manila to Bulacan. The Court has previously declared that mere incidental inconvenience is not sufficient to warrant a claim of constructive dismissal. Objection to a transfer that is grounded 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. Same; Unfair Labor Practices; Collective Bargaining Agreement; Unfair labor practice refers to acts that violate the workers’ right to organize; Without that element, the acts, no matter how unfair, are not unfair labor practices.—There was no showing or any indication that the transfer orders were motivated by an intention to interfere with the petitioners’ right to organize. Unfair labor practice refers to acts that violate the workers’ right to organize. With the exception of Article 248(f) of the Labor Code of the Philippines, the prohibited acts are related to the workers’ right to self-organization and to the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor practices. J. G.R. No. 157680 October 8, 2008 EQUIPMENT TECHNICAL SERVICES or JOSEPH JAMES DEQUITO, vs. COURT OF APPEALS, ALEX ALBINO et al. Labor Law; Project Employees; The service of project employees are coterminous with the project and may be terminated upon the end or completion of that project or project phase for which they were hired;

The principal test for determining whether an employee is properly characterized as “project employee” as distinguished from “regular employee” is whether or not “the project employee” was assigned to carry out “a specific project or undertaking” the duration and scope of which were specified at the time the employees were engaged for that project; Definition of a Regular Employee vis-à-vis a Project Employee.—As the Court has consistently held, the service of project employees are coterminus with the project and may be terminated upon the end or completion of that project or project phase for which they were hired. Regular employees, in contrast, enjoy security of tenure and are entitled to hold on to their work or position until their services are terminated by any of the modes recognized under the Labor Code. The principal test for determining whether an employee is properly characterized as “project employee,” as distinguished from “regular employee,” is whether or not “the project employee” was assigned to carry out “a specific project or undertaking,” the duration and scope of which were specified at the time the employees were engaged for that project. And as Article 280 of the Labor Code, defining a regular employee vis-à-vis a project employee, would have it: Art. 280. Regular and casual employment.—The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee x x x. Same; Same; Where the employment of project employees is extended long after the supposed project had been finished, the employees are removed from the scope of project employees and they shall be considered regular employees.—The Court can allow that, in the instant case, private respondents may have initially been hired for specific projects or undertaking of petitioner ETS and, hence, may be classified as project employees. Their repeated rehiring to perform tasks necessary to the usual trade or business of ETS changed the legal situation altogether, for in the later instance, their continuous rehiring took them out from the scope of workers coterminus with specific projects and had made them regular employees. We said as much in Phesco, Inc. v. NLRC, 239 SCRA 446 (1994), that “where the employment of project employees is extended long after the supposed project had been finished, the employees are removed

from the scope of project employees and they shall be considered regular employees.” Same; Same; The constitutionally protected right of labor to security of tenure covers both regular and project workers; Their termination must be for lawful cause and must be done in a way which affords them proper notice and hearing.—Petitioners’ assertion that there can be no illegal dismissal of project employees inasmuch as they are not entitled to security of tenure is inaccurate. The constitutionally-protected right of labor to security of tenure covers both regular and project workers. Their termination must be for lawful cause and must be done in a way which affords them proper notice and hearing. Same; Illegal Dismissals; Where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal.—In termination disputes, the burden of proving that an employee had been dismissed for a lawful cause or that the exacting procedural requirements under the Labor Code had been complied with lies with the employer. Where there is no showing of a clear, valid, and legal cause for termination of employment, the law considers the case a matter of illegal dismissal. K. G.R. No. 195466 July 2, 2014 ARIEL L. DAVID, doing business under the name and style “YIELS HOG DEALER,” vs. JOHN G. MACASIO Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; In this Rule 45 petition for review on certiorari of the Court of Appeals’ (CA’s) decision rendered under a Rule 65 proceeding, the Supreme Court’s (SC’s) power of review is limited to resolving matters pertaining to any perceived legal errors that the CA may have committed in issuing the assailed decision.—In this Rule 45 petition for review on certiorari of the CA’s decision rendered under a Rule 65 proceeding, this Court’s power of review is limited to resolving matters pertaining to any perceived legal errors that the CA may have committed in issuing the assailed decision. This is in contrast with the review for jurisdictional errors, which we undertake in an original certiorari action. In reviewing the legal correctness of the CA decision, we examine the CA decision based on how it determined the presence or absence of grave abuse of discretion in the NLRC decision before it and not on the basis of whether the NLRC decision on the merits of the case was correct. In other

words, we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. Labor Law; Pakyaw Basis; Engagement on “pakyaw” or task basis does not characterize the relationship that may exist between the parties, i.e., whether one of employment or independent contractorship.— Engagement on “pakyaw” or task basis does not characterize the relationship that may exist between the parties, i.e., whether one of employment or independent contractorship. Article 97(6) of the Labor Code defines wages as “x x x the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered[.]” In relation to Article 97(6), Article 101 of the Labor Code speaks of workers paid by results or those whose pay is calculated in terms of the quantity or quality of their work output which includes “pakyaw” work and other non-time work. Same; Employer-Employee Relationship; Elements of.—To determine the existence of an employer-employee relationship, four elements generally need to be considered, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct. These elements or indicators comprise the so-called “four-fold” test of employment relationship. Macasio’s relationship with David satisfies this test. Same; Pakyaw Basis; A distinguishing characteristic of “pakyaw” or task basis engagement, as opposed to straight-hour wage payment, is the non-consideration of the time spent in working.—A distinguishing characteristic of “pakyaw” or task basis engagement, as opposed to straight-hour wage payment, is the non-consideration of the time spent in working. In a task-basis work, the emphasis is on the task itself, in the sense that payment is reckoned in terms of completion of the work, not in terms of the number of time spent in the completion of work. Once the work or task is completed, the Same; Holiday Pay; Service Incentive Leave Pay; Field Personnel; Under the Implementing Rules and Regulations (IRR), exemption from the coverage of holiday and Service Incentive Leave (SIL) pay refer to “field personnel and other employees whose time and performance is unsupervised by the employer including those who are

engaged on task or contract basis.”—The general rule is that holiday and SIL pay provisions cover all employees. To be excluded from their coverage, an employee must be one of those that these provisions expressly exempt, strictly in accordance with the exemption. Under the IRR, exemption from the coverage of holiday and SIL pay refer to “field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis[.]” Note that unlike Article 82 of the Labor Code, the IRR on holiday and SIL pay do not exclude employees “engaged on task basis” as a separate and distinct category from employees classified as “field personnel.” Rather, these employees are altogether merged into one classification of exempted employees. Because of this difference, it may be argued that the Labor Code may be interpreted to mean that those who are engaged on task basis, per se, are excluded from the SIL and holiday payment since this is what the Labor Code provisions, in contrast with the IRR, strongly suggest. The arguable interpretation of this rule may be conceded to be within the discretion granted to the LA and NLRC as the quasi-judicial bodies with expertise on labor matters. Same; Same; Same; Same; Pakyaw Basis; The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of Service Incentive Leave (SIL) and holiday pay.—The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of SIL and holiday pay. They are exempted from the coverage of Title I (including the holiday and SIL pay) only if they qualify as “field personnel.” The IRR therefore validly qualifies and limits the general exclusion of “workers paid by results” found in Article 82 from the coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded workers who are paid by results from the coverage of Title I is “determined by the Secretary of Labor in appropriate regulations.” Same; Same; Same; Same; In determining whether workers engaged on “pakyaw” or task basis is entitled to holiday and Service Incentive Leave (SIL) pay, the presence (or absence) of employer supervision as regards the worker’s time and performance is the key.—In determining whether workers engaged on “pakyaw” or task basis is entitled to holiday and SIL pay, the presence (or absence) of employer supervision as regards the worker’s time and performance is the key: if the worker is simply engaged on pakyaw or task basis, then the general rule is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically provided under Article 94 (holiday pay) and Article 95 (SIL pay)

of the Labor Code. However, if the worker engaged on pakyaw or task basis also falls within the meaning of “field personnel” under the law, then he is not entitled to these monetary benefits. Same; 13th Month Pay; As with holiday and service incentive leave pay, 13th month pay benefits generally cover all employees; an employee must be one of those expressly enumerated to be exempted. Section 3 of the Rules and Regulations Implementing Presidential Decree (P.D.) No. 851 enumerates the exemptions from the coverage of 13th month pay benefits.—The governing law on 13th month pay is PD No. 851. As with holiday and SIL pay, 13th month pay benefits generally cover all employees; an employee must be one of those expressly enumerated to be exempted. Section 3 of the Rules and Regulations Implementing P.D. No. 851 enumerates the exemptions from the coverage of 13th month pay benefits. Under Section 3(e), “employers of those who are paid on x x x task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof” are exempted. Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD No. 851 exempts employees “paid on task basis” without any reference to “field personnel.” This could only mean that insofar as payment of the 13th month pay is concerned, the law did not intend to qualify the exemption from its coverage with the requirement that the task worker be a “field personnel” at the same time.

V.

Pages 304 to 409 Labor Code Labor Advisory Bpard on Payment of Salalries thru ATM Department Order No. 174 Wage Order No. NCR – 21 and it Implementing Rules

CASES:

A. G.R. No. 198783 April 15, 2013 ROYAL PLANT WORKERS UNION vs. COCA-COLA BOTTLERS PHILIPPINES, INC.-CEBU PLANT

Remedial Law; Civil Procedure; Appeals; Voluntary Arbitrators; A decision or award of a voluntary arbitrator is appealable to the Court of Appeals (CA) via a petition for review under Rule 43.―This procedural issue being debated upon is not novel. The Court has already ruled in a number of cases that a decision or award of a voluntary arbitrator is appealable to the CA via a petition for review under Rule 43. The recent case of Samahan Ng Mga Manggagawa Sa Hyatt (SAMASAH-NUWHRAIN) v. Hon. Voluntary Arbitrator Buenaventura C. Magsalin and Hotel Enterprises of the Philippines, 650 SCRA 445 (2011), reiterated the well-settled doctrine on this issue. Labor Law; Management Prerogatives; The Court has held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place, and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers, and discipline, dismissal and recall of workers.—The Court has held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place, and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers, and discipline, dismissal and recall of workers. The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of labor. Same; Labor Standards; There is no law that requires employers to provide chairs for bottling operators. The Labor Code, specifically Article 132 thereof, only requires employers to provide seats for women. No similar requirement is mandated for men or male workers.—The rights of the Union under any labor law were not violated. There is no law that requires employers to provide chairs for bottling operators. The CA correctly ruled that the Labor Code, specifically Article 132 thereof, only requires employers to provide seats for women. No similar requirement is mandated for men or male workers. It must be stressed that all concerned bottling operators in this case are men. There was no violation either of the Health, Safety and Social Welfare Benefit provisions under Book IV of the Labor Code of the Philippines. As shown in the foregoing, the removal of the chairs was compensated by the reduction of the working hours and increase

in the rest period. The directive did not expose the bottling operators to safety and health hazards. The Union should not complain too much about standing and moving about for one and one-half (1 ½) hours because studies show that sitting in workplaces for a long time is hazardous to one’s health. The report of VicHealth, Australia, disclosed that “prolonged workplace sitting is an emerging public health and occupational health issue with serious implications for the health of our working population. Importantly, prolonged sitting is a risk factor for poor health and early death, even among those who meet, or exceed, national activity guidelines.” Same; Same; Non-Diminution of Benefits; The operators’ chairs cannot be considered as one of the employee benefits covered in Article 100 of the Labor Code. In the Court’s view, the term “benefits” mentioned in the non-diminution rule refers to monetary benefits or privileges given to the employee with monetary equivalents. Such benefits or privileges form part of the employees’ wage, salary or compensation making them enforceable obligations.—The operators’ chairs cannot be considered as one of the employee benefits covered in Article 100 of the Labor Code. In the Court’s view, the term “benefits” mentioned in the nondiminution rule refers to monetary benefits or privileges given to the employee with monetary equivalents. Such benefits or privileges form part of the employees’ wage, salary or compensation making them enforceable obligations. This Court has already decided several cases regarding the non-diminution rule where the benefits or privileges involved in those cases mainly concern monetary considerations or privileges with monetary equivalents. Some of these cases are: Eastern Telecommunication Phils. Inc. v. Eastern Telecoms Employees Union, 665 SCRA 516 (2012), where the case involves the payment of 14th, 15th and 16th month bonuses; Central Azucarera De Tarlac v. Central Azucarera De Tarlac Labor Union-NLU, 625 SCRA 622 (2010), regarding the 13th month pay, legal/special holiday pay, night premium pay and vacation and sick leaves; TSPIC Corp. v. TSPIC Employees Union, 545 SCRA 215 (2008), regarding salary wage increases; and American Wire and Cable Daily Employees Union vs. American Wire and Cable Company, Inc., 457 SCRA 684 (2005), involving service awards with cash incentives, premium pay, Christmas party with incidental benefits and promotional increase. Same; Management Prerogatives; The Supreme Court often declines to interfere in legitimate business decisions of employers.

The law must protect not only the welfare of the employees, but also the right of the employers.—Jurisprudence recognizes the exercise of management prerogatives. Labor laws also discourage interference with an employer’s judgment in the conduct of its business. For this reason, the Court often declines to interfere in legitimate business decisions of employers. The law must protect not only the welfare of the employees, but also the right of the employers. B. G.R. No. 145402 March 14, 2008 MERALCO INDUSTRIAL ENGINEERING SERVICES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, OFELIA P. LANDRITO GENERAL SERVICES and/or OFELIA P. LANDRITO Judgments; Law of the Case; Words and Phrases; Law of the case has been defined as the opinion delivered on a former appeal—it is a term applied to an established rule that when an appellate court passes on a question and remands the case to the lower court for further proceedings, the question there settled becomes the law of the case upon subsequent appeal.—Law of the case has been defined as the opinion delivered on a former appeal. It is a term applied to an established rule that when an appellate court passes on a question and remands the case to the lower court for further proceedings, the question there settled becomes the law of the case upon subsequent appeal. It means that whatever is once irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be the facts of the case before the court. Indeed, courts must adhere thereto, whether the legal principles laid down were “correct on general principles or not” or “whether the question is right or wrong” because public policy, judicial orderliness and economy require such stability in the final judgments of courts or tribunals of competent jurisdiction. Labor Law; Labor Standards; Independent Contractors; Indirect Employers; An indirect employer (as defined by Article 107 of the Labor Code) can only be held solidarily liable with the independent contractor or subcontractor (as provided under Article 109) in the event that the latter fails to pay the wages of its employees (as described in Article 106)—it cannot be held liable in the same way

as the employer in every respect but only for purposes of unpaid wages.—The Court of Appeals indeed erred when it ruled that the petitioner was jointly and solidarily liable with the private respondents as regards the payment of separation pay. The appellate court used as basis Article 109 of the Labor Code, as amended, in holding the petitioner solidarily liable with the private respondents for the payment of separation pay: ART. 109. Solidary Liability.—The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. [Emphasis supplied]. However, the afore-quoted provision must be read in conjunction with Articles 106 and 107 of the Labor Code, as amended. Article 107 of the Labor Code, as amended, defines an indirect employer as “any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.” To ensure that the contractor’s employees are paid their appropriate wages, Article 106 of the Labor Code, as amended, provides: ART. 106. CONTRACTOR OR SUBCONTRACTOR.—x x x. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. [Emphasis supplied]. Taken together, an indirect employer (as defined by Article 107) can only be held solidarily liable with the independent contractor or subcontractor (as provided under Article 109) in the event that the latter fails to pay the wages of its employees (as described in Article 106). Hence, while it is true that the petitioner was the indirect employer of the complainants, it cannot be held liable in the same way as the employer in every respect. The petitioner may be considered an indirect employer only for purposes of unpaid wages. Same; Same; Same; Same; Backwages; The only instance when the principal can also be held liable with the independent contractor or subcontractor for the backwages and separation pay of the latter’s employees is when there is proof that the principal conspired with the independent contractor or subcontractor in the illegal dismissal of the employees.—There is no question that private respondents are operating as an independent contractor and that the

complainants were their employees. There was no employer-employee relationship that existed between the petitioner and the complainants and, thus, the former could not have dismissed the latter from employment. Only private respondents, as the complainants’ employer, can terminate their services, and should it be done illegally, be held liable therefor. The only instance when the principal can also be held liable with the independent contractor or subcontractor for the backwages and separation pay of the latter’s employees is when there is proof that the principal conspired with the independent contractor or subcontractor in the illegal dismissal of the employees. Same; Same; Same; Same; Obligations and Contracts; It is basic that a contract is the law between the parties and the stipulations therein, provided that they are not contrary to law, morals, good customs, public order or public policy, shall be binding as between the parties—if the contract does not provide for a particular liability, the Court cannot just read the same into the contract without possibly violating the intention of the parties.—Neither can the liability for the separation pay of the complainants be extended to the petitioner based on contract. Contract Order No. 166-84 executed between the petitioner and the private respondents contains no provision for separation pay in the event that the petitioner terminates the same. It is basic that a contract is the law between the parties and the stipulations therein, provided that they are not contrary to law, morals, good customs, public order or public policy, shall be binding as between the parties. Hence, if the contract does not provide for such a liability, this Court cannot just read the same into the contract without possibly violating the intention of the parties. Same; Same; Same; Same; The joint and several liability of the principal with the contractor and subcontractor was enacted to ensure compliance with the provisions of the Labor Code, principally those on statutory minimum wage, facilitating, if not guaranteeing, payment of the workers’ compensation, thus, giving the workers ample protection as mandated by the 1987 Constitution; While the Supreme Court had previously ruled that the indirect employer can recover whatever amount it had paid to the employees in accordance with the terms of the service contract between itself and the contractor, the said ruling cannot be applied in reverse to this case as to allow the independent contractor, who paid for the judgment awards in full, to recover from the indirect employer.—In this case, however, private

respondents had already posted a surety bond in an amount sufficient to cover all the judgment awards due the complainants, including those for underpayment of wages and non-payment of overtime pay. The joint and several liability of the principal with the contractor and subcontractor were enacted to ensure compliance with the provisions of the Labor Code, principally those on statutory minimum wage. This liability facilitates, if not guarantees, payment of the workers’ compensation, thus, giving the workers ample protection as mandated by the 1987 Constitution. With private respondents’ surety bond, it can therefore be said that the purpose of the Labor Code provision on the solidary liability of the indirect employer is already accomplished since the interest of the complainants are already adequately protected. Consequently, it will be futile to continuously hold the petitioner jointly and solidarily liable with the private respondents for the judgment awards for underpayment of wages and non-payment of overtime pay. But while this Court had previously ruled that the indirect employer can recover whatever amount it had paid to the employees in accordance with the terms of the service contract between itself and the contractor, the said ruling cannot be applied in reverse to this case as to allow the private respondents (the independent contractor), who paid for the judgment awards in full, to recover from the petitioner (the indirect employer). C. G.R. No. 146408 February 29, 2008 PHILIPPINE AIRLINES, INC., vs. ENRIQUE LIGAN, EMELITO SOCO et al. Labor Law; Labor-Only Contracting; Legitimate contracting and labor-only contracting are defined in Department Order (D.O.) No. 18-02, series of 2002 (Rules Implementing Articles 106 to 109 of the Labor Code, as amended).—Legitimate contracting and labor-only contracting are defined in Department Order (D.O.) No. 18-02, Series of 2002 (Rules Implementing Articles 106 to 109 of the Labor Code, as amended) as follows: Section 3. Trilateral relationship in contracting arrangements. In legitimate contracting, there exists a trilateral relationship under which there is a contract for a specific job, work or service between the principal and the contractor or subcontractor, and a contract of employment between the contractor or subcontractor and its workers. Hence, there are three parties involved in these arrangements, the principal which decides to farm out a job or service to a contractor or subcontractor, the contractor or subcontractor which

has the capacity to independently undertake the performance of the job, work or service, and the contractual workers engaged by the contractor or subcontractor to accomplish the job, work or service. (Emphasis and italics supplied) Section 5. Prohibition against laboronly contracting.—Labor-only contracting is hereby declared prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are [sic] present: (i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; OR (ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee. Same; Same; For labor-only contracting to exist, Section 5 of D.O. No. 18-02 requires any two of the elements to be present.—For labor-only contracting to exist, Section 5 of D.O. No. 18-02 which requires any of two elements to be present is, for convenience, requoted: (i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal, OR (ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee. Same; Same; One who claims to be an independent contractor has to prove that he contracted to do the work according to his own methods and without being subject to the employer’s control except only as to the results.—One who claims to be an independent contractor has to prove that he contracted to do the work according to his own methods and without being subject to the employer’s control except only as to the results. Same; Same; Respondents having performed tasks which are usually necessary and desirable in the air transportation business of petitioner, they should be deemed its regular employees and Synergy as a labor-only contractor.—Respondents having performed tasks which are usually necessary and desirable in the air

transportation business of petitioner, they should be deemed its regular employees and Synergy as a labor-only contractor. The express provision in the Agreement that Synergy was an independent contractor and there would be “no employer-employee relationship between [Synergy] and/or its employees on one hand, and [petitioner] on the other hand” is not legally binding and conclusive as contractual provisions are not valid determinants of the existence of such relationship. For it is the totality of the facts and surrounding circumstances of the case which is determinative of the parties’ relationship. D. G.R. No. 177785 September 3, 2008 RANDY ALMEDA, EDWIN M. AUDENCIAL, NOLIE D. RAMIREZ, ERNESTO M. CALICAGAN and REYNALDO M. CALICAGAN, vs. ASAHI GLASS PHILIPPINES, INC., Labor Law; Subcontracting; Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out to a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal.—Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out to a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur: (a) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof; (b) The contractor or subcontractor has substantial capital or investment; and (c) The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits.

Same; Labor-only Contracting; Labor-only contracting, a prohibited act, is an arrangement in which the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal.—On the other hand, labor-only contracting, a prohibited act, is an arrangement in which the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. In labor-only contracting, the following elements are present: (a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility; (b) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. In labor-only contracting, the statutes create an employer-employee relationship for a comprehensive purpose: to prevent circumvention of labor laws. The contractor is considered as merely the agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees are directly employed by the principal employer. Therefore, if SSASI was a labor-only contractor, then respondent shall be considered as the employer of petitioners who must bear the liability for the dismissal of the latter, if any. Same; Job Contracting; An important element of legitimate job contracting is that the contractor has substantial capital or investment, which respondent failed to prove.—An important element of legitimate job contracting is that the contractor has substantial capital or investment, which respondent failed to prove. There is a dearth of evidence to prove that SSASI possessed substantial capital or investment when respondent began contractual relations with it more than a decade before 2003. Respondent’s bare allegations, without supporting proof that SSASI had substantial capital or investment, do not sway this Court. The Court did not find a single financial statement or record to attest to the economic status and financial capacity of SSASI to venture into and sustain its own business independent from petitioner. Same; Employer-Employee Relationship; It is not essential for the employer to actually supervise the performance of duties of the employee; it is enough that the former has a right to wield the power.—The Court finds that the crucial element of control over petitioners rested in respondent. The power of control refers to the

authority of the employer to control the employee not only with regard to the result of work to be done, but also to the means and methods by which the work is to be accomplished. It should be borne in mind that the power of control refers merely to the existence of the power and not to the actual exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the employee; it is enough that the former has a right to wield the power. Same; Labor-only Contracting; San Sebastian Allied Services, Inc. (SSASI) is a labor-only contractor; hence, it is considered as the agent of respondent.—Despite respondent’s disavowal of the existence of an employer-employee relationship between it and petitioners and its unyielding insistence that petitioners were employees of SSASI, the totality of the facts and the surrounding circumstances of the case convey otherwise. SSASI is a labor-only contractor; hence, it is considered as the agent of respondent. Respondent is deemed by law as the employer of petitioners. Surely, respondent cannot expect this Court to sustain its stance and accord full evidentiary weight to the documentary evidence belatedly procured in its vain attempt to evade liability as petitioners’ employer. Same; Same; A party cannot dictate, by the mere expedient of a unilateral declaration in a contract, the character of its business, i.e., whether as labor–only contractor or as job contractor, it being crucial that its character be measured in terms of and determined by the criteria set by statute.—Equally unavailing is respondent’s stance that its relationship with petitioners should be governed by the Accreditation Agreement stipulating that petitioners were to remain employees of SSASI and shall not become regular employees of the respondent. To permit respondent to disguise the true nature of its transactions with SSASI by the terms of its contract, for the purpose of evading its liabilities under the law, would seriously impair the administration of justice. A party cannot dictate, by the mere expedient of a unilateral declaration in a contract, the character of its business, i.e., whether as labor-only contractor or as job contractor, it being crucial that its character be measured in terms of and determined by the criteria set by statute. Same; Same; Since San Sebastian Allied Services, Inc. (SSASI) was a labor-only contractor, and petitioners were to be deemed the employees of respondent, then the said reason would not constitute a just or authorized cause for petitioners’ dismissal.—

The sole reason given for the dismissal of petitioners by SSASI was the termination of its service contract with respondent. But since SSASI was a labor-only contractor, and petitioners were to be deemed the employees of respondent, then the said reason would not constitute a just or authorized cause for petitioners’ dismissal. It would then appear that petitioners were summarily dismissed based on the afore-cited reason, without compliance with the procedural due process for notice and hearing. E. G.R. No. 168537 December 11, 2008 DAMIAN AKLAN et al vs. SAN MIGUEL CORPORATION, BMA PHILASIA, INC., and ARLENE EUSEBIO Labor Law; Labor-Only Contracting; Employer-Employee Relationship; The existence of an employer-employee relationship is ultimately a question of fact and the findings by the Labor Arbiter and the National Labor Relations Commission (NLRC) on that score shall be accorded not only respect but even finality when supported by ample evidence.—A finding that a contractor is a “labor-only” contractor, as opposed to permissible job contracting, is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of the supposed contractor, and the “labor-only” contractor is considered as a mere agent of the principal, the real employer. Both the Labor Arbiter and the NLRC found that the employment contracts of petitioners duly prove that an employer-employee relationship existed between petitioners and BMA. We hasten to add that the existence of an employer-employee relationship is ultimately a question of fact and the findings by the Labor Arbiter and the NLRC on that score shall be accorded not only respect but even finality when supported by ample evidence. Same; Same; Same; Elements to determine the existence of an employer-employee relationship.—In its ruling, the NLRC considered the following elements to determine the existence of an employeremployee relationship: (1) the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and (4) the power to control the worker’s conduct. All four elements were found by the NLRC to be vested in BMA. This NLRC finding was affirmed by the CA.

Same; Quitclaims; Unless there is a showing that the employee signed involuntarily or under duress, quitclaims and releases are upheld by the Court as the law between the parties.—Unless there is a showing that the employee signed involuntarily or under duress, quitclaims and releases are upheld by this Court as the law between the parties. If the agreement was voluntarily entered into by the employee, with full understanding of what he was doing, and represents a reasonable settlement of the claims of the employee, it is binding on the parties and may not be later disowned simply because of a change of mind. VI

Pages 410 to 499 Labor Code Pages 137 – 182 Special Laws RA 10151 Employment of Night Workers RA 10361 Domestic Workers Act

VII

Pages 507 to 584 Labord Code

VIII

Pages 585 to 664 – Labor Code

RA 9165 – The Comprehensive Dangerous Drug Act Art. V and VI RA8504 – The Philippines Aids Prevention and Control Act of 1998, Section 6, 15, 16, 30, 31, 32, 35, and 45.

XI

Pages 211 to 324 Cases:

A. No. L-15045 January 20, 1961 IN RE PETITION FOR EXEMPTION FROM COVERAGE BY THE SOCIAL SECURITY SYSTEM. ROMAN CATHOLIC ARCHBISHOP OF MANILA vs. SOCIAL SECURITY COMMISSION

Social security; Scope of coverage.—The coverage of the Social Security Law is predicated on the existence of an employeremployee relationship of more or less permanent nature and extends to employment of all kinds except those expressly excluded. Statutes; Ejusdem generis.—The rule of ejusdem generis applies only where there is uncertainty. It is not controlling where there the plain purpose and intent of the lawmaking body would thereby be hindered and defeated. Same; Social security; "Employer" includes charitable and religious organizations.—The rule of ejusdem generis does not apply to the definition of the term "employer" in the Social Security Law. That definition is sufficiently comprehensive as to include religious and charitable institutions or entities, not organized for profit. It includes the Catholic Charities and all religious and charitable institutions and organizations directly or indirectly operated by the Roman Catholic Archbishop of Manila. Same; Statutes; Effect of exception and amendment.—The inclusion of religious and charitable institutions, not organized for profit, within the definition of the term "employer" in the Social Security Law is shown by the circumstance that said institutions are not included in the exception contained in said definition and by the fact that, while in the original law, services performed for religious and charitable institutions were expressly excluded from the coverage of the law, in the amendment, that portion of the law was deleted. Same; Social Security Law and Industrial Peace Act contrasted.—The rule, that the Industrial Peace Act applies only to industry and occupation for purposes of profit and gain, is not applicable to the Social Security Law because the Industrial Peace Act expressly limits its application to commercial, industrial or agricultural establishments or enterprises. Constitutional law; Social Security System involves private funds.—The inclusion of religious organizations within the coverage of the Social Security Law does not violate the constitutional prohibition against the application of public funds for the use, benefit or support of any priest employed by a

religious organization. The funds contributed to the Social Security System are not public funds but funds belonging to the members which are merely held in trust by the Government. Even assuming that said funds are impressed with a public character, nevertheless, their payment as retirement, death or disability benefits would not violate the said constitutional prohibition since such payment would be made to the priest, not because he is a priest but because he is an employee. Religious organizations; Freedom to disseminate religious information; Social security; Purpose; Constitutional mandate.—The inclusion of religious organizations within the coverage of the Social Security Law would not impair their right to disseminate religious information. Their monthly contributions, together with the employees' contributions, are intended for the protection of said employees against the hazards of disability, sickness, old age and death, This is in line with the constitutional mandate to promote social justice to insure the wellbeing and economic security of all the people. B. No. L-21448 August 30, 1967 POBLETE CONSTRUCTION Co., vs. JUDITH ASIAIN, SOCIAL SECURITY COMMISSION and BENITO MACRHON, in his capacity as Sheriff of Rizal Employer and employee; Social Security; Employer's duty to report employee's name, etc. to Social Security System.—It is the duty of the employer to "report immediately to the System" the employee's name, age, civil status, occupation, salary and dependents. Compliance with this duty does not depend upon the employee's willingness to give his share of the contribution. Section 24 of the Social Security Act is mandatory, to such an extent, that if the employee should die or become sick or disabled without the report having been made by the employer, the latter is liable for an amount equivalent to the benefits to which the employee would have been entitled had such report been made. Same; The term "claims" in Section 5(a) of Social Security Act includes claim for "damages" under Section 24 thereof.— Section 5(a) of the Social Security Act provides that "the filing, determination and settlement of claims shall be governed by the

rules and regulations promulgated by the Commission"; and the rules and regulations thus promulgated state that "the effectivity of membership in the System, as well as the final determination and settlement of claims, shall be vested in the Commission." the term "claims" is broad enough to include a claim for "damages" under Section 24. Otherwise, an employer could nullify the jurisdiction of the Commission by the simple expedient of not making a report as required by said Section. Same; Collection of employee's share is duty imposed by law on the employer.—The collection of the employee's share is a duty imposed by law, and his unwillingness to have it deducted from his salary does not excuse the employer's failure to make the report required under Section 24 of" the law. C. G.R. No. 119891 August 21, 1995 BEN STA. RITA, petitioner, vs. THE COURT OF APPEALS, THE PEOPLE OF THE PHILIPPINES and THE SOCIAL SECURITY SYSTEM Appeals; The right to appeal is a statutory right and a party who seeks to avail of the right must comply with the rules.— It is well-settled in our jurisdiction that the right to appeal is a statutory right and a party who seeks to avail of the right must comply with the rules. These rules, particularly the statutory requirement for perfecting an appeal within the reglementary period laid down by law, must be strictly followed as they are considered indispensable interdictions against needless delays and for orderly discharge of judicial business. Petitioner’s failure to seasonably file the Petition and its failure to comply with the aforequoted Circulars of the Court necessitate the denial of the Petition. Social Security Law; Criminal Procedure; Pleadings and Practice; The information is sufficient where it clearly states the designation of the offense by the statute and the acts or omissions complained of as constituting the offense.—The Court agrees with the CA that the Information filed against petitioner was sufficient as it clearly stated the designation of the offense by the statute, i.e. violation of the Social Security Law, and the acts or omissions complained of as constituting the

offense, i.e., petitioner’s failure to remit his contributions to the SSS. The CA found that there is prima facie evidence to support the allegations in the Information and to warrant the prosecution of petitioner. Same; Labor Law; Overseas Contract Workers; Seamen; The Memorandum of Agreement between the Social Security System and the Department of Labor and Employment providing for coverage of Filipino seafarers by the SSS is not an implementing rule or regulation of the Social Security Commission which is subject to approval of the President— the Agreement relates simply to the administrative convenience of the two agencies of government.—What the Memorandum of Agreement did was to record the understanding between the SSS on the one hand and the DOLE on the other hand that the latter would include among the provisions of the Standard Contract of Employment required in case of overseas employment, a stipulation providing for coverage of the Filipino seafarer by the SSS. The Memorandum of Agreement is not an implementing rule or regulation of the Social Security Commission which, under Section 4(a) abovequoted, is subject to the approval of the President. Indeed, as a matter of strict law, the participation of the SSS in the establishment by the DOLE of a uniform stipulation in the Standard Contract of Employment for Filipino seafarers was not necessary; the Memorandum of Agreement related simply to the administrative convenience of the two (2) agencies of government. Same; Same; Same; Same; Section 8(j)(5) of R.A. No. 1161, as amended, simply defines the term “employment” and does not in any way relate to the scope of coverage of the Social Security System.—Moreover, the Court finds no merit in petitioner’s contention that Section 8 (j) (5) of R.A. No. 1161, as amended, absolutely exempts Filipino seafarers on board foreign vessels from the coverage of the SSS statute. Section 8 (j) (5) simply defines the term “employment” and does not in any way relate to the scope of coverage of the Social Security System. That coverage is, upon the other hand, set out in Section 9 of R.A. No. 1161 as amended, which defines the scope of SSS coverage. Same; Same; Same; Same; The extension of the coverage of the Social Security System to Filipino seafarers arises by

virtue of the assent given in the contract of employment signed by the employer and seafarer.—Thus, the Standard Contract of Employment to be entered into between foreign shipowners and Filipino seafarers is the instrument by which the former express their assent to the inclusion of the latter in the coverage of the Social Security Act. In other words, the extension of the coverage of the Social Security System to Filipino seafarers arises by virtue of the assent given in the contract of employment signed by employer and seafarer; that same contract binds petitioner Sta. Rita or B. Sta. Rita Company, who is solidarily liable with the foreign shipowners/employers. Same; Same; Same; Same; Foreign shipowners and manning agencies had generally expressed their conformity to the inclusion of Filipino seafarers within the coverage of the Social Security Act.—It may be noted that foreign shipowners and manning agencies had generally expressed their conformity to the inclusion of Filipino seafarers within the coverage of the Social Security Act even prior to the signing of the DOLE-SSS Memorandum of Agreement. Same; Same; Same; Same; Protection to Labor; By extending the benefits of the Social Security Act to Filipino seafarers on board foreign vessels, the individual employment agreements entered into with the stipulation for such coverage contemplated in the DOLE-SSS Memorandum of Agreement merely give effect to the constitutional mandate to the State to afford protection to labor.—It is, finally, worthy of special note that by extending the benefits of the Social Security Act to Filipino seafarers on board foreign vessels, the individual employment agreements entered into with the stipulation for such coverage contemplated in the DOLE-SSS Memorandum of Agreement, merely give effect to the constitutional mandate to the State to afford protection to labor whether “local or overseas.” Nullification of the SSS stipulation in those individual employment contracts, through nullification of the Memorandum of Agreement, constituted serious reversible error on the part of the trial court. That petitioner should seek to deprive his countrymen of social security protection after his foreign principal had agreed to such protection, is cause for dismay and is to be deplored.

Constitutional Law; Criminal Procedure; Double Jeopardy; Reinstatement of a criminal case does not violate the right against double jeopardy where the dismissal of the information by the trial court had been effected at the instance of the accused.—The Court of Appeals properly held that the reinstatement of the criminal case against petitioner did not violate his right against double jeopardy since the dismissal of the information by the trial court had been effected at his own instance. There are only two (2) instances where double jeopardy will attach notwithstanding the fact that the case was dismissed with the express consent of the accused. The first is where the ground for dismissal is insufficiency of evidence for the prosecution; and the second is where the criminal proceedings have been unreasonably prolonged in violation of the accused’s right to speedy trial. Neither situation exists in the case at bar. There is no legal impediment to the reinstatement of Criminal Case No. Q-92-35426 against petitioner Sta. Rita. Sta. Rita vs. Court of Appeals, 247 SCRA 484, G.R. No. 119891 August 21, 1995 D. G.R. No. 125837 October 6, 2004 REYNALDO CANO CHUA, doing business under the name & style PRIME MOVER CONSTRUCTION DEVELOPMENT, vs. COURT OF APPEALS, SOCIAL SECURITY COMMISSION, SOCIAL SECURITY SYSTEM, ANDRES PAGUIO et al. Labor Law; Social Security System; Petition for Review; The Supreme Court’s jurisdiction in a petition for review is limited to reviewing or revising errors of law allegedly committed by the appellate court.—Well-entrenched is the rule that the Supreme Court’s jurisdiction in a petition for review is limited to reviewing or revising errors of law allegedly committed by the appellate court, the findings Same; Same; Employment; Employer-Employee Relationship; Elements; The mandatory coverage of Republic Act No. 1161, as amended, is premised on the existence of an employer-employee relationship.—The Social Security Act was enacted pursuant to the policy of the government “to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the laborers throughout the

Philippines, and shall provide protection against the hazards of disability, sickness, old age and death.” It provides for compulsory coverage of all employees not over sixty years of age and their employers. Well-settled is the rule that the mandatory coverage of Republic Act No. 1161, as amended, is premised on the existence of an employer-employee relationship, the essential elements of which are: (a) selection and engagement of the employee; (b) payment of wages; (c) the power of dismissal; and (d) the power of control with regard to the means and methods by which the work is to be accomplished, with the power of control being the most determinative factor. Same; Same; Same; Same; Control Test; It is clear that private respondents are employees of petitioner, the latter having control over the results of the work done, as well as the means and methods by which the same were accomplished.— It is clear that private respondents are employees of petitioner, the latter having control over the results of the work done, as well as the means and methods by which the same were accomplished. Suffice it to say that regardless of the nature of their employment, whether it is regular or project, private respondents are subject of the compulsory coverage under the SSS Law, their employment not falling under the exceptions provided by the law. This rule is in accord with the Court’s ruling in Luzon Stevedoring Corp. v. SSS to the effect that all employees, regardless of tenure, would qualify for compulsory membership in the SSS, except those classes of employees contemplated in Section 8(j) of the Social Security Act. Same; Same; Same; Project Employment; In Violeta vs. National Labor Relations Commission, this Court ruled that to be exempted from the presumption of regularity of employment, the agreement between a project employee and his employer must strictly conform to the requirements and conditions under Article 280 of the Labor Code.—In Violeta v. National Labor Relations Commission, this Court ruled that to be exempted from the presumption of regularity of employment, the agreement between a project employee and his employer must strictly conform to the requirements and conditions under Article 280 of the Labor Code. It is not enough that an employee is hired for a specific project or phase of work. There must also be a determination of, or a clear agreement on, the completion or

termination of the project at the time the employee was engaged if the objectives of Article 280 are to be achieved. This second requirement was not met in this case. Same; Same; Same; Same; An employment ceases to be coterminus with specific projects when the employee is continuously rehired due to the demands of the employer’s business and re-engaged for many more projects without interruption.—This Court has held that an employment ceases to be co-terminus with specific projects when the employee is continuously rehired due to the demands of the employer’s business and re-engaged for many more projects without interruption. The Court likewise takes note of the fact that, as cited by the SSC, even the National Labor Relations Commission in a labor case involving the same parties, found that private respondents were regular employees of the petitioner. Same; Same; Premiums; Good Faith; Good faith or bad faith is irrelevant for purposes of assessment and collection of the penalty for delayed remittance of premiums.—Good faith or bad faith is irrelevant for purposes of assessment and collection of the penalty for delayed remittance of premiums, since the law makes no distinction between an employer who professes good reasons for delaying the remittance of premiums and another who deliberately disregards the legal duty imposed upon him to make such remittance. E. G.R. No. 161357 November 30, 2005 ELENA P. DYCAICO, vs. SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION Due Process Clause; Equal Protection Clause; Labor Law; Social Legislation; Retirement; Social Security System; Social Security Law (R.A. No. 8282); Words and Phrases; The proviso “as of the date of his retirement” in Section 12-B(d) of RA No. 8282 violates the due process and equal protection clauses of the Constitution.—For reasons which shall be discussed shortly, the proviso “as of the date of his retirement” in Section 12-B(d) of Rep. Act No. 8282 similarly violates the due process and equal protection clauses of the Constitution.

Same; Same; Same; Same; Same; Same; Same; Requisites for Valid Classifications.—A statute based on reasonable classification does not violate the constitutional guaranty of the equal protection clause of the law. With respect to Rep. Act No. 8282, in particular, as a social security law, it is recognized that it “is permeated with provisions that draw lines in classifying those who are to receive benefits. Congressional decisions in this regard are entitled to deference as those of the institution charged under our scheme of government with the primary responsibility for making such judgments in light of competing policies and interests.” However, as in other statutes, the classification in Rep. Act No. 8282 with respect to entitlement to benefits, to be valid and reasonable, must satisfy the following requirements: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class. Same; Same; Same; Same; Same; Same; Same; Classifying dependent spouses and determining their entitlement to survivor’s pension based on whether the marriage was contracted before or after the retirement of the other spouse, regardless of the duration of the said marriage, bears no relation to the achievement of the policy objective of the law, i.e., “provide meaningful protection to members and their beneficiaries against the hazard of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden”—such classification of dependent spouses is not germane to the aforesaid policy objective.—The legislative history of Rep. Act No. 8282 does not bear out the purpose of Congress in inserting the proviso “as of the date of his retirement” to qualify the term “primary beneficiaries” in Section 12-B(d) thereof. To the Court’s mind, however, it reflects congressional concern with the possibility of relationships entered after retirement for the purpose of obtaining benefits. In particular, the proviso was apparently intended to prevent sham marriages or those contracted by persons solely to enable one spouse to claim benefits upon the anticipated death of the other spouse. This concern is concededly valid. However, classifying dependent spouses and determining their entitlement to survivor’s pension based on whether the marriage was contracted before or after the retirement of the

other spouse, regardless of the duration of the said marriage, bears no relation to the achievement of the policy objective of the law, i.e., “provide meaningful protection to members and their beneficiaries against the hazard of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden.” The nexus of the classification to the policy objective is vague and flimsy. Put differently, such classification of dependent spouses is not germane to the aforesaid policy objective. Same; Same; Same; Same; Same; Same; Same; If it were the intention of Congress to prevent sham marriages or those entered into in contemplation of imminent death, then it should have prescribed a definite “duration-of-relationship” or durational period of relationship as one of the requirements for entitlement to survivor’s pension.—If it were the intention of Congress to prevent sham marriages or those entered in contemplation of imminent death, then it should have prescribed a definite “duration-of-relationship” or durational period of relationship as one of the requirements for entitlement to survivor’s pension. For example, in the United States, a provision in their social security law which excludes from social security benefits the surviving wife and stepchild of a deceased wage earner who had their respective relationships to the wage earner for less than nine months prior to his death, was declared valid. Thus, nine months is recognized in the United States as the minimum duration of a marriage to consider it as having been contracted in good faith for the purpose of entitlement to survivorship pension. Same; Same; Same; Same; Same; Same; Same; Classification of dependent spouses on the basis of whether their respective marriages to the SSS member were contracted prior to or after the latter’s retirement for the purpose of entitlement to survivor’s pension does not rest on real and substantial distinctions.—The classification of dependent spouses on the basis of whether their respective marriages to the SSS member were contracted prior to or after the latter’s retirement for the purpose of entitlement to survivor’s pension does not rest on real and substantial distinctions. It is arbitrary and discriminatory. It is too sweeping because the proviso “as of the date of his retirement,” which effectively disqualifies the dependent spouses

whose respective marriages to the retired SSS member were contracted after the latter’s retirement as primary beneficiaries, unfairly lumps all these marriages as sham relationships or were contracted solely for the purpose of acquiring benefits accruing upon the death of the other spouse. The proviso thus unduly prejudices the rights of the legal surviving spouse, like the petitioner, and defeats the avowed policy of the law “to provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden.” Same; Same; Same; Same; Same; Same; Same; Retirees enjoy a protected property interest in their retirement benefits.—As earlier opined, in Government Service Insurance System v. Montesclaros, the Court characterized retirement benefits as a property interest of a retiree. We held therein that “[i]n a pension plan where employee participation is mandatory, the prevailing view is that employees have contractual or vested rights in the pension where the pension is part of the terms of employment.” Thus, it was ruled that, “where the employee retires and meets the eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause” and “[r]etirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law.” Further, since pursuant to the pertinent law therein, the dependent spouse is entitled to survivorship pension, “a widow’s right to receive pension following the demise of her husband is also part of the husband’s contractual compensation.” Although the subject matter in the above-cited case involved the retirement benefits under P.D. No. 1146 or the Revised Government Service Insurance Act of 1977 covering government employees, the pronouncement therein that retirees enjoy a protected property interest in their retirement benefits applies squarely to those in the private sector under Rep. Act No. 8282. This is so because the mandatory contributions of both the employers and the employees to the SSS do not, likewise, make the retirement benefits under Rep. Act No. 8282 mere gratuity but form part of the latter’s compensation. Even the retirement benefits of selfemployed individuals, like Bonifacio, who have been included in the compulsory coverage of Rep. Act No. 8282 are not mere gratuity because they are required to pay both the employer and

employee contributions. Further, under Rep. Act No. 8282, the surviving spouse is entitled to survivor’s pension accruing on the death of the member; hence, the surviving spouse’s right to receive such benefit following the demise of the wife or husband, as the case may be, is also part of the latter’s contractual compensation. Same; Same; Same; Same; Same; Same; Same; Presumptions; The proviso “as of the date of his retirement” in Section 12B(d) of Rep. Act No. 8282 runs afoul of the due process clause as it outrightly deprives the surviving spouses whose respective marriages to the retired SSS members were contracted after the latter’s retirement of their survivor’s benefits—it has created the presumption that marriages contracted after the retirement date of SSS members were entered into for the purpose of securing the benefits under Rep. Act No. 8282, a conclusive presumption that does not afford any opportunity to disprove the presence of the illicit purpose; The proviso, as it creates this conclusive presumption, is unconstitutional because it presumes a fact which is not necessarily or universally true.—The proviso “as of the date of his retirement” in Section 12-B(d) of Rep. Act No. 8282 runs afoul of the due process clause as it outrightly deprives the surviving spouses whose respective marriages to the retired SSS members were contracted after the latter’s retirement of their survivor’s benefits. There is outright confiscation of benefits due such surviving spouses without giving them an opportunity to be heard. By this outright disqualification of the surviving spouses whose respective marriages to SSS members were contracted after the latter’s retirement, the proviso “as of the date of his retirement” qualifying the term “primary beneficiaries” for the purpose of entitlement to survi-vor’s pension has created the presumption that marriages contracted after the retirement date of SSS members were entered into for the purpose of securing the benefits under Rep. Act No. 8282. This presumption, moreover, is conclusive because the said surviving spouse are not afforded any opportunity to disprove the presence of the illicit purpose. The proviso, as it creates this conclusive presumption, is unconstitutional because it presumes a fact which is not necessarily or universally true. In the United States, this kind of presumption is characterized as an “irrebuttable presumption”

and statutes creating permanent and irrebutable presumptions have long been disfavored under the due process clause.

Judicial Review; The rule is that the Court does not decide questions of a constitutional nature unless absolutely necessary to a decision of the case—the question of the constitutionality of the proviso in Section 12-B(d) of R.A. No. 8282 is absolutely for the proper resolution of the present case.—The Court concedes that the petitioner did not raise the issue of the validity of the proviso “as of the date of his retirement” in Section 12-B(d) of Rep. Act No. 8282. The rule is that the Court does not decide questions of a constitutional nature unless absolutely necessary to a decision of the case. However, the question of the constitutionality of the proviso is absolutely necessary for the proper resolution of the present case. Accordingly, the Court required the parties to present their arguments on this issue and proceeded to pass upon the same in the exercise of its equity jurisdiction and in order to render substantial justice to the petitioner who, presumably in her advanced age by now, deserves to receive forthwith the survivor’s pension accruing upon the death of her husband. F. G.R. No. 165545 March 24, 2006 SOCIAL SECURITY SYSTEM, petitioner, vs. TERESITA JARQUE VDA. DE BAILON Civil Law; Family Code; Marriages; The applicable law to determine the validity of a marriage is the law in effect at the time of its celebration. Thus, if it was solemnized before the Family Code took effect on August 3, 1988, the Civil Law provisions on Marriage apply.—The two marriages involved herein having been solemnized prior to the effectivity on August 3, 1988 of the Family Code, the applicable law to determine their validity is the Civil Code which was the law in effect at the time of their celebration. Article 83 of the Civil Code provides: Art. 83. Any marriage subsequently contracted by any person during the lifetime of the first spouse of such person with any person other than such first spouse shall be illegal and void from its performance, unless: (1) The first marriage was annulled or dissolved; or (2) The first spouse had been absent for seven

consecutive years at the time of the second marriage without the spouse present having news of the absentee being alive, or if the absentee, though he has been absent for less than seven years, is generally considered as dead and believed to be so by the spouse present at the time of contracting such subsequent marriage, or if the absentee is presumed dead according to Articles 390 and 391. The marriage so contracted shall be valid in any of the three cases until declared null and void by a competent court. Same; Same; Same; A subsequent marriage contracted during the lifetime of the first spouse is illegal and void ab initio unless the prior marriage is first annulled or dissolved or contracted under any of the three exceptional circumstances.—Under the foregoing provision of the Civil Code, a subsequent marriage contracted during the lifetime of the first spouse is illegal and void ab initio unless the prior marriage is first annulled or dissolved or contracted under any of the three exceptional circumstances. It bears noting that the marriage under any of these exceptional cases is deemed valid “until declared null and void by a competent court.” It follows that the onus probandi in these cases rests on the party assailing the second marriage. Same; Same; Same; Under the Civil Code, a subsequent marriage being voidable as it was contracted by the present spouse believing the absent spouse to be dead, it is terminated by final judgment of annulment in a case instituted by the absent spouse who reappears or by either of the spouses in the subsequent marriage, while under the Family Code, no judicial proceeding to annul a subsequent marriage is necessary as it is automatically terminated by the recording of an affidavit of reappearance of the absent spouse.—Under the Civil Code, a subsequent marriage being voidable, it is terminated by final judgment of annulment in a case instituted by the absent spouse who reappears or by either of the spouses in the subsequent marriage. Under the Family Code, no judicial proceeding to annul a subsequent marriage is necessary. x x x The termination of the subsequent marriage by affidavit provided by the above-quoted provision of the Family Code does not preclude the filing of an action in court to prove

the reappearance of the absentee and obtain a declaration of dissolution or termination of the subsequent marriage. Same; Marriages; If the absentee reappears, but no step is taken to terminate the subsequent marriage, either by affidavit or by court action, such absentee’s mere reappearance, even if made known to the spouses in the subsequent marriage, will not terminate such marriage.—If the absentee reappears, but no step is taken to terminate the subsequent marriage, either by affidavit or by court action, such absentee’s mere reappearance, even if made known to the spouses in the subsequent marriage, will not terminate such marriage. Since the second marriage has been contracted because of a presumption that the former spouse is dead, such presumption continues inspite of the spouse’s physical reappearance, and by fiction of law, he or she must still be regarded as legally an absentee until the subsequent marriage is terminated as provided by law. Same; Same; Voidable Marriages; A voidable marriage cannot be assailed collaterally except in a direct proceeding.—It bears reiterating that a voidable marriage cannot be assailed collaterally except in a direct proceeding. Consequently, such marriages can be assailed only during the lifetime of the parties and not after the death of either, in which case the parties and their offspring will be left as if the marriage had been perfectly valid. Upon the death of either, the marriage cannot be impeached, and is made good ab initio. G. G.R. No. 172101 November 23, 2007 REPUBLIC OF THE PHILIPPINES, represented by the SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM, vs. ASIAPRO COOPERATIVE Jurisdictions; Appeals; Power of Review of the Supreme Court; Although as a rule, in the exercise of the Supreme Court’s power of review, the Court is not a trier of facts and the findings of fact of the Court of Appeals are conclusive and binding on the Court, said rule is not without exceptions.—Although as a rule, in the exercise of the Supreme Court’s power of review, the Court is not a trier of facts and the

findings of fact of the Court of Appeals are conclusive and binding on the Court, said rule is not without exceptions. There are several recognized exceptions in which factual issues may be resolved by this Court. One of these exceptions finds application in this present case which is, when the findings of fact are conflicting. There are, indeed, conflicting findings espoused by the petitioner SSC and the appellate court relative to the existence of employer-employee relationship between the respondent cooperative and its ownersmembers, which necessitates a departure from the oft-repeated rule that factual issues may not be the subject of appeals to this Court. Labor Law; Labor Relations; Employer-Employee Relationship; Elements; In determining the existence of an employer-employee relationship, the following elements are considered: (1) the selection and engagement of the workers; (2) the payment of wages by whatever means; (3) the power of dismissal; and (4) the power to control the worker’s conduct, with the latter assuming primacy in the overall consideration. The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish.—In determining the existence of an employer-employee relationship, the following elements are considered: (1) the selection and engagement of the workers; (2) the payment of wages by whatever means; (3) the power of dismissal; and (4) the power to control the worker’s conduct, with the latter assuming primacy in the overall consideration. The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish. The power of control refers to the existence of the power and not necessarily to the actual exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the employee; it is enough that the employer has the right to wield that power. All the aforesaid elements are present in this case. Same; Same; Same; The existence of an employer-employee relationship cannot be negated by expressly repudiating it in a contract, when the terms and surrounding circumstances show otherwise. The employment status of a person is defined and prescribed by law and not by what the parties

say it should be.—As previously pointed out by this Court, an employee-employer relationship actually exists between the respondent cooperative and its owners-members. The four elements in the four-fold test for the existence of an employment relationship have been complied with. The respondent cooperative must not be allowed to deny its employment relationship with its owners-members by invoking the questionable Service Contracts provision, when in actuality, it does exist. The existence of an employer-employee relationship cannot be negated by expressly repudiating it in a contract, when the terms and surrounding circumstances show otherwise. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. Cooperatives; A cooperative acquires juridical personality upon its registration with the Cooperative Development Authority. It has its Board of Directors, which directs and supervises its business; meaning, its Board of Directors is the one in charge in the conduct and management of its affairs. With that, a cooperative can be likened to a corporation with a personality separate and distinct from its ownersmembers.—It bears stressing, too, that a cooperative acquires juridical personality upon its registration with the Cooperative Development Authority. It has its Board of Directors, which directs and supervises its business; meaning, its Board of Directors is the one in charge in the conduct and management of its affairs. With that, a cooperative can be likened to a corporation with a personality separate and distinct from its owners-members. Consequently, an owner-member of a cooperative can be an employee of the latter and an employeremployee relationship can exist between them.

Same; The management of the affairs of the respondent cooperative is vested in its Board of Directors and not in its owners members as a whole. Therefore, it is completely logical that the respondent cooperative, as a juridical person represented by its Board of Directors, can enter into an employment with its owners members.—In the present case, it is not disputed that the respondent cooperative had registered itself with the Cooperative Development Authority, as evidenced by its Certificate of Registration No. 0-623-2460. In its by-laws,

its Board of Directors directs, controls, and supervises the business and manages the property of the respondent cooperative. Clearly then, the management of the affairs of the respondent cooperative is vested in its Board of Directors and not in its owners-members as a whole. Therefore, it is completely logical that the respondent cooperative, as a juridical person represented by its Board of Directors, can enter into an employment with its owners-members. H. G.R. No. 173151 March 28, 2008 EDUARDO BUGHAW, JR., INDUSTRIAL CORPORATION

vs.

TREASURE

ISLAND

Labor Law; Substantial Evidence; Words and Phrases; Where the Labor Arbiter and the NLRC, on one hand, and the Court of Appeals, on the other, arrived at divergent conclusions although they considered the very same evidences submitted by the parties, it becomes incumbent upon the Supreme Court to determine whether there is substantial evidence to support the finding of the Labor Arbiter and the NLRC that petitioner was illegally dismissed; Substantial evidence is such amount of relevant evidence which a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise.—The Labor Arbiter and the NLRC both ruled that petitioner was illegally dismissed from employment and ordered the payment of his unpaid wages, backwages, and separation pay, while the Court of Appeals found otherwise. The Labor Arbiter and the NLRC, on one hand, and the Court of Appeals, on the other, arrived at divergent conclusions although they considered the very same evidences submitted by the parties. It is, thus, incumbent upon us to determine whether there is substantial evidence to support the finding of the Labor Arbiter and the NLRC that petitioner was illegally dismissed. Substantial evidence is such amount of relevant evidence which a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Same; Termination of Employment; The two (2) facets of a valid termination of employment are: (a) the legality of the

act of dismissal, i.e., the dismissal must be under any of the just causes provided under Article 282 of the Labor Code, and (b) the legality of the manner of dismissal, which means that there must be observance of the requirements of due process, otherwise known as the two-notice rule.—Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold, the substantive and the procedural aspects. Not only must the dismissal be for a just or authorized cause, the rudimentary requirements of due process—notice and hearing—must, likewise, be observed before an employee may be dismissed. Without the concurrence of the two, the termination would, in the eyes of the law, be illegal, for employment is a property right of which one cannot be deprived of without due process. Hence, the two (2) facets of a valid termination of employment are: (a) the legality of the act of dismissal, i.e., the dismissal must be under any of the just causes provided under Article 282 of the Labor Code; and (b) the legality of the manner of dismissal, which means that there must be observance of the requirements of due process, otherwise known as the two-notice rule. Same; Same; Serious Misconduct; Dangerous Drugs Act; Judicial Notice; Words and Phrases; Misconduct is improper or wrong conduct, 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 merely an error in judgment, and for the misconduct to be serious within the meaning of the Act must be of such a grave and aggravated character and not merely trivial or unimportant; The Supreme Court has taken judicial notice of scientific findings that drug abuse can damage the mental faculties of the user—it is beyond question therefore that any employee under the influence of drugs cannot possibly continue doing his duties without posing a serious threat to the lives and property of his co-workers and even his employer.—The charge of drug abuse inside the company’s premises and during working hours against petitioner constitutes serious misconduct, which is one of the just causes for termination. 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 merely an error in judgment. The

misconduct to be serious within the meaning of the Act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless, in connection with the work of the employee, constitute just cause for his separation. This Court took judicial notice of scientific findings that drug abuse can damage the mental faculties of the user. It is beyond question therefore that any employee under the influence of drugs cannot possibly continue doing his duties without posing a serious threat to the lives and property of his co-workers and even his employer. Same; Same; Same; Same; An employee’s statements given to the police during investigation is evidence which can be considered by the employer against another employee, specially so if the latter did not appear in the scheduled administrative hearing to personally present his side.— Loberanes’s statements given to police during investigation is evidence which can be considered by the respondent against the petitioner. Petitioner failed to controvert Loberanes’ claim that he too was using illegal drugs. Records reveal that respondent gave petitioner a first notice dated 11 June 2001, giving him 120 hours within which to explain and defend himself from the charge against him and to attend the administrative hearing scheduled on 16 June 2001. There is no dispute that petitioner received said notice as evidenced by his signature appearing on the lower left portion of a copy thereof together with the date and time of his receipt. He also admitted receipt of the first notice in his Memorandum before this Court. Despite his receipt of the notice, however, petitioner did not submit any written explanation on the charge against him, even after the lapse of the 120-day period given him. Neither did petitioner appear in the scheduled administrative hearing to personally present his side. Thus, the respondent cannot be faulted for considering only the evidence at hand, which was Loberanes’ statement, and conclude therefrom that there was just cause for petitioner’s termination. Same; Same; Same; Due Process; A mere copy of the notice of termination allegedly sent by the employer to the employee, without proof of receipt, or in the very least, actual service thereof upon petitioner, does not constitute substantial evidence.—The law mandates that it is incumbent upon the employer to prove the validity of the termination of employment.

Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated claims as to alleged compliance with the mandatory provisions of law cannot be favored by this Court. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of our labor laws and Constitution. The burden therefore is on respondent to present clear and unmistakable proof that petitioner was duly served a copy of the notice of termination but he refused receipt. Bare and vague allegations as to the manner of service and the circumstances surrounding the same would not suffice. A mere copy of the notice of termination allegedly sent by respondent to petitioner, without proof of receipt, or in the very least, actual service thereof upon petitioner, does not constitute substantial evidence. It was unilaterally prepared by the petitioner and, thus, evidently self-serving and insufficient to convince even an unreasonable mind. We cannot overemphasize the importance of the requirement on the notice of termination, for we have ruled in a number of cases that non-compliance therewith is tantamount to deprivation of the employee’s right to due process. Same; Same; Same; Same; Agabon Doctrine; Words and Phrases; The Agabon doctrine enunciates the rule that if the dismissal was for just cause but procedural due process was not observed, the dismissal should be upheld but the employer should indemnify the employee for the violation of his right to procedural due process.—The Agabon doctrine enunciates the rule that if the dismissal was for just cause but procedural due process was not observed, the dismissal should be upheld. Where the dismissal is for just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal or render it illegal or ineffectual. However, the employer should indemnify the employee for the violation of his right to procedural due process. The indemnity to be imposed should be stiffer to discourage the abhorrent practice of “dismiss now, pay later,” which we sought to deter in the Serrano, 331 SCRA 331 (2000) ruling. In Agabon, 442 SCRA 573 (2004), the nominal damages awarded was P30,000.00.

I. G.R. No. 172589 August 9, 2010 JEFFREY NACAGUE, vs. SULPICIO LINES, INC., Labor Law; Termination of Employment; Two Requisites to Constitute Valid Dismissal from Employment.—Under Article 279 of the Labor Code, an employer may terminate the services of an employee for just causes or for authorized causes. Furthermore, under Article 277(b) of the Labor Code, the employer must send the employee who is about to be terminated, a written notice stating the causes for termination and must give the employee the opportunity to be heard and to defend himself. Thus, to constitute valid dismissal from employment, two requisites must concur: (1) the dismissal must be for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard and to defend himself. Same; Same; Section 36 of Republic Act (R.A.) No. 9165 provides that drug tests shall be performed only by authorized drug testing centers; Drug testing shall consist of both the screening test and the confirmatory test.—Section 36 of R.A. No. 9165 provides that drug tests shall be performed only by authorized drug testing centers. Moreover, Section 36 also prescribes that drug testing shall consist of both the screening test and the confirmatory test. Same; Same; When the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal.—The law is clear that drug tests shall be performed only by authorized drug testing centers. In this case, Sulpicio Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center. Sulpicio Lines did not even deny Nacague’s allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to determine if Nacague was guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct and loss of trust and confidence. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating Nacague’s employment. When the alleged valid cause for the termination of employment is not

clearly proven, as in this case, the law considers the matter a case of illegal dismissal. J. G.R. No. 167050 June 1, 2011 SOCIAL SECURITY COMMISSION vs. RIZAL POULTRY and LIVESTOCK ASSOCIATION, INC., BSD AGRO INDUSTRIAL DEVELOPMENT CORPORATION and BENJAMIN SAN DIEGO Remedial Law; Actions; Judgments; Res Judicata; Two concepts embraced in res judicata, bar by prior judgment and conclusiveness of judgment.—Res judicata embraces two concepts: (1) bar by prior judgment as enunciated in Rule 39, Section 47(b) of the Rules of Civil Procedure; and (2) conclusiveness of judgment in Rule 39, Section 47(c). There is “bar by prior judgment” when, as between the first case where the judgment was rendered and the second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In this instance, the judgment in the first case constitutes an absolute bar to the second action. But where there is identity of parties in the first and second cases, but no identity of causes of action, the first judgment is conclusive only as to those matters actually and directly controverted and determined and not as to matters merely involved therein. This is the concept of res judicata known as “conclusiveness of judgment.” Stated differently, any right, fact or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which judgment is rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies, whether or not the claim, demand, purpose, or subject matter of the two actions is the same. Same; Same; Same; Same; Elements of Res Judicata.—The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action. Should identity of parties, subject matter, and causes of action be shown in the two cases, then res judicata in

its aspect as a “bar by prior judgment” would apply. If as between the two cases, only identity of parties can be shown, but not identical causes of action, then res judicata as “conclusiveness of judgment” applies. Same; Same; Same; Same; There is substantial identity of parties when there is a community of interest between a party in the first case and a party in the second case, even if the latter was not impleaded in the first case.—The parties in SSC and NLRC cases are not strictly identical. Rizal Poultry was impleaded as additional respondent in the SSC case. Jurisprudence however does not dictate absolute identity but only substantial identity. There is substantial identity of parties when there is a community of interest between a party in the first case and a party in the second case, even if the latter was not impleaded in the first case. Same; Same; Same; Same; An identity in the cause of action need not obtain in order to apply res judicata by “conclusiveness of judgment”; an identity of issues would suffice.—As previously stated, an identity in the cause of action need not obtain in order to apply res judicata by “conclusiveness of judgment.” An identity of issues would suffice. Same; Same; Same; Same; The doctrine of “conclusiveness of judgment” also applies in criminal cases.—The fairly recent case of Co v. People, 592 SCRA 381 (2009), likewise applies to the present case. An information was filed against Co by private respondent spouses who claim to be employees of the former for violation of the Social Security Act, specifically for nonremittance of SSS contributions. Earlier, respondent spouses had filed a labor case for illegal dismissal. The NLRC finally ruled that there was no employer-employee relationship between her and respondent spouses. Co then filed a motion to quash the information, arguing that the facts alleged in the Information did not constitute an offense because respondent spouses were not her employees. In support of her motion, she cited the NLRC ruling. This Court applied Smith Bell and declared that the final and executory NLRC decision to the effect that respondent spouses were not the employees of petitioner is a ruling binding in the case for violation of the Social Security Act. The Court

further stated that the doctrine of “conclusiveness of judgment” also applies in criminal cases. K. G.R. No. 187474 February 6, 2013 GOVERNMENT SERVICE INSURANCE SYSTEM vs. MARILOU ALCARAZ Employees’ Compensation; Occupational Diseases; Diabetes Mellitus; While diabetes mellitus was indeed a complicating factor in Bernardo’s health condition and indisputably aggravated his heart problem, we cannot discount other employment factors, mental and physical, that had been indisputably present; they contributed, if not as a direct cause of the heart condition itself, as aggravation that worsened and hastened his fatal myocardial infarction.— While diabetes mellitus was indeed a complicating factor in Bernardo’s health condition and indisputably aggravated his heart problem, we cannot discount other employment factors, mental and physical, that had been indisputably present; they contributed, if not as a direct cause of the heart condition itself, as aggravation that worsened and hastened his fatal myocardial infarction. Same; Same; Heart Diseases; Resolution No. 432; Resolution No. 432 provides (as one of the conditions) that a heart disease is compensable if it was known to have been present during employment, there must be proof that an acute exacerbation was clearly precipitated by the unusual strain by reason of the nature of his work.—The CA’s conclusion is bolstered by the fact that the ECC itself, the government agency tasked by law to implement the employees compensation program (together with the GSIS in the public sector and the Social Security System [SSS] in the private sector), included cardio-vascular diseases in the list of occupational diseases, making them compensable, subject to any of the conditions stated in its enabling Resolution No. 432. With the resolution, it should be obvious that by itself, a heart disease, such as myocardial infarction, can be considered work-related, with or without the complicating factors of other non-occupational illnesses. Thus, the Court so ruled in Rañises v. ECC, 467 SCRA 71 (2005), where it emphasized that the incidence of acute

myocardial infarction, whether or not associated with a nonlisted ailment, is enough basis for compensation. Resolution No. 432 provides (as one of the conditions) that a heart disease is compensable if it was known to have been present during employment, there must be proof that an acute exacerbation was clearly precipitated by the unusual strain by reason of the nature of his work. Based on the evidence on record, we find as the CA did, that the nature of Bernardo’s duties and the conditions under which he worked were such as to eventually cause the onset of his myocardial infarction. The stresses, the strain, and the exposure to street pollution and to the elements that Bernardo had to bear for almost 29 years are all too real to be ignored. They cannot but lead to a deterioration of health particularly with the contributing factors of diabetes and pulmonary disease. L. G.R. No. 188385 October 2, 2013 BENITO E. LORENZO, vs. INSURANCE SYSTEM (GSIS) EDUCATION (DepEd),

GOVERNMENT SERVICE and DEPARTMENT OF

Labor Law; Employees’ Compensation; Sickness; Words and Phrases; Sickness, as defined under Article 167 (l) Chapter I, Title II, Book IV of the Labor Code of the Philippines refers to any illness definitely accepted as an occupational disease listed by the Employees’ Compensation Commission, or any illness caused by employment, subject to proof that the risk of contracting the same is increased by working conditions.—Sickness, as defined under Article 167 (l) Chapter I, Title II, Book IV of the Labor Code of the Philippines refers to “any illness definitely accepted as an occupational disease listed by the Employees’ Compensation Commission, or any illness caused by employment, subject to proof that the risk of contracting the same is increased by working conditions. Same; Same; Death Benefits; In cases of death, Section 1(b), Rule III of the Rules Implementing P.D. No. 626, as amended, requires that for the sickness and the resulting disability or death to be compensable, the claimant must show: (1) that it is the result of an occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation with

the conditions set therein satisfied; or (2) that the risk of contracting the disease is increased by the working conditions.—In cases of death, such as in this case, Section 1(b), Rule III of the Rules Implementing P.D. No. 626, as amended, requires that for the sickness and the resulting disability or death to be compensable, the claimant must show: (1) that it is the result of an occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation with the conditions set therein satisfied; or (2) that the risk of contracting the disease is increased by the working conditions. Section 2(a), Rule III of the said Implementing Rules, on the other hand, defines occupational diseases as those listed in Annex “A” when the nature of employment is as described therein. Same; Same; Sickness; A claimant must submit such proof as would constitute a reasonable basis for concluding either that the conditions of employment of the claimant caused the ailment or that such working conditions had aggravated the risk of contracting that ailment.—In Sante v. Employees’ Compensation Commission, 174 SCRA 557 (1989) we held that “x x x x a claimant must submit such proof as would constitute a reasonable basis for concluding either that the conditions of employment of the claimant caused the ailment or that such working conditions had aggravated the risk of contracting that ailment. What kind and quantum of evidence would constitute an adequate basis for a reasonable man x x x to reach one or the other conclusion, can obviously be determined only on a case-tocase basis. That evidence must, however, be real and substantial, and not merely apparent, for the duty to prove work-causation or work-aggravation imposed by existing law is real x x x not merely apparent.” Same; Same; It is well to stress that the principles of “presumption of compensability” and “aggravation” found in the old Workmen’s Compensation Act is expressly discarded under the present compensation scheme.—It is well to stress that the principles of “presumption of compensability” and “aggravation” found in the old Workmen’s Compensation Act is expressly discarded under the present compensation scheme. As illustrated in the said Raro case, the new principle being applied is a system based on social security principle; thus, the introduction of “proof of increased risk.” As further declared

therein: The present system is also administered by social insurance agencies — the Government Service Insurance System and Social Security System — under the Employees Compensation Commission. The intent was to restore a sensible equilibrium between the employer’s obligation to pay workmen’s compensation and the employee’s right to receive reparation for work-connected death or disability. M. G.R. No. 189574 July 18, 2014 ESTRELLA D. S. BAÑEZ vs. SOCIAL SECURITY SYSTEM and DE LA SALLE UNIVERSITY Remedial Law; Civil Procedure; Appeals; It is doctrinally entrenched that appeal is not a constitutional right, but a mere statutory privilege.—It is doctrinally entrenched that appeal is not a constitutional right, but a mere statutory privilege. Hence, parties who seek to avail themselves of it must comply with the statutes or rules allowing it. The rule is that failure to file or perfect an appeal within the reglementary period will make the judgment final and executory by operation of law. Perfection of an appeal within the statutory or reglementary period is not only mandatory but also jurisdictional; failure to do so renders the questioned decision/resolution final and executory, and deprives the appellate court of jurisdiction to alter the decision/resolution, much less to entertain the appeal. Filing of an appeal beyond the reglementary period may, under meritorious cases, be excused if the barring of the appeal would be inequitable and unjust in light of certain circumstances therein. Same; Same; Same; Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the Court of Appeals (CA).—The findings of fact of the SSS are supported by substantial evidence and affirmed by the ECC and the Court of Appeals. This Court is not a trier of facts. The Court accords great weight to the factual findings of lower courts or agencies whose function is to resolve factual matters. It is not for the Court to weigh evidence all over again. Moreover, findings of fact of administrative agencies and

quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the Court of Appeals. Labor Law; Social Security System; Death Benefits; Occupational Diseases; In order for the beneficiary of an employee to be entitled to death benefits under the Social Security System (SSS), the cause of death of the employee must be a sickness listed as an occupational disease by Employees’ Compensation Commission (ECC); or any other illness caused by employment, subject to proof that the risk of contracting the same is increased by the working conditions.—In order for the beneficiary of an employee to be entitled to death benefits under the SSS, the cause of death of the employee must be a sickness listed as an occupational disease by ECC; or any other illness caused by employment, subject to proof that the risk of contracting the same is increased by the working conditions. It is undisputed that SLE is not listed as an occupational disease under Annex “A” of the Rules on Employees’ Compensation. Thus, petitioner has to prove by substantial evidence the causal relationship between her husband’s illness and his working conditions. Same; Same; Same; Same; For petitioner’s claim to prosper, she must submit such proof as would constitute a reasonable basis for concluding either that the conditions of employment caused her husband’s ailment or that such working conditions had aggravated the risk of contracting that ailment.—For petitioner’s claim to prosper, she must submit such proof as would constitute a reasonable basis for concluding either that the conditions of employment caused her husband’s ailment or that such working conditions had aggravated the risk of contracting that ailment. N. G.R. No. 196102 November 26, 2014 GOVERNMENT SERVICE INSURANCE SYSTEM, vs. AURELIA Y. CALUMPIANO Employees’ Compensation; Court Personnel; Stenographers; Glaucoma; Contrary to petitioner’s submissions, there

appears to be a link between blood pressure and the development of glaucoma, which leads the Supreme Court (SC) to conclude that respondent’s glaucoma developed as a result of her hypertension.—Respondent served the government for 30 long years; veritably, as the ECC itself said, “[h]er duties were no doubt stressful and the same may have caused her to develop her ailment, hypertension” — which is a listed occupational disease, contrary to the CA’s pronouncement that it is not. And because it is a listed occupational disease, the “increased risk theory” does not apply — again, contrary to the CA’s declaration; no proof of causation is required. It can also be said that given respondent’s age at the time, and taking into account the nature, working conditions, and pressures of her work as court stenographer — which requires her to faithfully record each and every day virtually all of the court’s proceedings; transcribe these notes immediately in order to make them available to the court or the parties who require them; take down dictations by the judge, and transcribe them; and type in final form the judge’s decisions, which activities extend beyond office hours and without additional compensation or overtime pay — all these contributed to the development of her hypertension — or hypertensive cardiovascular disease, as petitioner would call it. Consequently, her age, work, and hypertension caused the impairment of vision in both eyes due to “advanced to late stage glaucoma,” which rendered her “legally blind.” Contrary to petitioner’s submissions, there appears to be a link between blood pressure and the development of glaucoma, which leads the Court to conclude that respondent’s glaucoma developed as a result of her hypertension. Same; Probability, not certainty, is the test of proof in compensation cases.—The Court is well guided by the principles, declared in Government Service Insurance System v. Baul, 497 SCRA 397 (2006) and Government Service Insurance System v. De Castro, 593 SCRA 155 (2009), that probability, not certainty, is the test of proof in compensation cases; that the primordial and paramount consideration is the employee’s welfare; that the strict rules of evidence need not be observed in claims for compensation; that medical findings of the attending physician may be received in evidence and used as proof of the facts in dispute; that in any determination of compensability, the nature and characteristics of the job are as important as raw

medical findings and a claimant’s personal and social history; that where the primary injury is shown to have arisen in the course of employment, every natural consequence that flows from the injury likewise arises out of the employment, unless it is the result of an independent intervening cause attributable to claimant’s own negligence or misconduct; and that the policy is to extend the application of the law on employees’ compensation to as many employees who can avail of the benefits thereunder. O. G.R. No. 181490 April 23, 2014 MIRANT (PHILIPPINES) CORPORATION and EDGARDO A. BAUTISTA vs. JOSELITO A. CARO Labor Law; Statutes; Statutory Construction; Liberal Construction; This jurisdiction has adopted in the field of labor protection a liberal stance towards the construction of the rules of procedure in order to serve the ends of substantial justice.—This jurisdiction has adopted in the field of labor protection a liberal stance towards the construction of the rules of procedure in order to serve the ends of substantial justice. This liberal construction in labor law emanates from the mandate that the workingman’s welfare should be the primordial and paramount consideration. Thus, if the rules of procedure will stunt courts from fulfilling this mandate, the rules of procedure shall be relaxed if the circumstances of a case warrant the exercise of such liberality. If we sustain the argument of petitioners in the case at bar that the petition for certiorari should have been dismissed outright by the CA, the NLRC decision would have reached finality and respondent would have lost his remedy and denied his right to be protected against illegal dismissal under the Labor Code, as amended. Same; Management Prerogatives; In the exercise of its management prerogative, an employer must therefore ensure that the policies, rules and regulations on workrelated activities of the employees must always be fair and reasonable and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction.—While the adoption and enforcement by petitioner corporation of its Anti-Drugs Policy is recognized as a valid exercise of its management prerogative as an employer,

such exercise is not absolute and unbridled. Managerial prerogatives are subject to limitations provided by law, collective bargaining agreements, and the general principles of fair play and justice. In the exercise of its management prerogative, an employer must therefore ensure that the policies, rules and regulations on work-related activities of the employees must always be fair and reasonable and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction. Same; Statutory Construction; It is not a mere jurisprudential principle, but an enshrined provision of law, that all doubts shall be resolved in favor of labor.—It is not a mere jurisprudential principle, but an enshrined provision of law, that all doubts shall be resolved in favor of labor. Thus, in Article 4 of the Labor Code, as amended, “[a]ll doubts in the implementation and interpretation of the provisions of [the Labor] Code, including its implementing rules and regulations, shall be resolved in favor of labor.” In Article 1702 of the New Civil Code, a similar provision states that “[i]n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.” Applying these provisions of law to the circumstances in the case at bar, it is not fair for this Court to allow an ambiguous policy to prejudice the rights of an employee against illegal dismissal. To hold otherwise and sustain the stance of petitioner corporation would be to adopt an interpretation that goes against the very grain of labor protection in this jurisdiction. As correctly stated by the Labor Arbiter, “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 underprivileged worker.” Same; Quitclaims; Quitclaims executed by laborers are ineffective to bar claims for the full measure of their legal rights.—As to the other issue relentlessly being raised by petitioner corporation that respondent’s petition for certiorari before the CA should have been considered moot as respondent had already previously executed a quitclaim discharging petitioner corporation from all his monetary claims, we cannot agree. Quitclaims executed by laborers are ineffective to bar claims for the full measure of their legal rights, especially in this

case where the evidence on record shows that the amount stated in the quitclaim exactly corresponds to the amount claimed as unpaid wages by respondent under Annex A of his Reply filed with the Labor Arbiter. Prima facie, this creates a false impression that respondent’s claims have already been settled by petitioner corporation — discharging the latter from all of respondent’s monetary claims. In truth and in fact, however, the amount paid under the subject quitclaim represented the salaries of respondent that remained unpaid at the time of his termination — not the amounts being claimed in the case at bar. Mercantile Law; Corporations; A corporation has a personality separate and distinct from its officers and board of directors who may only be held personally liable for damages if it is proven that they acted with malice or bad faith in the dismissal of an employee.—A corporation has a personality separate and distinct from its officers and board of directors who may only be held personally liable for damages if it is proven that they acted with malice or bad faith in the dismissal of an employee. Absent any evidence on record that petitioner Bautista acted maliciously or in bad faith in effecting the termination of respondent, plus the apparent lack of allegation in the pleadings of respondent that petitioner Bautista acted in such manner, the doctrine of corporate fiction dictates that only petitioner corporation should be held liable for the illegal dismissal of respondent. P. G.R. No. 209741 April 15, 2015 SOCIAL SECURITY COMMISSION vs. EDNA A. AZOTE Labor Law; Social Security Law; Republic Act (RA) No. 8282, the amendatory law of R.A. No. 1161 or the “Social Security Law” is a tax-exempt social security service designed to promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden.—The law in force at the time of Edgardo’s death was Republic Act (R.A.) No. 8282, the amendatory law of R.A. No. 1161 or the “Social Security Law.” It is a tax-exempt social security service designed to promote social justice and provide

meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden. Same; Same; As a social security program of the government, Section 8(e) and (k) of Republic Act (RA) No. 8282 expressly provides who would be entitled to receive benefits from its deceased member.—As a social security program of the government, Section 8(e) and (k) of the said law expressly provides who would be entitled to receive benefits from its deceased member, to wit: SEC. 8. Terms Defined.—For purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings: x x x x (e) Dependents – The dependents shall be the following: (1) The legal spouse entitled by law to receive support from the member; (2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed, and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally; and (3) The parent who is receiving regular support from the member. x x x x (k) Beneficiaries – The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member: Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated children of the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be the secondary beneficiaries of the member. In the absence of all the foregoing, any other person designated by the member as his/her secondary beneficiary. Same; Same; Applying Section 8(e) and (k) of Republic Act (RA) No. 8282, it is clear that only the legal spouse of the deceased member is qualified to be the beneficiary of the latter’s Social Security Commission (SSC) benefits.—Applying Section 8(e) and (k) of R.A. No. 8282, it is clear that only the legal

spouse of the deceased member is qualified to be the beneficiary of the latter’s SS benefits. In this case, there is a concrete proof that Edgardo contracted an earlier marriage with another individual as evidenced by their marriage contract. Edgardo even acknowledged his married status when he filled out the 1982 Form E-4 designating Rosemarie as his spouse. Same; Same; Burden of Proof; Settled is the rule that “whoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence.”—Using the parameters outlined in Article 41 of the Family Code, Edna, without doubt, failed to establish that there was no impediment or that the impediment was already removed at the time of the celebration of her marriage to Edgardo. Settled is the rule that “whoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence.” Edna could not adduce evidence to prove that the earlier marriage of Edgardo was either annulled or dissolved or whether there was a declaration of Rosemarie’s presumptive death before her marriage to Edgardo. What is apparent is that Edna was the second wife of Edgardo. Considering that Edna was not able to show that she was the legal spouse of a deceased-member, she would not qualify under the law to be the beneficiary of the death benefits of Edgardo. Administrative Agencies; Social Security Commission; Although the Social Security Commission (SSC) is not intrinsically empowered to determine the validity of marriages, it is required by Section 4(b)(7) of Republic Act (RA) No. 8282 to examine available statistical and economic data to ensure that the benefits fall into the rightful beneficiaries.—Although the SSC is not intrinsically empowered to determine the validity of marriages, it is required by Section 4(b)(7) of R.A. No. 8282 to examine available statistical and economic data to ensure that the benefits fall into the rightful beneficiaries. As held in Social Security Commission v. Favila, 646 SCRA 462 (2011): SSS, as the primary institution in charge of extending social security protection to workers and their beneficiaries is mandated by Section 4(b)(7) of RA 8282 to require reports, compilations and analyses of statistical and economic data and to make an investigation as may be needed for its proper administration and development. Precisely, the investigations

conducted by SSS are appropriate in order to ensure that the benefits provided under the SS Law are received by the rightful beneficiaries. It is not hard to see that such measure is necessary for the system’s proper administration, otherwise, it will be swamped with bogus claims that will pointlessly deplete its funds. Such scenario will certainly frustrate the purpose of the law which is to provide covered employees and their families protection against the hazards of disability, sickness, old age and death, with a view to promoting their well-being in the spirit of social justice. Moreover and as correctly pointed out by SSC, such investigations are likewise necessary to carry out the mandate of Section 15 of the SS Law which provides in part, viz.: Sec. 15. Non-transferability of Benefits.—The SSS shall pay the benefits provided for in this Act to such [x x x] persons as may be entitled thereto in accordance with the provisions of this Act x x x.

PART II- POST EMPLOYMENT TRANSITORY AND FINL PROVISIONS OF THE LABOR CODE

X

Pages 749 to 810.

CASE:

Duration of the Project or Specific Undertaking. A. G.R. No. 209499 January 28, 2015 MA. CHARITO C. GADIA et al vs. SYKES ASIA, INC./CHUCK SYKES/MIKE HINDS/MICHAEL HENDERSON Remedial Law; Special Civil Actions; Certiorari; Grave Abuse of Discretion; To justify the grant of the extraordinary remedy of certiorari, petitioners must satisfactorily show that the court or quasi-judicial authority gravely abused the discretion conferred upon it.—At the outset, it must be stressed that to justify the grant of the extraordinary remedy of certiorari, petitioners must satisfactorily

show that the court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of discretion connotes judgment exercised in a capricious and whimsical manner that is tantamount to lack of jurisdiction. To be considered “grave,” discretion must be exercised in a despotic manner by reason of passion or personal hostility, and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law. Same; Same; Same; Same; Labor Law; In labor disputes, grave abuse of discretion may be ascribed to the National Labor Relations Commission (NLRC) when, inter alia, its findings and the conclusions reached thereby are not supported by substantial evidence.—In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and the conclusions reached thereby are not supported by substantial evidence. This requirement of substantial evidence is clearly expressed in Section 5, Rule 133 of the Rules of Court which provides that “in cases filed before administrative or quasi-judicial bodies, a fact may be deemed established if it is supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.” Labor Law; “Project Employees” and “Regular Employees,” Distinguished.—Article 294 of the Labor Code, as amended, distinguishes a project-based employee from a regular employee as follows: Art. 294. Regular and casual employment.—The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. x x x x (Emphasis and underscoring supplied) In Omni Hauling Services, Inc. v. Bon, 734 SCRA 270 (2014), the Court extensively discussed how to determine whether an employee may be properly deemed project-based or regular, to wit: A project employee is assigned to a project which begins and ends at determined or determinable times. Unlike regular employees who may only be dismissed for just and/or authorized causes under

the Labor Code, the services of employees who are hired as “project[based] employees” may be lawfully terminated at the completion of the project. According to jurisprudence, the principal test for determining whether particular employees are properly characterised as “project[based] employees” as distinguished from “regular employees,” is whether or not the employees were assigned to carry out a “specific project or undertaking,” the duration (and scope) of which were specified at the time they were engaged for that project. The project could either be (1) a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct and separate, and identifiable as such, from the other undertakings of the company; or (2) a particular job or undertaking that is not within the regular business of the corporation. In order to safeguard the rights of workers against the arbitrary use of the word “project” to prevent employees from attaining a regular status, employers claiming that their workers are project[-based] employees should not only prove that the duration and scope of the employment was specified at the time they were engaged, but also, that there was indeed a project. Burden of Proving the Fact of Dismissal A. G.R. No. 207888 June 9, 2014 DIONARTO Q. NOBLEJAS vs. ITALIAN MARITIME ACADEMY PHILS., INC., CAPT. NICOLO S. TERREI, RACELI B. FERREZ and MA. TERESA R. MENDOZA. Labor Law; Regular Employees; Pursuant to Article 280 of the Labor Code, there are two kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed.—Pursuant to Article 280 of the Labor Code, there are two kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed. Regular employees are further classified into (1) regular employees — by nature of work and (2) regular

employees — by years of service. The former refers to those employees who perform a particular function which is necessary or desirable in the usual business or trade of the employer, regardless of their length of service; while the latter refers to those employees who have been performing the job, regardless of its nature thereof, for at least a year. Same; Evidence; Burden of Proof; Fair evidentiary rule dictates that before employers are burdened to prove that they did not commit illegal dismissal, it is incumbent upon the employee to first establish by substantial evidence the fact of his or her dismissal.—Fair evidentiary rule dictates that before employers are burdened to prove that they did not commit illegal dismissal, it is incumbent upon the employee to first establish by substantial evidence the fact of his or her dismissal. The Court is not unmindful of the rule in labor cases that the employer has the burden of proving that the termination was for a valid or authorized cause. It is likewise incumbent upon the employees, however, that they should first establish by competent evidence the fact of their dismissal from employment. It is an age-old rule that the one who alleges a fact has the burden of proving it and the proof should be clear, positive and convincing. Mere allegation is not evidence. Same; Same; The fact of dismissal must be established by positive and overt acts of an employer indicating the intention to dismiss.—Let it be underscored that the fact of dismissal must be established by positive and overt acts of an employer indicating the intention to dismiss. Indeed, a party alleging a critical fact must support his allegation with substantial evidence, for any decision based on unsubstantiated allegation cannot stand without offending due process. Here, there is no sufficient proof showing that Noblejas was actually laid off from work. In any event, his filing of a complaint for illegal dismissal, irrespective of whether reinstatement or separation pay was prayed for, could not by itself be the sole consideration in determining whether he has been illegally dismissed. All circumstances surrounding the alleged termination should also be taken into account.

Transfer A. G.R. No. 174208 January 25, 2012 JONATHAN V. MORALES, vs. HARBOUR CENTRE PORT TERMINAL, INC., Labor Law; Termination of Employment; Constructive Dismissal; Constructive dismissal exists where there is cessation of work because “continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay” and other benefits.—Constructive dismissal exists where there is cessation of work because “continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay” and other benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not, constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. In cases of a transfer of an employee, the rule is settled that the employer is charged with the burden of proving that its conduct and action are for valid and legitimate grounds such as genuine business necessity and that the transfer is not unreasonable, inconvenient or prejudicial to the employee. If the employer cannot overcome this burden of proof, the employee’s transfer shall be tantamount to unlawful constructive dismissal. Same; Management Prerogatives; Transfers; Reassignment; 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.—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. By management prerogative is meant the right of an employer to regulate all aspects of employment, such as the freedom to prescribe work

assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers. Although jurisprudence recognizes said management prerogative, it has been ruled that the exercise thereof, while ordinarily not interfered with, is not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general principles of fair play and justice. 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. Indeed, having the right should not be confused with the manner in which that right is exercised. Same; Evidence; Substantial Evidence; In administrative or quasi-judicial proceedings like those conducted before the National Labor Relations Commission (NLRC), the standard of proof is substantial evidence which is understood to be more than just a scintilla or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.—As the party belatedly seeking to justify the reassignment due to the supposed reorganization of its corporate structure, HCPTI, in contrast, did not even bother to show that it had implemented a corporate reorganization and/or approved a new plantilla of positions which included the one to which Morales was being transferred. Since the burden of evidence lies with the party who asserts the affirmative of an issue, the respondent has to prove the allegations in his affirmative defenses in the same manner that the complainant has to prove the allegations in the complaint. In administrative or quasi-judicial proceedings like those conducted before the NLRC, the standard of proof is substantial evidence which is understood to be more than just a scintilla or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Same; Termination of Employment; Abandonment; Abandonment requires the deliberate, unjustified refusal of the employee to resume his employment, without any intention of returning.—As a just and valid ground for

dismissal, at any rate, abandonment requires the deliberate, unjustified refusal of the employee to resume his employment, without any intention of returning. Since an employee like Morales who takes steps to protest his dismissal cannot logically be said to have abandoned his work, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. B. G.R. No. 144412 November 18, 2003 ALLIED BANKING CORPORATION vs. COURT OF APPEALS and POTENCIANO L. GALANIDA Pleadings and Practice; A syllabus is not a part of the court’s decision.—The syllabus of cases in official or unofficial reports of Supreme Court decisions or resolutions is not the work of the Court, nor does it state this Court’s decision. The syllabus is simply the work of the reporter who gives his understanding of the decision. The reporter writes the syllabus for the convenience of lawyers in reading the reports. A syllabus is not a part of the court’s decision. A counsel should not cite a syllabus in place of the carefully considered text in the decision of the Court. Same; Same; A lawyer shall not knowingly misquote or misrepresent the text of a decision or authority; It is the duty of all officers of the court to cite the rulings and decisions of the Supreme Court accurately.—In the present case, Labor Arbiter Almirante and Atty. Durano began by quoting from Dosch, but substituted a portion of the decision with a headnote from the SCRA syllabus, which they even underscored. In short, they deliberately made the quote from the SCRA syllabus appear as the words of the Supreme Court. We admonish them for what is at the least patent carelessness, if not an outright attempt to mislead the parties and the courts taking cognizance of this case. Rule 10.02, Canon 10 of the Code of Professional Responsibility mandates that a lawyer shall not knowingly misquote or misrepresent the text of a decision or authority. It is the duty of all officers of the court to cite the rulings and decisions of the Supreme Court accurately. Labor Law; National Labor Relations Commission (NLRC); Factual findings of the Court of Appeals, particularly when

they affirm the findings of the NLRC or the lower courts accorded great weight and even finality, exceptions.—We accord great weight and even finality to the factual findings of the Court of Appeals, particularly when they affirm the findings of the NLRC or the lower courts. However, there are recognized exceptions to this rule. These exceptions are: (1) when the findings are grounded on speculation, surmise and conjecture; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion in the appreciation of facts; (4) when the factual findings of the trial and appellate courts are conflicting; (5) when the Court of Appeals, in making its findings, has gone beyond the issues of the case and such findings are contrary to the admissions of both appellant and appellee; (6) when the judgment of the appellate court is premised on a misapprehension of facts or when it has failed to consider certain relevant facts which, if properly considered, will justify a different conclusion; (7) when the findings of fact are conclusions without citation of specific evidence on which they are based; and (8) when the findings of fact of the Court of Appeals are premised on the absence of evidence but are contradicted by the evidence on record. Same; Dismissals; Transfer of an employee ordinarily lies within the ambit of the employer’s prerogatives; In illegal dismissal cases, the employer has the burden of showing that the transfer is not unnecessary, inconvenient and prejudicial to the displaced employee.—The rule is that the transfer of an employee ordinarily lies within the ambit of the employer’s prerogatives. The employer exercises the prerogative to transfer an employee for valid reasons and according to the requirement of its business, provided the transfer does not result in demotion in rank or diminution of the employee’s salary, benefits and other privileges. In illegal dismissal cases, the employer has the burden of showing that the transfer is not unnecessary, inconvenient and prejudicial to the displaced employee. Same; Same; Employer has the prerogative, based on its assessment of the employees’ qualifications and competence, to rotate them in the various areas of its business operations to ascertain where they will function with maximum benefit to the company.—As regards Ms. Co, Galanida’s letter of 16 June 1994 itself showed that her

assignment to Cebu was not in any way related to Galanida’s transfer. Ms. Co was supposed to replace a certain Larry Sabelino in the Tabunok branch. The employer has the prerogative, based on its assessment of the employees’ qualifications and competence, to rotate them in the various areas of its business operations to ascertain where they will function with maximum benefit to the company. Same; Same; Unfair labor practices relate only to violations of “the constitutional right of workers and employees to selforganization” and are limited to the acts enumerated in Article 248 of the Labor Code.—There is also no basis for the finding that Allied Bank was guilty of unfair labor practice in dismissing Galanida. Unfair labor practices relate only to violations of “the constitutional right of workers and employees to self-organization” and are limited to the acts enumerated in Article 248 of the Labor Code, none of which applies to the present case. There is no evidence that Galanida took part in forming a union, or even that a union existed in Allied Bank. Same; Same; Refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer.—The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer. Employees may object to, negotiate and seek redress against employers for rules or orders that they regard as unjust or illegal. However, until and unless these rules or orders are declared illegal or improper by competent authority, the employees ignore or disobey them at their peril. For Galanida’s continued refusal to obey Allied Bank’s transfer orders, we hold that the bank dismissed Galanida for just cause in accordance with Article 282 (a) of the Labor Code. Galanida is thus not entitled to reinstatement or to separation pay. Constitutional Law; Due Process; The essence of due process is simply an opportunity to be heard.—On the requirement of a hearing, this Court has held that the essence of due process is simply an opportunity to be heard. An actual hearing is not necessary. The exchange of several letters, in which Galanida’s wife, a lawyer with the City Prosecutor’s Office, assisted him, gave Galanida an opportunity to respond to the charges against him.

C. G.R. No. 153569 January 24, 2012 LOLITA S. CONCEPCION vs. MINEX IMPORT CORPORATION/MINERAMA CORPORATION, KENNETH MEYERS, SYLVIA P. MARIANO, and VINA MARIANO, Labor Law; Termination of Employment; To dismiss an employee, the law requires the existence of a just and valid cause.—To dismiss an employee, the law requires the existence of a just and valid cause. Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latter’s representative in connection with the employee’s work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. Same; Same; Acquittal of Employee; The acquittal of the employee from the criminal prosecution for a crime committed against the interest of the employer did not automatically eliminate loss of confidence as a basis for administrative action against the employee.—In Philippine Long Distance Telephone Co. (PLDT Co.) vs. NLRC, the Court held that the acquittal of the employee from the criminal prosecution for a crime committed against the interest of the employer did not automatically eliminate loss of confidence as a basis for administrative action against the employee; and that in cases where the acts of misconduct amounted to a crime, a dismissal might still be properly ordered notwithstanding that the employee was not criminally prosecuted or was acquitted after a criminal prosecution. Same; Same; Quantum of Proof; The quantum of proof required for convicting an accused is thus higher—proof of guilt beyond reasonable doubt—than the quantum prescribed for dismissing an employee—substantial evidence.—The employer is not expected to be as strict and rigorous as a judge

in a criminal trial in weighing all the probabilities of guilt before terminating the employee. Unlike a criminal case, which necessitates a moral certainty of guilt due to the loss of the personal liberty of the accused being the issue, a case concerning an employee suspected of wrongdoing leads only to his termination as a consequence. The quantum of proof required for convicting an accused is thus higher—proof of guilt beyond reasonable doubt—than the quantum prescribed for dismissing an employee—substantial evidence. In so stating, we are not diminishing the value of employment, but only noting that the loss of employment occasions a consequence lesser than the loss of personal liberty, and may thus call for a lower degree of proof. Same; Same; The fair and reasonable opportunity required to be given to the employee before dismissal encompassed not only the giving to the employee of notice of the cause and the ability of the employee to explain, but also the chance to defend against the accusation.—The fair and reasonable opportunity required to be given to the employee before dismissal encompassed not only the giving to the employee of notice of the cause and the ability of the employee to explain, but also the chance to defend against the accusation. This was our thrust in Philippine Pizza, Inc. v. Bungabong, 458 SCRA 288 (2005), where we held that the employee was not afforded due process despite the dismissal being upon a just cause, considering that he was not given a fair and reasonable opportunity to confront his accusers and to defend himself against the charge of theft notwithstanding his having submitted his explanation denying that he had stolen beer from the company dispenser. The termination letter was issued a day before the employee could go to the HRD Office for the investigation, which made it clear to him that the decision to terminate was already final even before he could submit his side and refute the charges against him. Nothing that he could say or do at that point would have changed the decision to dismiss him. Such omission to give the employee the benefit of a hearing and investigation before his termination constituted an infringement of his constitutional right to due process by the employer. D. G.R. No. 189082.

July 11, 2012.*

E. JOSEPHINE RUIZ vs. WENDEL OSAKA REALTY CORP., D.M. WENCESLAO AND ASSOCIATES, INC. and DELFIN J. WENCESLAO, JR., Labor Law; Transfer of Employees; An employer has the inherent right to transfer or assign an employee in pursuance of its legitimate business interest, subject only to the condition that the move be not motivated by bad faith.—An employer has the inherent right to transfer or assign an employee in pursuance of its legitimate business interest, subject only to the condition that the move be not motivated by bad faith. x x x Although it is true that petitioner has yet to be proven guilty, respondents had the authority to reassign her, pending investigation. As held in Blue Dairy Corporation and/or Aviguetero and Miguel v. NLRC and Recalde: Re-assignments made by management pending investigation of irregularities allegedly committed by an employee fall within the ambit of management prerogative. The purpose of reassignments is no different from that of preventive suspension which management could validly impose as a disciplinary measure for the protection of the company’s property pending investigation of any alleged malfeasance or misfeasance committed by the employee. Same; Same; Management Prerogative; An employer’s decision to transfer an employee, if made in good faith, is a valid exercise of a management prerogative, although it may result in personal inconvenience or hardship to the employee.—An employer’s decision to transfer an employee, if made in good faith, is a valid exercise of a management prerogative, although it may result in personal inconvenience or hardship to the employee. We have already ruled that the transfer of the employment of petitioner to Cavite was not motivated by bad faith. Thus, any resulting inconvenience or hardship on her part is of no moment. Same; Termination of Employments; In labor cases, directors and officers are solidarily liable with the corporation for the termination of employment of corporate employees if their termination was committed with malice or bad faith.—In labor cases, directors and officers are solidarily liable with the corporation for the termination of employment of corporate employees if their termination was committed with malice or bad

faith. The ruling applies when a corporate officer acts with malice or bad faith in suspending an employee. Such malice or bad faith is not present in this case.

Submission of Evidence for the First Time on Appeal A. G.R. No. 175170 September 5, 2012 MISAMIS ORIENTAL II COOPERATIVE (MORESCO CAGA-LAWAN,

ELECTRIC SERVICE II), vs. VIRGILIO M.

Labor Law; Transfer of Employees; Management Prerogative; It is within the ambit of the employer’s prerogative to transfer an employee for valid reasons and according to the requirement of its business, provided that the transfer does not result in demotion in rank or diminution of salary, benefits and other privileges.―The rule is that it is within the ambit of the employer’s prerogative to transfer an employee for valid reasons and according to the requirement of its business, provided that the transfer does not result in demotion in rank or diminution of salary, benefits and other privileges. This Court has always considered the management’s prerogative to transfer its employees in pursuit of its legitimate interests. But this prerogative should be exercised without grave abuse of discretion and with due regard to the basic elements of justice and fair play, such that if there is a showing that the transfer was unnecessary or inconvenient and prejudicial to the employee, it cannot be upheld. Same; Evidence; When there is doubt between the evidence submitted by the employer and that submitted by the employee, the scales of justice must be tilted in favor of the employee.―When there is doubt between the evidence submitted by the employer and that submitted by the employee, the scales of justice must be tilted in favor of the employee. This is consistent with the rule that an employer’s cause could only succeed on the strength of its own evidence and not on the weakness of the employee’s evidence.

Thus, MORESCO II cannot rely on the weakness of Ortiz’s certification in order to give more credit to its own evidence. Self-serving and unsubstantiated declarations are not sufficient where the quantum of evidence required to establish a fact is substantial evidence, described as more than a mere scintilla. “The evidence must be real and substantial, and not merely apparent.” MORESCO II has miserably failed to discharge the onus of proving the validity of Cagalawan’s transfer. Same; Bad Faith; Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud.―“[B]ad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud.” Here, although we agree with the Labor Arbiter that Ke-e acted in an arbitrary manner in effecting Cagalawan’s transfer, the same, absent any showing of some dishonest or wrongful purpose, does not amount to bad faith.

Constructive Dismissal A. G.R. No. 173882 February 15, 2012 JULIE’S BAKESHOP and/or Edgar Reyes vs. Henry Arnaiz, EDGAR NAPAL,** and Jonathan Tolores, Labor Law; Appeals; Findings of facts of the National Labor Relations Commission (NLRC), affirming those of the Labor Arbiter, are accorded respect and due consideration when supported by substantial evidence.—Indeed, “factual findings of labor officials who are deemed to have acquired expertise in matters within their respective jurisdictions are generally accorded not

only respect, but even finality.” It is a well-entrenched rule that findings of facts of the NLRC, affirming those of the Labor Arbiter, are accorded respect and due consideration when supported by substantial evidence. We, however, find that the doctrine of great respect and finality has no application to the case at bar. As stated, the Labor Arbiter dismissed respondents’ complaints on mere technicality. The NLRC, upon appeal, then came up with three divergent rulings. At first, it remanded the case to the Labor Arbiter. However, in a subsequent resolution, it decided to resolve the case on the merits by ruling that respondents were constructively dismissed. But later on, it again reversed itself in its third and final resolution of the case and ruled in petitioners’ favor. Therefore, contrary to Reyes’s claim, the NLRC did not, on any occasion, affirm any factual findings of the Labor Arbiter. The CA is thus correct in reviewing the entire records of the case to determine which findings of the NLRC is sound and in accordance with law. Besides, the CA, at any rate, may still resolve factual issues by express mandate of the law despite the respect given to administrative findings of fact. Same; Management Prerogative; Management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.—We have held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers. The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of labor.

Same; Termination of Employment; Constructive Dismissal; The employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank or a diminution in salary and other benefits. If the employer fails to overcome this burden of proof, the employee’s transfer is tantamount to unlawful constructive dismissal.—In constructive dismissal cases, the employer has the burden of proving that the transfer of an employee is for just or valid ground, such as genuine business necessity. The employer must demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank or a diminution in salary and other benefits. “If the employer fails to overcome this burden of proof, the employee’s transfer is tantamount to unlawful constructive dismissal.” Same; Same; Same; Demotion; Demotion involves a situation in which an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in salary.— “[D]emotion involves a situation in which an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in salary.” When there is a demotion in rank and/or a diminution in pay; when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee; or when continued employment is rendered impossible, unreasonable or unlikely, the transfer of an employee may constitute constructive dismissal. Same; Same; Same; Abandonment; A charge of abandonment is inconsistent with the filing of a complaint for constructive dismissal.—Petitioners’ claim that respondents abandoned their job stands on shallow grounds. Respondents cannot be faulted for

refusing to report for work as they were compelled to quit their job due to a demotion without any just cause. Moreover, we have consistently held that a charge of abandonment is inconsistent with the filing of a complaint for constructive dismissal. Respondents’ demand to maintain their positions as chief bakers by filing a case and asking for the relief of reinstatement belies abandonment. As the transfer proves unbearable to respondents as to foreclose any choice on their part except to forego continued employment, same amounts to constructive dismissal for which reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time their compensation was withheld up to the time of their actual reinstatement, should be granted. The CA, therefore, did not err in awarding the reliefs prayed for by the respondents as they were, without a doubt, constructively dismissed.

Loss of Trust And Confidence

A. G.R. No. 17377 January 30, 2012 MANILA ELECTRIC COMPANY vs. MA. LUISA BELTRAN Labor Law; Termination of Employment; Loss of Trust and Confidence; For loss of trust and confidence to be a valid ground for dismissal, it must be based on a willful breach of trust and founded on clearly established facts.—For loss of trust and confidence to be a valid ground for dismissal, it must be based on a willful breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. In addition, loss of trust and confidence must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion.

Same; Same; The burden of proving the legality of an employee’s dismissal lies with the employer.—It should be emphasized at this point that the burden of proving the legality of an employee’s dismissal lies with the employer. “Unsubstantiated suspicions, accusations, and conclusions of employers do not provide legal justification for dismissing employees.” “[M]ere conjectures cannot work to deprive employees of their means of livelihood.” To begin with, MERALCO cannot claim or conclude that Beltran misappropriated the money based on mere suspicion. The NLRC thus erred in concluding that Beltran made use of the money from the mere fact that she took a leave of absence after having been reminded of the unremitted funds. And even if Beltran delayed handing over the funds to the company, MERALCO still has the burden of proof to show clearly that such act of negligence is sufficient to justify termination from employment. Moreover, we find that Beltran’s delay does not clearly and convincingly establish a willful breach on her part, that is, which is done “intentionally, knowingly and purposely, without any justifiable excuse.” True, the reasons Beltran proffered for her delay in remitting the cash payment are mere allegations without any concrete proof. Nonetheless, we emphasize that as the employer, the burden still lies on MERALCO to provide clear and convincing facts upon which the alleged loss of confidence is to be made to rest.

Same; Same; Gross Negligence; To justify removal from service, the negligence should be gross and habitual.—Undoubtedly, Beltran was remiss in her duties for her failure to immediately turn over Chang’s payment to the company. Such negligence, however, is not sufficient to warrant separation from employment. To justify removal from service, the negligence should be gross and habitual. “Gross negligence x x x is the want of even slight care, acting or omitting to act in a situation where there is duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to consequences insofar as other persons may be affected.” Habitual neglect, on the other hand, connotes repeated failure to perform one’s duties for a period of time, depending upon the circumstances. No concrete evidence was presented by MERALCO to show that Beltran’s delay in remitting the funds was done intentionally. Neither was it shown that same is willful, unlawful and felonious contrary to MERALCO’s finging as stated in the letter of termination it sent to Beltran. Surely, Beltran’s single

and isolated act of negligence cannot justify her dismissal from service.

Same; Penalties; Where a penalty less punitive would suffice, whatever missteps may be committed by an employee ought not to be visited with a consequence so severe such as dismissal from employment.—Under the circumstances, MERALCO’s sanction of dismissal will not be commensurate to Beltran’s inadvertence not only because there was no clear showing of bad faith and malice but also in consideration of her untainted record of long and dedicated service to MERALCO. In the similar case of Philippine Long Distance Telephone Company v. Berbano, Jr., 606 SCRA 81 (2009), we held that: The magnitude of the infraction committed by an employee must be weighed and equated with the penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of dismissal or termination from the service. The employer should bear in mind that in termination cases, what is at stake is not simply the employee’s job or position but [her] very livelihood. Where a penalty less punitive would suffice, whatever missteps may be committed by an employee ought not to be visited with a consequence so severe such as dismissal from employment. Hence, we find no reversible error or any grave abuse of discretion on the part of the CA in ordering Beltran’s reinstatement without backwages. The forfeiture of her salary is an equitable punishment for the simple negligence committed.

Probationary Employment

A. G.R. No. 172223 February 6, 2012 CANADIAN OPPORTUNITIES DALANGIN, JR.,

UNLIMITED,

INC.,

vs.

BART

Q.

Remedial Law; Civil Procedure; Appeals; The Supreme Court is not a trier of facts, the resolution of factual issues being the function of lower courts whose findings are received with respect and are binding on the Court subject to certain exceptions such as when there are conflicting findings of

fact by the Court of Appeals, on the one hand, and the trial court or government agency concerned, on the other, as in the present case.—As a rule, the Court is not a trier of facts, the resolution of factual issues being the function of lower courts whose findings are received with respect and are binding on the Court subject to certain exceptions. A recognized exception to the rule is the circumstance in which there are conflicting findings of fact by the CA, on the one hand, and the trial court or government agency concerned, on the other, as in the present case. The factual findings of the NLRC on the dispute between Dalangin and the company are at variance with those of the CA, thus necessitating our review of the case, especially the evidence on record.

Labor Law; Probationary Employees; A probationary appointment gives the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he would be a proper and efficient employee.—In International Catholic Migration Commission v. NLRC, 169 SCRA 606 (1989), the Court explained that a probationary employee, as understood under Article 281 of the Labor Code, is one who is on trial by an employer, during which, the latter determines whether or not he is qualified for permanent employment. A probationary appointment gives the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he would be a proper and efficient employee. Dalangin was barely a month on the job when the company terminated his employment. He was found wanting in qualities that would make him a “proper and efficient” employee or, as the company put it, he was unfit and unqualified to continue as its Immigration and Legal Manager.

Same; Same; The length of time the probationary employee remains on probation depends on the parties’ agreement, but it shall not exceed six (6) months under Article 281 of the Labor Code, unless it is covered by an apprenticeship agreement stipulating a longer period.—The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the employer and the employee during the period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the latter seeks to prove to the former that he has the qualifications to meet the reasonable standards for permanent employment. The “trial period” or the length of time the probationary employee remains on probation depends on the parties’ agreement, but it shall not exceed six (6) months under Article 281 of the Labor Code, unless it is covered by an apprenticeship agreement stipulating a longer period. Article 281 provides: Probationary employment.—Probationary employment shall not

exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

B. G.R. No. 155505 February 15, 2007 EMILIO M. CAPAROSO and JOEVE P. QUINDIPAN, vs. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, COMPOSITE ENTERPRISES INCORPORATED, and EDITH TAN

Labor Law; Fixed-Term Employment; Even if an employee is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, it does not preclude the fixing of employment for a definite period.—Under Article 280 of the Labor Code, a regular employee is (1) one who is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, or (2) a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed. However, even if an employee is engaged to perform activities that are necessary or desirable in the usual trade or business of the employer, it does not preclude the fixing of employment for a definite period.

Same; Same; Criteria for Fixed-Term Employments.—The Court thus laid down the criteria under which fixed-term employment could not be said to be in circumvention of the law on security of tenure, thus: 1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or 2. It satisfactorily appears that the employer and the

employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter.

C. G.R. No. 177937 January 19, 2011 ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION and/or JESS MANUEL, vs. IRENE R. RANCHEZ

Labor Law; Probationary Employees; Termination of Employment; A probationary employee, like a regular employee, enjoys security of tenure; Grounds for termination on the services of an employee engaged on probationary basis.—There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. Same; Same; Same; The Labor Code mandates the employer to furnish the worker whose employment is sought to be terminated, a written notice containing a statement of the causes of termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires.—Article 277(b) of the Labor Code mandates that subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal, except for just and authorized cause and without prejudice to the requirement of notice under Article 283 of the same Code, the employer shall furnish the worker, whose employment is sought to be terminated, a

written notice containing a statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment. Same; Same; Same; The due process requirements under the Labor Code are mandatory and may not be supplanted by police investigation or court proceedings; Criminal aspect of the case is considered independent of the administrative aspect.—As correctly pointed out by the NLRC, the due process requirements under the Labor Code are mandatory and may not be supplanted by police investigation or court proceedings. The criminal aspect of the case is considered independent of the administrative aspect. Thus, employers should not rely solely on the findings of the Prosecutor’s Office. They are mandated to conduct their own sep,arate investigation, and to accord the employee every opportunity to defend himself. Furthermore, respondent was not represented by counsel when she was strip-searched inside the company premises or during the police investigation, and in the preliminary investigation before the Prosecutor’s Office. Same; Constructive Dismissals; Relief granted to an illegally or constructively dismissed employee; these two reliefs are separate and distinct from each other and are awarded conjunctively.—As an illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively. Same; Same; The backwages that should be awarded to respondent shall be reckoned from the time of her constructive dismissal until the date of the termination of her employment; The computation should not cover the entire period from the time her compensation was withheld up to the time of her actual reinstatement.—The backwages that should be awarded to respondent shall be reckoned from the time of her constructive dismissal until the date of the termination of her employment, i.e., from October 30, 1997 to March 14, 1998. The computation should not cover the entire period from the time her compensation was withheld up to the time of her actual reinstatement. This is because respondent was a probationary employee, and the lapse of her probationary employment without her appointment as a regular

employee of petitioner Supermarket effectively severed the employeremployee relationship between the parties. Same; Types of Employment; In all cases involving employees engaged on probationary basis, the employer shall make known to its employees the standards under which they will qualify as regular employees at the time of their engagement; Where no standards are made known to an employee at the time, he shall be deemed a regular employee, unless the job is self-descriptive, like maid, cook, driver, or messenger.—In all cases involving employees engaged on probationary basis, the employer shall make known to its employees the standards under which they will qualify as regular employees at the time of their engagement. Where no standards are made known to an employee at the time, he shall be deemed a regular employee, unless the job is selfdescriptive, like maid, cook, driver, or messenger. However, the constitutional policy of providing full protection to labor is not intended to oppress or destroy management.

D. G.R. No. 186169 August 1, 2012 MYLENE CARVAJAL, vs. LUZON DEVELOPMENT BANK AND/OR OSCAR Z. RAMIREZ

Civil Procedure; Appeals; Petition for Review on Certiorari; Only questions of law can be raised in a petition for review on certiorari under Rule 45 of the Rules of Court, the rule admits of certain exceptions.—When the NLRC decision was reversed by the Court of Appeals, from which the issue was elevated to us, we had a situation where “the findings of facts are conflicting.” Thus, we find applicable the rule that while generally, only questions of law can be raised in a petition for review on certiorari under Rule 45 of the Rules of Court, the rule admits of certain exceptions, namely: (1) when the findings are grounded entirely on speculations, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is a grave abuse of discretion; (4) when the judgment is based on misappreciation of facts; (5) when the findings of fact are conflicting; (6) when in making its findings, the same are contrary to the admissions of both appellant and appellee; (7) when the findings

are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.

Same; Same; Same; The Supreme Court has the authority to review matters not specifically raised or assigned as error by the parties.—Truly, it is axiomatic that an appeal, once accepted by this Court, throws the entire case open to review, and that this Court has the authority to review matters not specifically raised or assigned as error by the parties, if their consideration is necessary in arriving at a just resolution of the case.

Labor Law; Probationary Employees; A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement.—A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.

Same; Punctuality; Habitual Tardiness; Punctuality; Punctuality is a reasonable standard imposed on every employee, whether in government or private sector. As a matter of fact, habitual tardiness is a serious offense that may very well constitute gross or habitual neglect of duty, a just cause to dismiss a regular employee.—Punctuality is a reasonable standard imposed on every employee, whether in government or private sector. As a matter of fact, habitual tardiness is a serious offense that may very well constitute gross or habitual neglect of duty, a just cause to dismiss a regular employee. Assuming

that petitioner was not apprised of the standards concomitant to her job, it is but common sense that she must abide by the work hours imposed by the bank. As we have aptly stated in Aberdeen Court, Inc. v. Agustin, Jr., 456 SCRA 32 (2005), the rule on reasonable standards made known to the employee prior to engagement should not be used to exculpate a probationary employee who acts in a manner contrary to basic knowledge and common sense, in regard to which there is no need to spell out a policy or standard to be met.

Same; Probationary Employees; Before an employer hires an employee, the former can require the employee, upon his engagement, to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.—More importantly, satisfactory performance is and should be one of the basic standards for regularization. Naturally, before an employer hires an employee, the former can require the employee, upon his engagement, to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. This is the concept of probationary employment which is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other hand, seeks to prove to the satisfaction of the employer that he has the qualifications to meet the reasonable standards for permanent employment.

Same; Same; By the very nature of a probationary employment, the employee knows from the very start that he will be under close observation and his performance of his assigned duties and functions would be under continuous scrutiny by his superiors.—As elucidated by this Court in Philippine Daily Inquirer, Inc. v. Magtibay, Jr., 528 Unlike under the first ground for the valid termination of probationary employment which is for just cause, the second ground [failure to qualify in accordance with the standards prescribed by employer] does not require notice and hearing. Due process of law for this second ground consists of making the reasonable standards expected of the employee during his probationary period known to him at the time of his probationary employment. By the very nature of a probationary employment, the employee knows from the very start that he will be under close observation and his performance of his assigned duties and functions would be under continuous scrutiny by his superiors. It is in apprising him of the standards against which

his performance shall be continuously assessed where due process regarding the second ground lies, and not in notice and hearing as in the case of the first ground.

Same; Same; Termination of Employment; If the termination is for cause, it may be done anytime during the probation; the employer does not have to wait until the probation period is over.—In sum, petitioner was validly dismissed from probationary employment before the expiration of her 6-month probationary employment contract. If the termination is for cause, it may be done anytime during the probation; the employer does not have to wait until the probation period is over. With a valid reason for petitioner’s dismissal coupled with the proper observance of due process, the claim for backwages must necessarily fail.

Computation of Separation Pay in Lieu of Reisntatement

A. G.R. No. 185829 April 25, 2012 ARMANDO ALILING, vs. JOSE B. FELICIANO, MANUEL F. SAN MATEO III, JOSEPH R. LARIOSA, and WIDE WIDE WORLD EXPRESS CORPORATION. Remedial Law; Civil Procedure; Appeals; An appeal, once accepted by the Supreme Court, throws the entire case open to review, and that this Court has the authority to review matters not specifically raised or assigned as error by the parties.—We said as much in Sociedad Europea de Financiacion, SA v. Court of Appeals, 193 SCRA 105 (1991), “It is axiomatic that an appeal, once accepted by this Court, throws the entire case open to review, and that this Court has the authority to review matters not specifically raised or assigned as error by the parties, if their consideration is necessary in arriving at a just resolution of the case.”

Same; Same; Same; Labor Law; Findings of the Labor Arbiter, when affirmed by the National Labor Relations Commission (NLRC) and the Court of Appeals, are binding on the Supreme Court, unless patently

erroneous.—Settled is the rule that the findings of the Labor Arbiter, when affirmed by the NLRC and the Court of Appeals, are binding on the Supreme Court, unless patently erroneous. It is not the function of the Supreme Court to analyze or weigh all over again the evidence already considered in the proceedings below. The jurisdiction of this Court in a petition for review on certiorari is limited to reviewing only errors of law, not of fact, unless the factual findings being assailed are not supported by evidence on record or the impugned judgment is based on a misapprehension of facts. The more recent Peñafrancia Tours and Travel Transport, Inc., v. Sarmiento, 634 SCRA 279 (2010), has reaffirmed the above ruling, to wit: Finally, the CA affirmed the ruling of the NLRC and adopted as its own the latter’s factual findings. Long-established is the doctrine that findings of fact of quasi-judicial bodies x x x are accorded respect, even finality, if supported by substantial evidence. When passed upon and upheld by the CA, they are binding and conclusive upon this Court and will not normally be disturbed. Though this doctrine is not without exceptions, the Court finds that none are applicable to the present case.

Labor Law; Termination of Employment; Gross Inefficiency; “Gross inefficiency” falls within the purview of “other causes analogous to the foregoing,” this constitutes, therefore, just cause to terminate an employee under Article 282 of the Labor Code.—Article 282 of the Labor Code considers any of the following acts or omission on the part of the employee as just cause or ground for terminating employment: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (e) Other causes analogous to the foregoing. (Emphasis supplied) In Lim v. National Labor Relations Commission, 259 SCRA 485 (1996), the Court considered inefficiency as an analogous just cause for termination of employment under Article 282 of the Labor Code: We cannot but agree with PEPSI that “gross inefficiency” falls within the purview of “other causes analogous to the foregoing,” this constitutes, therefore, just cause to terminate an employee under Article 282 of the Labor Code. One is analogous to another if it is susceptible of comparison with the latter either in general or in some specific detail; or has a close relationship with the latter. “Gross

inefficiency” is closely related to “gross neglect,” for both involve specific acts of omission on the part of the employee resulting in damage to the employer or to his business. In Buiser vs. Leogardo, this Court ruled that failure to observed prescribed standards to inefficiency may constitute just cause for dismissal. Same; Same; Same; An employee’s failure to meet sales or work quotas falls under the concept of gross inefficiency, which in turn is analogous to gross neglect of duty that is a just cause for dismissal under Article 282 of the Code.—In fine, an employee’s failure to meet sales or work quotas falls under the concept of gross inefficiency, which in turn is analogous to gross neglect of duty that is a just cause for dismissal under Article 282 of the Code. However, in order for the quota imposed to be considered a valid productivity standard and thereby validate a dismissal, management’s prerogative of fixing the quota must be exercised in good faith for the advancement of its interest. The duty to prove good faith, however, rests with WWWEC as part of its burden to show that the dismissal was for a just cause. WWWEC must show that such quota was imposed in good faith.

Same; Termination of Employment; Probationary Employees; While probationary employees do not enjoy permanent status, they enjoy the constitutional protection of security of tenure—they can only be terminated for cause or when they otherwise fail to meet the reasonable standards made known to them by the employer at the time of their engagement.—Employees must be reminded that while probationary employees do not enjoy permanent status, they enjoy the constitutional protection of security of tenure. They can only be terminated for cause or when they otherwise fail to meet the reasonable standards made known to them by the employer at the time of their engagement. Respondent WWWEC miserably failed to prove the termination of petitioner was for a just cause nor was there substantial evidence to demonstrate the standards were made known to the latter at the time of his engagement. Hence, petitioner’s right to security of tenure was breached.

Same; Same; To effect a legal dismissal, the employer must show not only a valid ground therefor, but also that procedural due process has properly been observed.—To effect a legal dismissal, the employer must show not only a valid ground therefor, but also that procedural due

process has properly been observed. When the Labor Code speaks of procedural due process, the reference is usually to the two (2)-written notice rule envisaged in Section 2 (III), Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, which provides: Section 2. Standard of due process: requirements of notice.—In all cases of termination of employment, the following standards of due process shall be substantially observed. I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice [of] termination served on the employee indicating that upon due consideration of all the circumstance, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employee’s last known address. Same; Same; Separation Pay; Backwages; The computation of separation pay in lieu of reinstatement includes the period for which backwages were awarded.—As the CA correctly observed, “To reinstate petitioner [Aliling] would only create an atmosphere of antagonism and distrust, more so that he had only a short stint with respondent company.” The Court need not belabor the fact that the patent animosity that had developed between employer and employee generated what may be considered as the arbitrary dismissal of the petitioner. Following the pronouncements of this Court Sagales v. Rustan’s Commercial Corporation, 572 SCRA 89 (2008), the computation of separation pay in lieu of reinstatement includes the period for which backwages were awarded: Thus, in lieu of reinstatement, it is but proper to award petitioner separation pay computed at one-month salary for every year of service, a fraction of at least six (6) months considered as one whole year. In the computation of separation pay, the period where backwages are awarded must be included. Thus, Aliling is entitled to both backwages and separation pay (in lieu of reinstatement) in the amount of one (1) month’s salary for every year of service, that is, from June 11, 2004 (date of employment contract) until the finality of this decision with a fraction of a year of at least six (6) months to be considered as one (1) whole year. As determined by the labor arbiter, the basis for the computation of backwages and separation pay will be Aliling’s monthly salary at PhP 17,300.

Same; Same; Solidary Liability; In labor cases, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith.—A corporation being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them, acting as such corporate agents are not theirs but the direct accountabilities of the corporation they represent. True solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases: 1. When directors and trustees or, in appropriate cases, the officers of a corporation: (a) vote for or assent to patently unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; x x x x In labor cases, for instance, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith.

Exception to the Rule on Regular Employment

A. G.R. No. 167714 March 7, 2007 ROWELL INDUSTRIAL CORPORATION, petitioner, vs. HON. COURT OF APPEALS and JOEL TARIPE

Labor Law; Employer-Employee Relationship; Article 280 of the Labor Code, as amended, classifies employees into three categories, namely, (1) regular employees, (2) project employees, and (3) casual employees; Regular employees are classified into (a) regular employees by nature of work, and, (b) regular employees by years of service.—Article 280 of the Labor Code, as amended, classifies employees into three categories, namely: (1) regular employees or those whose work is necessary or desirable to the usual business of the employer; (2) project employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season; and (3) casual employees or those who are neither regular

nor project employees. Regular employees are further classified into: (1) regular employees by nature of work; and (2) regular employees by years of service. The former refers to those employees who perform a particular activity which is necessary or desirable in the usual business or trade of the employer, regardless of their length of service; while the latter refers to those employees who have been performing the job, regardless of the nature thereof, for at least a year.

Same; Same; Fixed-Term Employment; Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period.—Article 280 of the Labor Code, as amended, however, does not proscribe or prohibit an employment contract with a fixed period. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is nothing essentially contradictory between a definite period of employment and the nature of the employee’s duties. What Article 280 of the Labor Code, as amended, seeks to prevent is the practice of some unscrupulous and covetous employers who wish to circumvent the law that protects lowly workers from capricious dismissal from their employment. The aforesaid provision, however, should not be interpreted in such a way as to deprive employers of the right and prerogative to choose their own workers if they have sufficient basis to refuse an employee a regular status. Management has rights which should also be protected.

Same; Same; Same; Guidelines.—Although Article 280 of the Labor Code, as amended, does not forbid fixed term employment, it must, nevertheless, meet any of the following guidelines in order that it cannot be said to circumvent security of tenure: (1) that the fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or (2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter.

Same; Same; Same; Contracts of Adhesion; Words and Phrases; A contract in which the terms prepared by only one party and the other party merely affixes his signature signifying his adhesion thereto is called contract of adhesion, an agreement in which the parties bargaining are not on equal footing, the weaker party’s participation being reduced to the alternative “to take it or leave it.”—Petitioner RIC failed to controvert the claim of respondent Taripe that he was made to sign the contract of employment, prepared by petitioner RIC, as a condition for his hiring. Such contract in which the terms are prepared by only one party and the other party merely affixes his signature signifying his adhesion thereto is called contract of adhesion. It is an agreement in which the parties bargaining are not on equal footing, the weaker party’s participation being reduced to the alternative “to take it or leave it.” In the present case, respondent Taripe, in need of a job, was compelled to agree to the contract, including the five-month period of employment, just so he could be hired. Hence, it cannot be argued that respondent Taripe signed the employment contract with a fixed term of five months willingly and with full knowledge of the impact thereof.

Same; Same; Regular Employees; The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the casual business or trade of the employer.—Settled is the rule that the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the casual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Same; Same; Same; Regular employees enjoy security of tenure and they can only be dismissed for just cause and with due process, notice and hearing.—Well-established is the rule that regular employees enjoy security of tenure and they can only be dismissed for just cause and with due process, notice and hearing. And in case of employees’ dismissal, the burden is on the employer to prove that the dismissal was legal. Thus, respondent Taripe’s summary dismissal, not being based on any of the just or authorized causes enumerated under Articles 282, 283, and 284 of the Labor Code, as amended, is illegal.

XI

Pages 811 to 868

Termination by Employer

Theft by co-Employee’s Property

A. G.R. No. 193676 June 20, 2012 COSMOS BOTTLING CORP., vs. WILSON FERMIN G.R. No. 194303 June 20, 2012 WILSON B. FERMIN, vs. COSMOS BOTTLING CORPORATION and CECILIA BAUTISTA Labor Law; Termination of Employment; Serious Misconduct; Theft committed against a co-employee is considered as a case analogous to serious misconduct, for which the penalty of dismissal from service may be meted out to the erring employee.—Theft committed against a coemployee is considered as a case analogous to serious misconduct, for which the penalty of dismissal from service may be meted out to the erring employee, viz.: Article 282 of the Labor Code provides: Article 282. Termination by Employer.—An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or his representatives in connection with his work; x x x x x x x x x (e) Other causes analogous to the foregoing. Misconduct involves “the transgression of some established and definite rule of action, forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.” For misconduct to be serious and therefore a valid ground for dismissal, it must be: 1. of grave and aggravated character and not merely trivial or unimportant and 2. connected with the work of the employee. In this case, petitioner dismissed respondent based on the NBI’s finding that the latter stole and used Yuseco’s credit cards. But since the theft was not committed against petitioner itself but against one of its employees, respondent’s

misconduct was not work-related and therefore, she could not be dismissed for serious misconduct. Nonetheless, Article 282(e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison to another in general or in specific detail. For an employee to be validly dismissed for a cause analogous to those enumerated in Article 282, the cause must involve a voluntary and/or willful act or omission of the employee. A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employee’s moral depravity. Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct.

Sexual Intercourse as Serious Misconduct

A. G.R. No. 194884 October 22, 2014 IMASEN PHILIPPINE MANUFACTURING CORPORATION, vs. RAMONCHITO T. ALCON and JOANN S. PAPA Labor Law; Security of Tenure; The law and jurisprudence guarantee to every employee security of tenure.—The law and jurisprudence guarantee to every employee security of tenure. This textual and the ensuing jurisprudential commitment to the cause and welfare of the working class proceed from the social justice principles of the Constitution that the Court zealously implements out of its concern for those with less in life. Thus, the Court will not hesitate to strike down as invalid any employer act that attempts to undermine workers’ tenurial security. All these the State undertakes under Article 279 (now Article 293) of the Labor Code which bar an employer from terminating the services of an employee, except for just or authorized cause and upon observance of due process. Same; In protecting the rights of the workers, the law, however, does not authorize the oppression or selfdestruction of the employer.—In protecting the rights of the workers, the law, however, does not authorize the oppression or self-destruction of the employer. The constitutional commitment

to the policy of social justice cannot be understood to mean that every labor dispute shall automatically be decided in favor of labor. The constitutional and legal protection equally recognize the employer’s right and prerogative to manage its operation according to reasonable standards and norms of fair play. Accordingly, except as limited by special law, an employer is free to regulate, according to his own judgment and discretion, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, worker supervision, layoff of workers and the discipline, dismissal and recall of workers. As a general proposition, an employer has free reign over every aspect of its business, including the dismissal of his employees as long as the exercise of its management prerogative is done reasonably, in good faith, and in a manner not otherwise intended to defeat or circumvent the rights of workers. Same; Termination of Employment; Serious Misconduct; To constitute a valid cause for the dismissal within the text and meaning of Article 282 of the Labor Code, the employee’s misconduct must be serious, i.e., of such grave and aggravated character and not merely trivial or unimportant.—The just causes for dismissing an employee are provided under Article 282 (now Article 296) of the Labor Code. Under Article 282(a), serious misconduct by the employee justifies the employer in terminating his or her employment. Misconduct is defined as an improper or wrong conduct. It is a 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. To constitute a valid cause for the dismissal within the text and meaning of Article 282 of the Labor Code, the employee’s misconduct must be serious, i.e., of such grave and aggravated character and not merely trivial or unimportant. Additionally, the misconduct must be related to the performance of the employee’s duties showing him to be unfit to continue working for the employer. Further, and equally important and required, the act or conduct must have been performed with wrongful intent. Same; Same; Same; Sexual Intercourse in the Work Premises; Dismissal situations (on the ground of serious misconduct)

involving sexual acts, particularly sexual intercourse committed by employees inside company premises and during work hours, are not usual violations and are not found in abundance under jurisprudence.—Dis-missal situations (on the ground of serious misconduct) involving sexual acts, particularly sexual intercourse committed by employees inside company premises and during work hours, are not usual violations and are not found in abundance under jurisprudence. Thus, in resolving the present petition, we are largely guided by the principles we discussed above, as applied to the totality of the circumstances that surrounded the petitioners’ dismissal. In other words, we view the petitioners’ act from the prism of the elements that must concur for an act to constitute serious misconduct, analyzed and understood within the context of the overall circumstances of the case. In taking this approach, we are guided, too, by the jurisdictional limitations that a Rule 45 review of the CA’s Rule 65 decision in labor cases imposes on our discretion. Same; Same; Same; Same; Whether aroused by lust or inflamed by sincere affection, sexual acts should be carried out at such place, time and circumstance that, by the generally accepted norms of conduct, will not offend public decency nor disturb the generally held or accepted social morals.—Sexual acts and intimacies between two consenting adults belong, as a principled ideal, to the realm of purely private relations. Whether aroused by lust or inflamed by sincere affection, sexual acts should be carried out at such place, time and circumstance that, by the generally accepted norms of conduct, will not offend public decency nor disturb the generally held or accepted social morals. Under these parameters, sexual acts between two consenting adults do not have a place in the work environment. Indisputably, the respondents engaged in sexual intercourse inside company premises and during work hours. These circumstances, by themselves, are already punishable misconduct. Added to these considerations, however, is the implication that the respondents did not only disregard company rules but flaunted their disregard in a manner that could reflect adversely on the status of ethics and morality in the company.

Pregnancy Out of wedlock as Serious Misconduct

A. G.R. No. 187226 January 28, 2015 CHERYLL SANTOS LEUS, vs. ST. SCHOLASTICA’S COLLEGE WESTGROVE and/or SR. EDNA QUIAMBAO, OSB,

Remedial Law; Civil Procedure; Appeals; Points of law, theories, issues, and arguments not brought to the attention of the trial court ought not to be considered by a reviewing court, as these cannot be raised for the first time on appeal.—“It is wellestablished that issues raised for the first time on appeal and not raised in the proceedings in the lower court are barred by estoppel. Points of law, theories, issues, and arguments not brought to the attention of the trial court ought not to be considered by a reviewing court, as these cannot be raised for the first time on appeal. To consider the alleged facts and arguments belatedly raised would amount to trampling on the basic principles of fair play, justice, and due process.”

Department of Education; Schools; Section 57 specifically empowers the Department of Education (DepEd) to promulgate rules and regulations necessary for the administration, supervision and regulation of the educational system in accordance with the declared policy of Batas Pambansa (BP) Bilang 232.—The 1992 MRPS, the regulation in force at the time of the instant controversy, was issued by the Secretary of Education pursuant to BP 232. Section 70 of BP 232 vests the Secretary of Education with the authority to issue rules and regulations to implement the provisions of BP 232. Concomitantly, Section 57 specifically empowers the Department of Education to promulgate rules and regulations necessary for the administration, supervision and regulation of the educational system in accordance with the declared policy of BP 232. The qualifications of teaching and nonteaching personnel of private schools, as well as the causes for the termination of their employment, are an integral aspect of the educational system of private schools. Indubitably, ensuring that the teaching and nonteaching personnel of private schools are not

only qualified, but competent and efficient as well goes hand in hand with the declared objective of BP 232 — establishing and maintaining relevant quality education. It is thus within the authority of the Secretary of Education to issue a rule, which provides for the dismissal of teaching and nonteaching personnel of private schools based on their incompetence, inefficiency, or some other disqualification.

Remedial Law; Civil Procedure; Appeals; In a petition for review under Rule 45 of the Rules of Court, such as the instant petition, where the Court of Appeals’ (CA’s) disposition in a labor case is sought to be calibrated, the Court’s review is quite limited.—In a petition for review under Rule 45 of the Rules of Court, such as the instant petition, where the CA’s disposition in a labor case is sought to be calibrated, the Court’s review is quite limited. In ruling for legal correctness, the Court has to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to it; the Court has to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before it, not on the basis of whether the NLRC decision on the merits of the case was correct.

Labor Law; Termination of Employment; Disgraceful and Immoral Conduct; The fact of the petitioner’s pregnancy out of wedlock, without more, is not enough to characterize the petitioner’s conduct as disgraceful or immoral.—The labor tribunals concluded that the petitioner’s pregnancy out of wedlock, per se, is “disgraceful and immoral” considering that she is employed in a Catholic educational institution. In arriving at such conclusion, the labor tribunals merely assessed the fact of the petitioner’s pregnancy vis-à-vis the totality of the circumstances surrounding the same. However, the Court finds no substantial evidence to support the aforementioned conclusion arrived at by the labor tribunals. The fact of the petitioner’s pregnancy out of wedlock, without more, is not enough to characterize the petitioner’s conduct as disgraceful or immoral. There must be substantial evidence to establish that premarital sexual relations and, consequently, pregnancy out of wedlock, are indeed considered disgraceful or immoral.

Same; Same; Same; The determination of whether a conduct is disgraceful or immoral involves a two (2)-step process: first, a consideration of the totality of the circumstances surrounding the conduct; and second, an assessment of the said circumstances vis-à-vis the prevailing norms of conduct, i.e., what the society generally considers moral and respectable.— The determination of whether a conduct is disgraceful or immoral involves a two-step process: first, a consideration of the totality of the circumstances surrounding the conduct; and second, an assessment of the said circumstances vis-à-vis the prevailing norms of conduct, i.e., what the society generally considers moral and respectable. That the petitioner was employed by a Catholic educational institution per se does not absolutely determine whether her pregnancy out of wedlock is disgraceful or immoral. There is still a necessity to determine whether the petitioner’s pregnancy out of wedlock is considered disgraceful or immoral in accordance with the prevailing norms of conduct.

Same; Same; Same; That the distinction between public and secular morality and religious morality is important because the jurisdiction of the Court extends only to public and secular morality.—In Estrada v. Escritor, 408 SCRA 1 (2003), an administrative case against a court interpreter charged with disgraceful and immoral conduct, the Court stressed that in determining whether a particular conduct can be considered as disgraceful and immoral, the distinction between public and secular morality on the one hand, and religious morality, on the other, should be kept in mind. That the distinction between public and secular morality and religious morality is important because the jurisdiction of the Court extends only to public and secular morality. The Court further explained that: The morality referred to in the law is public and necessarily secular, not religious x x x. “Religious teachings as expressed in public debate may influence the civil public order but public moral disputes may be resolved only on grounds articulable in secular terms.” Otherwise, if government relies upon religious beliefs in formulating public policies and morals, the resulting policies and morals would require conformity to what some might regard as religious programs or agenda. The nonbelievers would therefore be compelled to conform to a standard of conduct buttressed by a religious belief, i.e., to a “compelled

religion,” anathema to religious freedom. Likewise, if government based its actions upon religious beliefs, it would tacitly approve or endorse that belief and thereby also tacitly disapprove contrary religious or nonreligious views that would not support the policy. As a result, government will not provide full religious freedom for all its citizens, or even make it appear that those whose beliefs are disapproved are second-class citizens. Expansive religious freedom therefore requires that government be neutral in matters of religion; governmental reliance upon religious justification is inconsistent with this policy of neutrality. In other words, government action, including its proscription of immorality as expressed in criminal law like concubinage, must have a secular purpose. That is, the government proscribes this conduct because it is “detrimental (or dangerous) to those conditions upon which depend the existence and progress of human society” and not because the conduct is proscribed by the beliefs of one religion or the other. Although admittedly, moral judgments based on religion might have a compelling influence on those engaged in public deliberations over what actions would be considered a moral disapprobation punishable by law. After all, they might also be adherents of a religion and thus have religious opinions and moral codes with a compelling influence on them; the human mind endeavors to regulate the temporal and spiritual institutions of society in a uniform manner, harmonizing earth with heaven. Succinctly put, a law could be religious or Kantian or Aquinian or utilitarian in its deepest roots, but it must have an articulable and discernible secular purpose and justification to pass scrutiny of the religion clauses.

Same; Same; Same; The proscription against “disgraceful or immoral conduct” under Section 94(e) of the 1992 Manual of Regulations for Private Schools (MRPS), which is made as a cause for dismissal, must necessarily refer to public and secular morality.—It bears stressing that the right of an employee to security of tenure is protected by the Constitution. Perfunctorily, a regular employee may not be dismissed unless for cause provided under the Labor Code and other relevant laws, in this case, the 1992 MRPS. As stated above, when the law refers to morality, it necessarily pertains to public and secular morality and not religious morality. Thus, the proscription against “disgraceful or immoral conduct” under Section 94(e) of the 1992 MRPS, which is made as a

cause for dismissal, must necessarily refer to public and secular morality. Accordingly, in order for a conduct to be considered as disgraceful or immoral, it must be “‘detrimental (or dangerous) to those conditions upon which depend the existence and progress of human society’ and not because the conduct is proscribed by the beliefs of one religion or the other.”

Same; Same; Same; Premarital sexual relations between two consenting adults who have no impediment to marry each other, and consequently, conceiving a child out of wedlock, gauged from a purely public and secular view of morality, does not amount to a disgraceful or immoral conduct under Section 94(e) of the 1992 Manual of Regulations for Private Schools (MRPS).—Admittedly, the petitioner is employed in an educational institution where the teachings and doctrines of the Catholic Church, including that on premarital sexual relations, is strictly upheld and taught to the students. That her indiscretion, which resulted in her pregnancy out of wedlock, is anathema to the doctrines of the Catholic Church. However, viewed against the prevailing norms of conduct, the petitioner’s conduct cannot be considered as disgraceful or immoral; such conduct is not denounced by public and secular morality. It may be an unusual arrangement, but it certainly is not disgraceful or immoral within the contemplation of the law. To stress, premarital sexual relations between two consenting adults who have no impediment to marry each other, and, consequently, conceiving a child out of wedlock, gauged from a purely public and secular view of morality, does not amount to a disgraceful or immoral conduct under Section 94(e) of the 1992 MRPS.

Same; Same; Burden of Proof; Settled is the rule that in termination cases, the burden of proving that the dismissal of the employees was for a valid and authorized cause rests on the employer.—Settled is the rule that in termination cases, the burden of proving that the dismissal of the employees was for a valid and authorized cause rests on the employer. It is incumbent upon the employer to show by substantial evidence that the termination of the employment of the employees was validly made and failure to discharge that duty would mean that the dismissal is not justified and therefore illegal. “Substantial evidence is more than a mere

scintilla of evidence. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise.”

Same; Same; Security of Tenure; Words and Phrases; Security of tenure is a right which may not be denied on mere speculation of any unclear and nebulous basis.—Indubitably, bare allegations do not amount to substantial evidence. Considering that the respondents failed to adduce substantial evidence to prove their asserted cause for the petitioner’s dismissal, the labor tribunals should not have upheld their allegations hook, line and sinker. The labor tribunals’ respective findings, which were arrived at sans any substantial evidence, amounts to a grave abuse of discretion, which the CA should have rectified. “Security of tenure is a right which may not be denied on mere speculation of any unclear and nebulous basis.”

Same; Management Prerogative; The exercise of management prerogative is not absolute as it must be exercised in good faith and with due regard to the rights of labor.—The Court has held that “management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and discipline, dismissal and recall of workers. The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of labor.” Management cannot exercise its prerogative in a cruel, repressive, or despotic manner.

Same; Illegal Dismissals; Reinstatement; Separation Pay; Strained Relations; In cases of illegal dismissal, the accepted doctrine is that separation pay is available in lieu of reinstatement when the latter recourse is no longer practical or in the best interest of the parties.—Having established that the petitioner was illegally dismissed, the Court now determines the reliefs that she is entitled to and their extent. Under the law and

prevailing jurisprudence, “an illegally dismissed employee is entitled to reinstatement as a matter of right.” Aside from the instances provided under Articles 283 and 284 of the Labor Code, separation pay is, however, granted when reinstatement is no longer feasible because of strained relations between the employer and the employee. In cases of illegal reinstatement when the latter recourse is no longer practical or in the best interest of the parties.

Same; Same; Backwages; Employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement but if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision.— “Employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement but if reinstatement is no longer possible, the backwages shall be computed from the time of their illegal termination up to the finality of the decision.” Accordingly, the petitioner is entitled to an award of full backwages from the time she was illegally dismissed up to the finality of this decision.

Same; Same; Moral Damages; Exemplary Damages; The petitioner is not entitled to moral and exemplary damages; The records of this case are bereft of any clear and convincing evidence showing that the respondents acted in bad faith or in a wanton or fraudulent manner in dismissing the petitioner.— The petitioner is not entitled to moral and exemplary damages. “A dismissed employee is entitled to moral damages when the dismissal is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. Exemplary damages may be awarded if the dismissal is effected in a wanton, oppressive or malevolent manner.” “Bad faith, under the law, does not simply connote bad judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, or a breach of a known duty through some motive or interest or ill will that partakes of the nature

of fraud.” “It must be noted that the burden of proving bad faith rests on the one alleging it” since basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same. “Allegations of bad faith and fraud must be proved by clear and convincing evidence.” The records of this case are bereft of any clear and convincing evidence showing that the respondents acted in bad faith or in a wanton or fraudulent manner in dismissing the petitioner. That the petitioner was illegally dismissed is insufficient to prove bad faith. A dismissal may be contrary to law but by itself alone, it does not establish bad faith to entitle the dismissed employee to moral damages. The award of moral and exemplary damages cannot be justified solely upon the premise that the employer dismissed his employee without cause.

Same; Same; Attorney’s Fees; The petitioner is entitled to attorney’s fees in the amount of ten percent (10%) of the total monetary award pursuant to Article 111 of the Labor Code.— The petitioner is entitled to attorney’s fees in the amount of ten percent (10%) of the total monetary award pursuant to Article 111 of the Labor Code. “It is settled that where an employee was forced to litigate and, thus, incur expenses to protect his rights and interest, the award of attorney’s fees is legally and morally justifiable.”

Altercation Between employees

A. G.R. No. 157633 September 10, 2014 NORTHWEST AIRLINES, ROSARIO,

INC.,

vs.

MA.

CONCEPCION

M.

DEL

Labor Law; Termination of Employment; Serious Misconduct; Misconduct or improper behavior, to be a just cause for termination of employment, must: (a) be serious; (b) relate to the performance of the employee’s duties; and (c) show that the employee has become unfit to continue working for the employer.—Northwest argues that Del Rosario was dismissed on the grounds of serious misconduct and willful disobedience. Misconduct refers to the improper or wrong conduct that transgresses 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. But misconduct or improper behavior, to be a just cause for termination of employment, must: (a) be serious; (b) relate to the performance of the employee’s duties; and (c) show that the employee has become unfit to continue working for the employer.

Same; Same; Fighting in the Workplace; In People v. Asto, 277 SCRA 697 (1997), the Supreme Court (SC) characterized fight as not just a merely verbal tussle but a physical combat between two opposing parties.—In several rulings where the meaning of fight was decisive, the Court has observed that the term fight was considered to be different from the term argument. In People v. Asto, 277 SCRA 697 (1997), for instance, the Court characterized fight as not just a merely verbal tussle but a physical combat between two opposing parties, to wit: Well into their second bottle of gin, at about eleven o’clock that morning, Fernando Aquino and Peregrino had a verbal tussle. Fernando Aquino declared that he was going to run for councilor of Alcala, Pangasinan. Peregrino countered by saying: “If you will run for that post, cousin, I will fight you.” After a brief exchange of words, Fernando Aquino, laughing, went to sit beside Abagat. As Aquino continued with his mirth, Abagat stared at Peregrino with contempt. x x x. A few minutes later, he heard a commotion in the plantation some two hundred meters away. He claims to have seen several people fighting each other with pieces of wood but did not go to the field to check what was happening. (Italics supplied) Similarly, in Pilares, Sr. v. People, 518 SCRA 143 (2007), fight was held to be more than just an exchange of words that usually succeeded the provocation by either party, thus: When the petitioner was about to hand over the bottles of beer to the private complainant, the latter called him “coward” and dared him to get out for a fight. Insulted, the petitioner went out of his store and chased the private complainant. (Italics supplied) Based on the foregoing, the incident involving Del Rosario and Gamboa could not be justly considered as akin to the fight contemplated by Northwest. In the eyes of the NLRC, Del Rosario and Gamboa were arguing but not fighting. The understanding of fight as one that required physical combat was absent during the incident of May 18, 1998. Moreover, the claim of Morales that Del Rosario challenged Gamboa to a brawl (sabunutan) could not be given credence by virtue of its being self-serving in favor of Northwest, and of its being an apparent afterthought on the part of Morales during the investigation of the incident, without Del Rosario having the opportunity to contest Morales’ statement. In that context, the investigation then served only as Northwest’s means to establish that the grounds of a valid dismissal based on serious misconduct really existed.

Same; Same; Same; Even assuming arguendo that the incident was the kind of fight prohibited by Northwest’s Rules of Conduct, the same could not be considered as of such seriousness as to warrant Del Rosario’s dismissal from the service.—Even assuming arguendo that the incident was the kind of fight prohibited by Northwest’s Rules of Conduct, the same could not be considered as of such seriousness as to warrant Del Rosario’s dismissal from the service. The gravity of the fight, which was not more than a verbal argument between them, was not enough to tarnish or diminish Northwest’s public image.

Actual Work Detemines Position of Trust and Confidence

A. G.R. No. 192582 April 7, 2014 BLUER THAN BLUE JOINT VENTURES COMPANY/MARY ANN DELA VEGA, vs. GLYZA ESTEBAN

Labor Law; Termination of Employment; Loss of Trust and Confidence; Loss of trust and confidence is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence.—Loss of trust and confidence is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. The employee must be invested with confidence on delicate matters, such as the custody, handling, care and protection of the employer’s property and funds. “[W]ith respect to rank-and-file personnel, loss of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient.”

Same; Same; Same; Loss of trust and confidence to be a valid cause for dismissal must be work related such as would show the employee concerned to be unfit to continue working for the employer and it must be based on a wilful breach of trust and founded on clearly established facts.—Loss of trust and confidence to be a valid cause for dismissal must be work related such as would show the employee concerned to be unfit to continue working for the employer and it must be based on a wilful breach of trust and founded

on clearly established facts. Such breach is wilful if it is done intentionally, knowingly, and purposely, without justifiable excuse as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. The loss of trust and confidence must spring from the voluntary or wilful act of the employee, or by reason of some blameworthy act or omission on the part of the employee. Same; Same; Preventive Suspension; Penalties; Words and Phrases; Preventive suspension is a measure allowed by law and afforded to the employer if an employee’s continued employment poses a serious and imminent threat to the employer’s life or property or of his co-workers.—Preventive suspension is a measure allowed by law and afforded to the employer if an employee’s continued employment poses a serious and imminent threat to the employer’s life or property or of his co-workers. It may be legally imposed against an employee whose alleged violation is the subject of an investigation. In this case, the petitioner was acting well within its rights when it imposed a 10day preventive suspension on Esteban. While it may be that the acts complained of were committed by Esteban almost a year before the investigation was conducted, still, it should be pointed out that Esteban was performing functions that involve handling of the petitioner’s property and funds, and the petitioner had every right to protect its assets and operations pending Esteban’s investigation. Same; Non-Diminution of Benefits; Article 113 of the Labor Code provides that no employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except in cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment, among others.—Article 113 of the Labor Code provides that no employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except in cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment, among others. The Omnibus Rules Implementing the Labor Code, meanwhile, provides: SECTION 14. Deduction for loss or damage.—Where the employer is engaged in a trade, occupation or business where the practice of making deductions or requiring deposits is recognized to answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the employee, the employer may make wage deductions or require the employees to make deposits from which deductions shall be

made, subject to the following conditions: (a) That the employee concerned is clearly shown to be responsible for the loss or damage; (b) That the employee is given reasonable opportunity to show cause why deduction should not be made; (c) That the amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and (d) That the deduction from the wages of the employee does not exceed 20 percent of the employee’s wages in a week.

XII Authorize Causes

DISMISSAL DUE TO REDUNDANCY A. G.R. No. 181719

April 21, 2014 EUGENE S. ARABIT ET AL vs. JARDINE PACIFIC FINANCE, INC.

B. G.R. No. 191154

April 7, 2014 SPI TECHNOLOGIES INC. vs. MAPUA Labor Law; Termination of Employment; Redundancy; Requisites for a Valid Implementation of a Redundancy Program.—For a valid implementation of a redundancy program, the employer must comply with the following requisites: (1) written notice served on both the employee and the DOLE at least one month prior to the intended date of termination; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant position; and (4)

fair and reasonable criteria in ascertaining what positions are to be declared redundant.

Same; Same; Same; In cases of redundancy, the management should adduce evidence and prove that a position which was created in place of a previous one should pertain to functions which are dissimilar and incongruous to the abolished office.—“It is not the job title but the actual work that the employee performs.” Also, change in the job title is not synonymous to a change in the functions. A position cannot be abolished by a mere change of job title. In cases of redundancy, the management should adduce evidence and prove that a position which was created in place of a previous one should pertain to functions which are dissimilar and incongruous to the abolished office.

Same; Same; Same; Illegal Dismissals; Liability of Corporate Officers; Conditions in Order for Personal Liability of Corporate Officers to Attach for the Corporate Acts.—On the issue of the solidary obligation of the corporate officers impleaded vis-à-vis the corporation for Mapua’s illegal dismissal, “[i]t is hornbook principle that personal liability of corporate directors, trustees or officers attaches only when: (a) they assent to a patently unlawful act of the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or when there is a conflict of interest resulting in damages to the corporation, its stockholders or other persons; (b) they consent to the issuance of watered down stocks or when, having knowledge of such issuance, do not forthwith file with the corporate secretary their written objection; (c) they agree to hold themselves personally and solidarily liable with the corporation; or (d) they are made by specific provision of law personally answerable for their corporate action.”

Same; Same; Same; Same; Moral Damages; Exemplary Damages; Award of moral and exemplary damages for an illegally dismissed employee is proper where the employee had been harassed and arbitrarily terminated by the employer.—Award of moral and exemplary damages for an illegally dismissed employee is proper where the employee had been harassed and arbitrarily terminated by the employer. Moral damages may be awarded to compensate one for diverse injuries such as mental anguish, besmirched reputation,

wounded feelings, and social humiliation occasioned by the employer’s unreasonable dismissal of the employee. The Court has consistently accorded the working class a right to recover damages for unjust dismissals tainted with bad faith; where the motive of the employer in dismissing the employee is far from noble. The award of such damages is based not on the Labor Code but on Article 220 of the Civil Code. However, the Court observes that the CA decision affirming the LA’s award of P500,000.00 and P250,000.00 as moral and exemplary damages, respectively, is evidently excessive because the purpose for awarding damages is not to enrich the illegally dismissed employee. Consequently, the Court hereby reduces the amount of P50,000.00 each as moral and exemplary damages. SPI Technologies, Inc. vs. Mapua, 720 SCRA 743, G.R. No. 191154 April 7, 2014

“FLAOTING STATUS”

A. G.R. No. 204761 April 2, 2014 EMERITUS SECURITY AND MAINTENANCE SYSTEMS, INC, vs. JANRIE C. DAILIG, Labor Law; Security Guards; Floating Status; Constructive Dismissals; The Supreme Court agrees with the ruling of the Labor Arbiter, National Labor Relations Commission (NLRC) and Court of Appeals (CA) that a floating status of a security guard, such as respondent, for more than six months constitutes constructive dismissal.—The Court agrees with the ruling of the Labor Arbiter, NLRC and Court of Appeals that a floating status of a security guard, such as respondent, for more than six months constitutes constructive dismissal. In Nationwide Security and Allied Services, Inc. v. Valderama, 644 SCRA 299 (2011), the Court held: x x x the temporary inactivity or “floating status” of security guards should continue only for six months. Otherwise, the security agency concerned could be liable for constructive dismissal. The failure of petitioner to give respondent a work assignment beyond the reasonable six-month period makes it liable for constructive dismissal.

Remedial Law; Appeals; Substantial Evidence; Factual findings of quasijudicial bodies like the National Labor Relations Commission (NLRC), if supported by substantial evidence, are accorded respect and even finality by this Court, more so when they coincide with those of the Labor Arbiter.—The Court notes that the Labor Arbiter, NLRC, and Court of Appeals unanimously found that respondent was illegally dismissed by petitioner. Factual findings of quasi-judicial bodies like the NLRC, if supported by substantial evidence, are accorded respect and even finality by this Court, more so when they coincide with those of the Labor Arbiter. Such factual findings are given more weight when the same are affirmed by the Court of Appeals. The Court finds no reason to depart from the foregoing rule.

Same; Reinstatement; Separation Pay; Reinstatement is the general rule, while the award of separation pay is the exception. Article 279 of the Labor Code of the Philippines mandates the reinstatement of an illegally dismissed employee, to wit: Security of Tenure.—x x x An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Thus, reinstatement is the general rule, while the award of separation pay is the exception. The circumstances warranting the grant of separation pay, in lieu of reinstatement, are laid down by the Court in Globe-Mackay Cable and Radio Corporation v. National Labor Relations Commission, 206 SCRA 701 (1992), thus: Over time, the following reasons have been advanced by the Court for denying reinstatement under the facts of the case and the law applicable thereto; that reinstatement can no longer be effected in view of the long passage of time (22 years of litigation) or because of the realities of the situation; or that it would be ‘inimical to the employer’s interest’; or that reinstatement may no longer be feasible; or, that it will not serve the best interests of the parties involved; or that the company would be prejudiced by the workers’ continued employment; or that it will not serve any prudent purpose as when supervening facts have transpired which make execution on that score unjust or inequitable or, to an increasing extent, due to the resultant atmosphere of ‘antipathy and antagonism’ or ‘strained relations’ or ‘irretrievable estrangement’ between the employer and the employee. Emeritus Security
and Maintenance Systems, Inc. vs. Dailig, 720 SCRA 572, G.R. No. 204761 April 2, 2014

B. G.R. No. 198538. September 29, 2014.* EXOCET SECURITY AND ALLIED SERVICES CORPORATION and/or MA. TERESA MARCELO, vs. ARMANDO D. SERRANO Labor Law; Security Guards; Floating Status or Off-Detail; While there is no specific provision in the Labor Code which governs the “floating status” or temporary “off-detail” of security guards employed by private security agencies, this situation was considered by the Supreme Court (SC) in several cases as a form of temporary retrenchment or layoff.—While there is no specific provision in the Labor Code which governs the “floating status” or temporary “off-detail” of security guards employed by private security agencies, this situation was considered by this Court in several cases as a form of temporary retrenchment or layoff. The concept has been defined as that period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one. As pointed out by the CA, it takes place when the security agency’s clients decide not to renew their contracts with the agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it, even for want of cause, such that the replaced security guard may be placed on temporary “off-detail” if there are no available posts under the agency’s existing contracts.

Same; Same; Same; As the circumstance is generally outside the control of the security agency or the employer, the Supreme Court (SC) has ruled that when a security guard is placed on a “floating status,” he or she does not receive any salary or financial benefit provided by law.—As the circumstance is generally outside the control of the security agency or the employer, the Court has ruled that when a security guard is placed on a “floating status,” he or she does not receive any salary or financial benefit provided by law. Pido v. National Labor Relations Commission, 516 SCRA 609 (2007), explains why: Verily, a floating status requires the dire exigency of the employer’s bona fide suspension of operation of a business or undertaking. In security services, this happens when the security agency’s clients which do not renew their contracts are more than those that do and the new ones that the agency gets. Also, in instances when contracts for security services stipulate that the client may request the agency for the replacement of the guards

assigned to it even for want of cause, the replaced security guard may be placed on temporary “off-detail” if there are no available posts under respondent’s existing contracts. When a security guard is placed on a “floating status,” he does not receive any salary or financial benefit provided by law. Due to the grim economic consequences to the employee, the employer should bear the burden of proving that there are no posts available to which the employee temporarily out of work can be assigned. Same; Same; Same; Although placing a security guard on “floating status” or a temporary “off-detail” is considered a temporary retrenchment measure, there is similarly no provision in the Labor Code which treats of a temporary retrenchment or layoff.—It must be emphasized, however, that although placing a security guard on “floating status” or a temporary “off-detail” is considered a temporary retrenchment measure, there is similarly no provision in the Labor Code which treats of a temporary retrenchment or layoff. Neither is there any provision which provides for its requisites or its duration. Nevertheless, since an employee cannot be laid off indefinitely, the Court has applied Article 292 (previously Article 286) of the Labor Code by analogy to set the specific period of temporary layoff to a maximum of six (6) months.

Same; Same; Same; The Supreme Court (SC) has held, citing Sebuguero v. NLRC, 248 SCRA 532 (1995), that the placement of the employee on a floating status should not last for more than six (6) months. After six months, the employee should be recalled for work, or for a new assignment; otherwise, he is deemed terminated.—This Court has held, citing Sebuguero v. NLRC, 248 SCRA 532 (1995), that the placement of the employee on a floating status should not last for more than six months. After six months, the employee should be recalled for work, or for a new assignment; otherwise, he is deemed terminated. There is no specific provision of law which treats of a temporary retrenchment or layoff and provides for the requisites in effecting it or a period or duration therefor. These employees cannot forever be temporarily laid off. To remedy this situation or fill the hiatus, Article 286 [now 292] may be applied but only by analogy to set a specific period that employees may remain temporarily laid off or in floating status. Six months is the period set by law that the operation of a business or undertaking may be suspended thereby suspending the employment of the employees concerned. The temporary layoff wherein the employees likewise cease to work should also not last longer than six months. After six months, the employees should either be recalled to work or permanently retrenched following the requirements of

the law, and that failing to comply with this would be tantamount to dismissing the employees and the employer would thus be liable for such dismissal. Same; Termination of Employment; The lack of service assignment for a continuous period of six (6) months is an authorized cause for the termination of the employee, who is then entitled to a separation pay equivalent to half-month pay for every year of service.—The Department of Labor and Employment (DOLE) issued Department Order No. 14, Series of 2001 (DO 14-01), entitled “Guidelines Governing the Employment and Working Conditions of Security Guards and Similar Personnel in the Private Security Industry,” Section 6.5, in relation to Sec. 9.3, of which states that the lack of service assignment for a continuous period of six (6) months is an authorized cause for the termination of the employee, who is then entitled to a separation pay equivalent to halfmonth pay for every year of service. Same; Same; Security Guards; Floating Status or Off-Detail; To validly terminate a security guard for lack of service assignment for a continuous period of six (6) months under Secs. 6.5 and 9.3 of Department Order (DO) 14-01, the security agency must comply with the provisions of Article 289 (previously Art. 283) of the Labor Code, which mandates that a written notice should be served on the employee on temporary off-detail or floating status and to the Department of Labor and Employment (DOLE) one (1) month before the intended date of termination.—To validly terminate a security guard for lack of service assignment for a continuous period of six months under Secs. 6.5 and 9.3 of DO 14-01, the security agency must comply with the provisions of Article 289 (previously Art. 283) of the Labor Code, which mandates that a written notice should be served on the employee on temporary off-detail or floating status and to the DOLE one (1) month before the intended date of termination. Same; Same; Same; Burden of Proof; The Supreme Court (SC) has declared that the burden of proving that there are no posts available to which the security guard may be assigned rests on the employer.— In every case, the Court has declared that the burden of proving that there are no posts available to which the security guard may be assigned rests on the employer. We ruled in Nationwide Security and Allied Services, Inc. v. Valderama, 644 SCRA 299 (2011): In cases involving security guards, a relief and transfer order in itself does not sever employment relationship between a security guard and his agency. An employee has the right to

security of tenure, but this does not give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where his service, as security guard, will be most beneficial to the client. Temporary “off-detail” or the period of time security guards are made to wait until they are transferred or assigned to a new post or client does not constitute constructive dismissal, so long as such status does not continue beyond six months. The onus of proving that there is no post available to which the security guard can be assigned rests on the employer x x x. Same; Security Guards; While the Supreme Court (SC) has recognized the security guards’ right to security of tenure under the “floating status” rule, the Court has similarly acknowledged the management prerogative of security agencies to transfer security guards when necessary in conducting its business, provided it is done in good faith.—It cannot, therefore, be gainsaid that the right of security guards to security of tenure is safeguarded by administrative issuances and jurisprudence, in parallel with the mandate of the Labor Code and the Constitution to protect labor and the working people. Nonetheless, while the Court has recognized the security guards’ right to security of tenure under the “floating status” rule, the Court has similarly acknowledged the management prerogative of security agencies to transfer security guards when necessary in conducting its business, provided it is done in good faith. Same; Same; Security of Tenure; The security guard’s right to security of tenure does not give him a vested right to the position as would deprive the company of its prerogative to change the assignment of, or transfer the security guard to, a station where his services would be most beneficial to the client.—The security guard’s right to security of tenure does not give him a vested right to the position as would deprive the company of its prerogative to change the assignment of, or transfer the security guard to, a station where his services would be most beneficial to the client. Indeed, an employer has the right to transfer or assign its employees from one office or area of operation to another, or in pursuit of its legitimate business interest, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the transfer is not motivated by discrimination or bad faith, or effected as a form of punishment or demotion without sufficient cause. Same; Same; Since respondent Serrano was not actually or constructively dismissed from his employment by petitioner Exocet,

it is best that petitioner Exocet direct him to report for work, if any security assignment is still available to him. If respondent Serrano still refuses to be assigned to any available guard position, he shall be deemed to have abandoned his employment with petitioner.—In this factual milieu, since respondent Serrano was not actually or constructively dismissed from his employment by petitioner Exocet, it is best that petitioner Exocet direct him to report for work, if any security assignment is still available to him. If respondent Serrano still refuses to be assigned to any available guard position, he shall be deemed to have abandoned his employment with petitioner. If no security assignment is available for respondent, petitioner Exocet should comply with the requirements of DO 14-01, in relation to Art. 289 of the Labor Code, and serve a written notice on Serrano and the DOLE one (1) month before the intended date of termination, and pay Serrano separation pay equivalent to half month pay for every year of his actual service. Exocet Security and Allied Services Corporation vs. Serrano, 737 SCRA 40, G.R. No. 198538 September 29, 2014

PROCEDURAL DUE PROCESS IN DISMISSAL DUE TO DESEASE A. G.R. No. 202996 June 18, 2014 MARLO A. DEOFERIO, , vs. INTEL TECHNOLOGY PHILIPPINES, INC. and/or MIKE WENTLING, Labor Law; Termination of Employment; Burden of Proof; In termination cases, the law places the burden of proof upon the employer to show by substantial evidence that the termination was for a lawful cause and in the manner required by law.— Concomitant to the employer’s right to freely select and engage an employee is the employer’s right to discharge the employee for just and/or authorized causes. To validly effect terminations of employment, the discharge must be for a valid cause in the manner required by law. The purpose of these two-pronged qualifications is to protect the working class from the employer’s arbitrary and unreasonable exercise of its right to dismiss. Thus, in termination cases, the law places the burden of proof upon the employer to show by substantial evidence that the termination was for a lawful cause and in the manner required by law. Same; Same; Disease; The Supreme Court (SC) liberally construed the phrase “prejudicial to his health as well as to the health of his

co- employees” to mean “prejudicial to his health or to the health of his co-employees.”—The present case involves termination due to disease —The present case involves termination due to disease — an authorized cause for dismissal under Article 284 of the Labor Code. As substantive requirements, the Labor Code and its IRR require the presence of the following elements: (1) An employer has been found to be suffering from any disease. (2) His continued employment is prohibited by law or prejudicial to his health, as well as to the health of his co-employees. (3) A competent public health authority certifies that the disease is of such nature or at such a stage that it cannot be cured within a period of six months even with proper medical treatment. With respect to the first and second elements, the Court liberally construed the phrase “prejudicial to his health as well as to the health of his co-employees” to mean “prejudicial to his health or to the health of his co-employees.” We did not limit the scope of this phrase to contagious diseases for the reason that this phrase is preceded by the phrase “any disease” under Article 284 of the Labor Code, to wit: Art. 284. Disease as ground for termination.—An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to onehalf (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year. Same; Same; Same; Procedural Due Process; The Labor Code and its Implementing Rules and Regulations (IRR) are silent on the procedural due process required in terminations due to disease. Despite the seeming gap in the law, Section 2, Rule 1, Book VI of the IRR expressly states that the employee should be afforded procedural due process in all cases of dismissals.—The Labor Code and its IRR are silent on the procedural due process required in terminations due to disease. Despite the seeming gap in the law, Section 2, Rule 1, Book VI of the IRR expressly states that the employee should be afforded procedural due process in all cases of dismissals. In Sy v. Court of Appeals, 398 SCRA 301, and Manly Express, Inc. v. Payong, Jr., 474 SCRA 323, promulgated in 2003 and 2005, respectively, the Court finally pronounced the rule that the employer must furnish the employee two written notices in terminations due to disease, namely: (1) the notice to apprise the employee of the ground

for which his dismissal is sought; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. These rulings reinforce the State policy of protecting the workers from being terminated without cause and without affording them the opportunity to explain their side of the controversy. Same; Same; Same; Same; Nominal Damages; Intel’s violation of Deoferio’s right to statutory procedural due process warrants the payment of indemnity in the form of nominal damages; Dismissals for just cause imply that the employee has committed a violation against the employer, while terminations under Article 283 of the Labor Code are initiated by the employer in the exercise of his management prerogative.—Intel’s violation of Deoferio’s right to statutory procedural due process warrants the payment of indemnity in the form of nominal damages. In Jaka Food Processing Corp. v. Pacot, 454 SCRA 119 (2005), we distinguished between terminations based on Article 282 of the Labor Code and dismissals under Article 283 of the Labor Code. We then pegged the nominal damages at P30,000.00 if the dismissal is based on a just cause but the employer failed to comply with the twin-notice requirement. On the other hand, we fixed the nominal damages at P50,000.00 if the dismissal is due to an authorized cause under Article 283 of the Labor Code but the employer failed to comply with the notice requirement. The reason is that dismissals for just cause imply that the employee has committed a violation against the employer, while terminations under Article 283 of the Labor Code are initiated by the employer in the exercise of his management prerogative. Same; Same; Same; Same; Same; Several Factors to be Taken Into Consideration in Fixing Nominal Damages.—In fixing the amount of nominal damages whose determination is addressed to our sound discretion, the Court should take into account several factors surrounding the case, such as: (1) the employer’s financial, medical, and/or moral assistance to the sick employee; (2) the flexibility and leeway that the employer allowed the sick employee in performing his duties while attending to his medical needs; (3) the employer’s grant of other termination benefits in favor of the employee; and (4) whether there was a bona fide attempt on the part of the employer to comply with the twin-notice requirement as opposed to giving no notice at all. Same; Civil Law; Compensation; Under Article 1278 of the Civil Code, in relation to Article 1706 of the Civil Code and Article

113(c) of the Labor Code, compensation shall take place when two persons are creditors and debtors of each other in their own right.—We award Deoferio the sum of P30,000.00 as nominal damages for violation of his statutory right to procedural due process. In so ruling, we take into account Intel’s faithful compliance with Article 284 of the Labor Code and Section 8, Rule 1, Book VI of the IRR. We also note that Deoferio’s separation pay equivalent to one-half month salary for every year of service was validly offset by his matured car loan. Under Article 1278 of the Civil Code, in relation to Article 1706 of the Civil Code and Article 113(c) of the Labor Code, compensation shall take place when two persons are creditors and debtors of each other in their own right. We likewise consider the fact that Intel exhibited real concern to Deoferio when it financed his medical expenses for more than four years. Furthermore, prior to his termination, Intel liberally allowed Deoferio to take lengthy leave of absences to allow him to attend to his medical needs. Same; Same; Damages; Nominal Damages; Liability of Corporate Officers; Wentling, as a corporate officer, cannot be held liable for acts done in his official capacity because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and members.—Intel shall be solely liable to Deoferio for the satisfaction of nominal damages. Wentling, as a corporate officer, cannot be held liable for acts done in his official capacity because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and members. There is also no ground for piercing the veil of corporate fiction because Wentling acted in good faith and merely relied on Dr. Lee’s psychiatric report in carrying out the dismissal. Same; Employer-Employee Relationships; Damages; Money Claims; Under Article 291 of the Labor Code, all money claims arising from employer-employee relations shall be filed within three years from the time the cause of action accrued.—Deoferio’s claim for salary differential is already barred by prescription. Under Article 291 of the Labor Code, all money claims arising from employeremployee relations shall be filed within three years from the time the cause of action accrued. In the current case, more than four years have elapsed from the pretermination of his assignment to the United States until the filing of his complaint against the respondents. We thus see no point in further discussing this matter. His claim for backwages, separation pay, moral and exemplary damages, as well as attorney’s

fees must also necessarily fail as a consequence of our finding that his dismissal was for an authorized cause and that the respondents acted in good faith when they terminated his services. Deoferio vs. Intel Technology Philippines, Inc., 726 SCRA 676, G.R. No. 202996 June 18, 2014 B. G.R. Nos. 204944-45. December 3, 2014. FUJI TELEVISION NETWORK, INC vs. ARLENE S. ESPIRITU Remedial Law; Civil Procedure; Verification; Certification Against Forum Shopping; Rule 7, Section 4 of the 1997 Rules of Civil Procedure provides the requirement of verification, while Section 5 of the same rule provides the requirement of certification against forum shopping.—Rule 7, Section 4 of the 1997 Rules of Civil Procedure provides the requirement of verification, while Section 5 of the same rule provides the requirement of certification against forum shopping. x x x Section 4(e) of Rule 45 requires that petitions for review should “contain a sworn certification against forum shopping as provided in the last paragraph of Section 2, Rule 42.” Section 5 of the same rule provides that failure to comply with any requirement in Section 4 is sufficient ground to dismiss the petition. Same; Same; Same; Same; Although the general rule is that failure to attach a verification and certification against forum shopping is a ground for dismissal, there are cases where this court allowed substantial compliance.—Although the general rule is that failure to attach a verification and certification against forum shopping is a ground for dismissal, there are cases where this court allowed substantial compliance. Same; Same; Same; Same; The physical act of signing the verification and certification against forum shopping can only be done by natural persons duly authorized either by the corporate bylaws or a board resolution.—Being a corporation, Fuji exercises its power to sue and be sued through its board of directors or duly authorized officers and agents. Thus, the physical act of signing the verification and certification against forum shopping can only be done by natural persons duly authorized either by the corporate bylaws or a board resolution. In its petition for review on certiorari, Fuji attached Hideaki Ota’s secretary’s certificate, authorizing Shuji Yano and Jin Eto to represent and sign for and on behalf of Fuji. The secretary’s certificate was duly authenticated by Sulpicio Confiado, Consul-

General of the Philippines in Japan. Likewise attached to the petition is the special power of attorney executed by Shuji Yano, authorizing Corazon to sign on his behalf. The verification and certification against forum shopping was signed by Corazon. Same; Same; Same; Same; The Supreme Court (SC) has recognized that there are instances when officials or employees of a corporation can sign the verification and certification against forum shopping without a board resolution.—This court has recognized that there are instances when officials or employees of a corporation can sign the verification and certification against forum shopping without a board resolution. In Cagayan Valley Drug Corporation v. CIR, 545 SCRA 10 (2008), it was held that: In sum, we have held that the following officials or employees of the company can sign the verification and certification without need of a board resolution: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the General Manager or Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case. While the above cases do not provide a complete listing of authorized signatories to the verification and certification required by the rules, the determination of the sufficiency of the authority was done on a case to case basis. The rationale applied in the foregoing cases is to justify the authority of corporate officers or representatives of the corporation to sign the verification or certificate against forum shopping, being ‘in a position to verify the truthfulness and correctness of the allegations in the petition.’ Corazon’s affidavit states that she is the “office manager and resident interpreter of the Manila Bureau of Fuji Television Network, Inc.” and that she has “held the position for the last twenty-three years.” As the office manager for 23 years, Corazon can be considered as having knowledge of all matters in Fuji’s Manila Bureau Office and is in a position to verify “the truthfulness and the correctness of the allegations in the Petition.” Thus, Fuji substantially complied with the requirements of verification and certification against forum shopping. Labor Law; Appeals; Article 223 of the Labor Code does not provide any mode of appeal for decisions of the National Labor Relations Commission (NLRC).—Article 223 of the Labor Code does not provide any mode of appeal for decisions of the National Labor Relations Commission. It merely states that “[t]he decision of the Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties.” Being final, it is no longer appealable. However,

the finality of the National Labor Relations Commission’s decisions does not mean that there is no more recourse for the parties. Same; Same; The Supreme Court (SC) clarified that judicial review of National Labor Relations Commission’s (NLRC’s) decisions shall be by way of a petition for certiorari under Rule 65. Citing the doctrine of hierarchy of courts, it further ruled that such petitions shall be filed before the Court of Appeals (CA). From the CA, an aggrieved party may file a petition for review on certiorari under Rule 45.—In St. Martin Funeral Home v. National Labor Relations Commission, 295 SCRA 494 (1998), this court cited several cases and rejected the notion that this court had no jurisdiction to review decisions of the National Labor Relations Commission. It stated that this court had the power to review the acts of the National Labor Relations Commission to see if it kept within its jurisdiction in deciding cases and also as a form of check and balance. This court then clarified that judicial review of National Labor Relations Commission’s decisions shall be by way of a petition for certiorari under Rule 65. Citing the doctrine of hierarchy of courts, it further ruled that such petitions shall be filed before the Court of Appeals. From the Court of Appeals, an aggrieved party may file a petition for review on certiorari under Rule 45. A petition for certiorari under Rule 65 is an original action where the issue is limited to grave abuse of discretion. As an original action, it cannot be considered as a continuation of the proceedings of the labor tribunals. On the other hand, a petition for review on certiorari under Rule 45 is a mode of appeal where the issue is limited to questions of law. In labor cases, a Rule 45 petition is limited to reviewing whether the Court of Appeals correctly determined the presence or absence of grave abuse of discretion and deciding other jurisdictional errors of the National Labor Relations Commission. Same; Employer-Employee Relationship; The Supreme Court (SC) has often used the four (4)-fold test to determine the existence of an employer-employee relationship.—This court has often used the four-fold test to determine the existence of an employer-employee relationship. Under the four-fold test, the “control test” is the most important. As to how the elements in the four-fold test are proven, this court has discussed that: [t]here is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment letters or

employment contracts, payrolls, organization charts, and personnel lists, serve as evidence of employee status. Same; Same; Independent Contractors; There is no employeremployee relationship between the contractor and principal who engages the contractor’s services, but there is an employeremployee relationship between the contractor and workers hired to accomplish the work for the principal.—In Department Order No. 18-A, Series of 2011, of the Department of Labor and Employment, a contractor is defined as having: Section 3. . . . . . . . (c) . . . an arrangement whereby a principal agrees to put out or farm out with a contractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. This department order also states that there is a trilateral relationship in legitimate job contracting and subcontracting arrangements among the principal, contractor, and employees of the contractor. There is no employer-employee relationship between the contractor and principal who engages the contractor’s services, but there is an employer-employee relationship between the contractor and workers hired to accomplish the work for the principal. Same; Same; Same; Since no employer-employee relationship exists between independent contractors and their principals, their contracts are governed by the Civil Code provisions on contracts and other applicable laws.—Since no employer-employee relationship exists between independent contractors and their principals, their contracts are governed by the Civil Code provisions on contracts and other applicable laws. A contract is defined as “a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.” Parties are free to stipulate on terms and conditions in contracts as long as these “are not contrary to law, morals, good customs, public order, or public policy.” This presupposes that the parties to a contract are on equal footing. They can bargain on terms and conditions until they are able to reach an agreement. Same; Same; Same; Employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an employer-employee relationship exists.—Fuji’s argument that Arlene was an independent contractor under a fixed-term contract is

contradictory. Employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an employeremployee relationship exists. The test in this kind of contract is not the necessity and desirability of the employee’s activities, “but the day certain agreed upon by the parties for the commencement and termination of the employment relationship.” For regular employees, the necessity and desirability of their work in the usual course of the employer’s business are the determining factors. On the other hand, independent contractors do not have employer-employee relationships with their principals. Same; Same; Same; Wages should not be the conclusive factor in determining whether one is an employee or an independent contractor.—The Court of Appeals did not err when it relied on the ruling in Dumpit-Murillo v. Court of Appeals, 524 SCRA 290 (2007), and affirmed the ruling of the National Labor Relations Commission finding that Arlene was a regular employee. Arlene was hired by Fuji as a news producer, but there was no showing that she was hired because of unique skills that would distinguish her from ordinary employees. Neither was there any showing that she had a celebrity status. Her monthly salary amounting to US$1,900.00 appears to be a substantial sum, especially if compared to her salary when she was still connected with GMA. Indeed, wages may indicate whether one is an independent contractor. Wages may also indicate that an employee is able to bargain with the employer for better pay. However, wages should not be the conclusive factor in determining whether one is an employee or an independent contractor. Same; Same; Regular Employees; The test for determining regular employment is whether there is a reasonable connection between the employee’s activities and the usual business of the employer.—The test for determining regular employment is whether there is a reasonable connection between the employee’s activities and the usual business of the employer. Article 280 provides that the nature of work must be “necessary or desirable in the usual business or trade of the employer” as the test for determining regular employment. As stated in ABS-CBN Broadcasting Corporation v. Nazareno, 503 SCRA 204 (2006): In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The standard, supplied by the law itself, is

whether the work undertaken is necessary or desirable in the usual business or trade of the employer, a fact that can be assessed by looking into the nature of the services rendered and its relation to the general scheme under which the business or trade is pursued in the usual course. It is distinguished from a specific undertaking that is divorced from the normal activities required in carrying on the particular business or trade. Same; Same; Same; An employee can be a regular employee with a fixed-term contract.—An employee can be a regular employee with a fixed-term contract. The law does not preclude the possibility that a regular employee may opt to have a fixed-term contract for valid reasons. This was recognized in Brent School, Inc. v. Zamora, 181 SCRA 702 (1990): For as long as it was the employee who requested, or bargained, that the contract have a “definite date of termination,” or that the fixed-term contract be freely entered into by the employer and the employee, then the validity of the fixed-term contract will be upheld. Same; Same; Probationary Employees; Security of Tenure; Even probationary employees are entitled to the right to security of tenure.—Even probationary employees are entitled to the right to security of tenure. This was explained in Philippine Daily Inquirer, Inc. v. Magtibay, Jr., 528 SCRA 355 (2007): Within the limited legal sixmonth probationary period, probationary employees are still entitled to security of tenure. It is expressly provided in the aforequoted Article 281 that a probationary employee may be terminated only on two grounds: (a) for just cause, or (b) when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. (Citation omitted) The expiration of Arlene’s contract does not negate the finding of illegal dismissal by Fuji. The manner by which Fuji informed Arlene that her contract would no longer be renewed is tantamount to constructive dismissal. To make matters worse, Arlene was asked to sign a letter of resignation prepared by Fuji. The existence of a fixedterm contract should not mean that there can be no illegal dismissal. Due process must still be observed in the pretermination of fixed-term contracts of employment. Same; Termination of Employment; Disease; Requirements for Termination of Employment on the Ground of Disease Under Article 284 of the Labor Code.—For dismissal under Article 284 to

be valid, two requirements must be complied with: (1) the employee’s disease cannot be cured within six (6) months and his “continued employment is prohibited by law or prejudicial to his health as well as to the health of his co-employees”; and (2) certification issued by a competent public health authority that even with proper medical treatment, the disease cannot be cured within six (6) months. The burden of proving compliance with these requisites is on the employer. Non-compliance leads to the conclusion that the dismissal was illegal. Same; Same; Illegal Dismissals; The law itself provides that illegally dismissed employees are entitled to reinstatement, backwages including allowances, and all other benefits.—The Court of Appeals’ modification of the National Labor Relations Commission’s decision was proper because the law itself provides that illegally dismissed employees are entitled to reinstatement, backwages including allowances, and all other benefits. On reinstatement, the National Labor Relations Commission ordered payment of separation pay in lieu of reinstatement, reasoning “that the filing of the instant suit may have seriously abraded the relationship of the parties so as to render reinstatement impractical.” The Court of Appeals reversed this and ordered reinstatement on the ground that separation pay in lieu of reinstatement is allowed only in several instances such as (1) when the employer has ceased operations; (2) when the employee’s position is no longer available; (3) strained relations; and (4) a substantial period has lapsed from date of filing to date of finality. Same; Quitclaims; Quitclaims in labor cases do not bar illegally dismissed employees from filing labor complaints and money claim.—Quitclaims in labor cases do not bar illegally dismissed employees from filing labor complaints and money claim. As explained by Arlene, she signed the nonrenewal agreement out of necessity. In Land and Housing Development Corporation v. Esquillo, 471 SCRA 488 (2005), this court explained: We have heretofore explained that the reason why quitclaims are commonly frowned upon as contrary to public policy, and why they are held to be ineffective to bar claims for the full measure of the workers’ legal rights, is the fact that the employer and the employee obviously do not stand on the same footing. The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of a job, he had to face the harsh necessities of life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice.

Same; Moral Damages; Exemplary Damages; Moral damages are awarded “when the dismissal is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy.” On the other hand, exemplary damages may be awarded when the dismissal was effected “in a wanton, oppressive or malevolent manner.”—With regard to the Court of Appeals’ award of moral and exemplary damages and attorney’s fees, this court has recognized in several cases that moral damages are awarded “when the dismissal is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy.” On the other hand, exemplary damages may be awarded when the dismissal was effected “in a wanton, oppressive or malevolent manner.” The Court of Appeals and National Labor Relations Commission found that after Arlene had informed Fuji of her cancer, she was informed that there would be problems in renewing her contract on account of her condition. This information caused Arlene mental anguish, serious anxiety, and wounded feelings that can be gleaned from the tenor of her email dated March 11, 2009. A portion of her email reads: I WAS SO SURPRISED . . . that at a time when I am at my lowest, being sick and very weak, you suddenly came to deliver to me the NEWS that you will no longer renew my contract. I knew this will come but I never thought that you will be so ‘heartless’ and insensitive to deliver that news just a month after I informed you that I am sick. I was asking for patience and understanding and your response was not to RENEW my contract. Apart from Arlene’s illegal dismissal, the manner of her dismissal was effected in an oppressive approach with her salary and other benefits being withheld until May 5, 2009, when she had no other choice but to sign the nonrenewal contract. Thus, there was legal basis for the Court of Appeals to modify the National Labor Relations Commission’s decision. Same; Attorney’s Fees; Article 111 of the Labor Code states that “[i]n cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent (10%) of the amount of wages recovered”; Where an employee was forced to litigate and, thus, incur expenses to protect his rights and interest, the award of attorney’s fees is legally and morally justifiable.—With regard to the award of attorney’s fees, Article 111 of the Labor Code states that “[i]n cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered.” Likewise, this court has

recognized that “in actions for recovery of wages or where an employee was forced to litigate and, thus, incur expenses to protect his rights and interest, the award of attorney’s fees is legally and morally justifiable.” Due to her illegal dismissal, Arlene was forced to litigate. Fuji Television Network, Inc. vs. Espiritu, 744 SCRA 31, G.R. Nos. 204944-45 December 3, 2014

FAILURE TO PROVIDE WORKABLE ENVIRONMENT AS QUASI-DELICT

A. G.R. No. 171212 August 4, 2014 INDOPHIL TEXTILE MILLS, INC., vs. ENGR. SALVADOR ADVIENTO,

XIII

CONSEQUENCES OF TERMINATION PREVENTIVE SUSPENSION AND SUSPENSION AS PENALTY A. G.R. No. 189947 January 25, 2012 MANILA PAVILION HOTEL, owned and operated by ACESITE (PHILS.) HOTEL CORPORATION, vs. HENRY DELADA Labor Law; Voluntary Arbitrators; Jurisdiction; The voluntary arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority—subject only, in a proper case, to the certiorari jurisdiction of this Court. In that case, the specific issue presented was “the issue of performance bonus.”—In Sime Darby Pilipinas, Inc. v. Deputy Administrator Magsalin, 180 SCRA 177 (1989), we ruled that the voluntary arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority—subject only, in a proper case, to the certiorari jurisdiction of this Court. In that case, the specific issue presented was “the issue

of performance bonus.” We then held that the arbitrator had the authority to determine not only the issue of whether or not a performance bonus was to be granted, but also the related question of the amount of bonus, were it to be granted. We then said that there was no indication at all that the parties to the arbitration agreement had regarded “the issue of performance bonus” as a two-tiered issue, only one aspect of which was being submitted to arbitration; thus, we held that the failure of the parties to specifically limit the issues to that which was stated allowed the arbitrator to assume jurisdiction over the related issue. Same; Same; Same; Even if the specific issue brought before the arbitrators merely mentioned the question of “whether an employee was discharged for just cause,” they could reasonably assume that their powers extended beyond the determination thereof to include the power to reinstate the employee or to grant back wages.—A more recent case is Ludo & Luym Corporation v. Saornido, 395 SCRA 451 (2003). In that case, we recognized that voluntary arbitrators are generally expected to decide only those questions expressly delineated by the submission agreement; that, nevertheless, they can assume that they have the necessary power to make a final settlement on the related issues, since arbitration is the final resort for the adjudication of disputes. Thus, we ruled that even if the specific issue brought before the arbitrators merely mentioned the question of “whether an employee was discharged for just cause,” they could reasonably assume that their powers extended beyond the determination thereof to include the power to reinstate the employee or to grant back wages. In the same vein, if the specific issue brought before the arbitrators referred to the date of regularization of the employee, law and jurisprudence gave them enough leeway as well as adequate prerogative to determine the entitlement of the employees to higher benefits in accordance with the finding of regularization. Indeed, to require the parties to file another action for payment of those benefits would certainly undermine labor proceedings and contravene the constitutional mandate providing full protection to labor and speedy labor justice. Same; Termination of Employment; Willful Disobedience; The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer.—In Allied Banking Corporation vs. Court of Appeals, 416 SCRA 65 (2003), employer Allied Bank reassigned respondent Galanida from its Cebu City branch to its

Bacolod and Tagbilaran branches. He refused to follow the transfer order and instead filed a Complaint before the Labor Arbiter for constructive dismissal. While the case was pending, Allied Bank insisted that he report to his new assignment. When he continued to refuse, it directed him to explain in writing why no disciplinary action should be meted out to him. Due to his continued refusal to report to his new assignment, Allied Bank eventually terminated his services. When the issue of whether he could validly refuse to obey the transfer orders was brought before this Court, we ruled thus: The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer. Employees may object to, negotiate and seek redress against employers for rules or orders that they regard as unjust or illegal. However, until and unless these rules or orders are declared illegal or improper by competent authority, the employees ignore or disobey them at their peril. For Galanida’s continued refusal to obey Allied Bank’s transfer orders, we hold that the bank dismissed Galanida for just cause in accordance with Article 282(a) of the Labor Code. Galanida is thus not entitled to reinstatement or to separation pay. Manila Pavilion Hotel vs. Delada, 664 SCRA 334, G.R. No. 189947 January 25, 2012

B. G.R. No. 175932 February 15, 2012 WUERTH vs. RODANTE YNSON

PHILIPPINES,

INC.,

C. G.R. Nos. 142732-33 December 4, 2007 MARILOU S. GENUINO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA, respondents. G.R. Nos. 142753-54 December 4, 2007

CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and MARILOU GENUINO, respondents Genuino vs. National Labor Relations Commission, 539 SCRA 342, G.R. Nos. 142732-33, G.R. Nos. 142753-54 December 4, 2007

Labor Law; Dismissals; Termination of Employees; Due Process; Twin Notice Requirement.—In a string of cases, we have repeatedly said that the requirement of twin notices must be met. In the recent case of King of Kings Transport, Inc. v. Mamac, 526 SCRA 116 (2007), we explained: To clarify, the following should be considered in terminating the services of employees: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees. (2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. (3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment.

Same; Same; Same; Same; Where the notice of charges given to an employee is inadequate, the charges being too general to enable the employee to intelligently and adequately prepare her defense, the dismissal could not be in accordance with due process.—While the bank gave Genuino an opportunity to deny the truth of the allegations in writing and participate in the administrative investigation, the fact remains that the charges were too general to enable Genuino to intelligently and adequately prepare her defense. The two-notice requirement of the Labor Code is an essential part of due process. The first notice informing the employee of the charges should neither be pro forma nor vague. It should set out clearly what the employee is being held liable for. The employee should be afforded ample opportunity to be heard and not mere opportunity. As explained in King of Kings Transport, Inc., ample opportunity to be heard is especially accorded the employees sought to be dismissed after they are specifically informed of the charges in order to give them an opportunity to refute such accusations leveled against them. Since the notice of charges given to Genuino is inadequate, the dismissal could not be in accordance with due process. Same; Same; Loss of Confidence; In order to constitute as just cause for dismissal, loss of confidence should relate to acts inimical to the interests of the employer; For loss of trust and confidence to be a valid ground for an employee’s dismissal, it must be substantial and not arbitrary, and must be founded on clearly established facts sufficient to warrant the employee’s separation from work.—Art. 282(c) of the Labor Code provides that an employer may terminate an employment for fraud or willful breach by the employee of the trust reposed in him/her by his/her employer or duly authorized representative. In order to constitute as just cause for dismissal, loss of confidence should relate to acts inimical to the interests of the employer. Also, the act complained of should have arisen from the performance of the employee’s duties. For loss of trust and confidence to be a valid ground for an employee’s dismissal, it must be substantial and not arbitrary, and must be founded on clearly established facts sufficient to warrant the employee’s separation from work. We also held that: [L]oss of confidence is a valid ground for dismissing an employee and proof beyond reasonable doubt of the employee’s misconduct is not required. It is sufficient if there is some basis for such loss of confidence or if the employer has reasonable ground to believe or to entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him unworthy of the trust and confidence demanded by his position.

Same; Same; Due Process; Agabon Doctrine; The violation of an employee’s right to statutory due process by the employer warrants the payment of indemnity in the form of nominal damages, the amount of which is addressed to the sound discretion of the court, taking into account the relevant circumstances.—In view of Citibank’s failure to observe due process, however, nominal damages are in order but the amount is hereby raised to PhP 30,000 pursuant to Agabon v. NLRC, 442 SCRA 573 (2004). The NLRC’s order for payroll reinstatement is set aside. In Agabon, we explained: The violation of the petitioners’ right to statutory due process by the private respondent warrants the amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules. Same; Same; Payroll Reinstatement; Where the decision of the labor arbiter is for the reinstatement of the employee, the employee shall either be admitted back to work or, at the option of the employer, merely reinstated in the payroll, and if the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee may be entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices.— Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal pursuant to Art. 223, paragraph 3 of the Labor Code, which states: In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer

under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund

D. G.R. No. 164856. January 20, 2009.* JUANITO A. GARCIA and ALBERTO J. DUMAGO, vs. PHILIPPINE AIRLINES, INC.

Labor Law; Wages; A dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory— unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith.—A dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith.

Same; Reinstatement; It settles the view that the Labor Arbiter’s order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee’s salaries.—The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. It settles the view that the Labor Arbiter’s order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to

reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee’s salaries.

Same; Same; While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive.—While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive.

Same; Writ of Execution; The new National Labor Relations Commission (NLRC) Rules of Procedure, which took effect on January 7, 2006, now require the employer to submit a report of compliance within ten (10) calendar days from receipt of the Labor Arbiter’s decision, disobedience to which clearly denotes a refusal to reinstate—the employee need not file a motion for the issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue the writ, and, with the new rules in place, there is hardly any difficulty in determining the employer’s intransigence in immediately complying with the order.—The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require the employer to submit a report of compliance within 10 calendar days from receipt of the Labor Arbiter’s decision, disobedience to which clearly denotes a refusal to reinstate. The employee need not file a motion for the issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue the writ. With the new rules in place, there is hardly any difficulty in determining the employer’s intransigence in immediately complying with the order. Same; Corporate Rehabilitation; Had there been no need to rehabilitate, respondent may have opted for actual physical reinstatement pending appeal to optimize the utilization of resources—then again, though the management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the subsistence of the injunction on claims.—There are legal effects arising from a judicial order placing a corporation under rehabilitation. Respondent was, during the period material to the case, effectively deprived of the alternative choices under Article 223 of the Labor Code, not only by virtue of the statutory

injunction but also in view of the interim relinquishment of management control to give way to the full exercise of the powers of the rehabilitation receiver. Had there been no need to rehabilitate, respondent may have opted for actual physical reinstatement pending appeal to optimize the utilization of resources. Then again, though the management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the subsistence of the injunction on claims. Garcia vs. Philippine Airlines, Inc., 576 SCRA 479, G.R. No. 164856 January 20, 2009

E. G.R. No. 158693 November 17, 2004

JENNY M. AGABON and VIRGILIO C. AGABON, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS, INC. and VICENTE ANGELES Labor Law; Administrative Law; If the factual findings of the NLRC and the Labor Arbiter are conflicting, the reviewing court may delve into the records and examine for itself the questioned findings.—It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are accorded not only respect but even finality if the findings are supported by substantial evidence. This is especially so when such findings were affirmed by the Court of Appeals. However, if the factual findings of the NLRC and the Labor Arbiter are conflicting, as in this case, the reviewing court may delve into the records and examine for itself the questioned findings. Accordingly, the Court of Appeals, after a careful review of the facts, ruled that petitioners’ dismissal was for a just cause. They had abandoned their employment and were already working for another employer.

Same; Dismissal of Employees; To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself.—To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself. Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or

willful disobedience by the employee of the lawful orders of his employer or the latter’s representative in connection with the employee’s work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing.

Same; Same; Abandonment; Words and Phrases; Abandonment is the deliberate and unjustified refusal of an employee to resume his employment—it is a form of neglect of duty, hence, a just cause for termination of employment by the employer.—Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified.

Same; Same; Same; Moonlighting; Subcontracting for another company clearly shows the intention to sever the employeremployee relationship; The record of an employee is a relevant consideration in determining the penalty that should be meted out to him.—In February 1999, petitioners were frequently absent having subcontracted for an installation work for another company. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private respondent. This was not the first time they did this. In January 1996, they did not report for work because they were working for another company. Private respondent at that time warned petitioners that they would be dismissed if this happened again. Petitioners disregarded the warning and exhibited a clear intention to sever their employer-employee relationship. The record of an employee is a relevant consideration in determining the penalty that should be meted out to him. Same; Same; The employer may not be compelled to continue to employ such persons whose continuance in the service will

patently be inimical to his interests.—The law imposes many obligations on the employer such as providing just compensation to workers, observance of the procedural requirements of notice and hearing in the termination of employment. On the other hand, the law also recognizes the right of the employer to expect from its workers not only good performance, adequate work and diligence, but also good conduct and loyalty. The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to his interests. Same; Same; Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees.—Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. A termination for an authorized cause requires payment of separation pay. When the termination of employment is declared illegal, reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted. Same; Same; Due Process; Notice Requirement; Procedurally, (1) if the dismissal is based on a just cause under Article 282 of the Labor Code, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment, and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation; Failure to observe due process in a dismissal for just or authorized cause does not invalidate the dismissal but makes the employer liable for non-compliance with the procedural requirements of due process.—Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation. From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the

Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed. In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability. In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process. Same; Same; Same; Same; The fact that the employee may not be residing in the address indicated in the employer’s records does not excuse the employer from sending the notices to the employee’s last known address.—The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee’s last known address. Thus, it should be held liable for non-compliance with the procedural requirements of due process.

Same; Same; Same; Same; The Court believes that the ruling in Serrano v. National Labor Relations Commission, 323 SCRA 445 (2000), did not consider the full meaning of Article 279 of the Labor Code which provision means that the termination is illegal only if it is not for any of the justified or authorized causes provided by law and that payment of backwages and other benefits, including reinstatement, is justified only if the employee was unjustly dismissed; The fact that the Serrano ruling can cause unfairness and injustice which elicited strong dissent has prompted the Court to revisit the doctrine.—The rationale for the re-examination of the Wenphil doctrine in Serrano was the significant number of cases involving dismissals without requisite notices. We

concluded that the imposition of penalty by way of damages for violation of the notice requirement was not serving as a deterrent. Hence, we now required payment of full backwages from the time of dismissal until the time the Court finds the dismissal was for a just or authorized cause. Serrano was confronting the practice of employers to “dismiss now and pay later” by imposing full backwages. We believe, however, that the ruling in Serrano did not consider the full meaning of Article 279 of the Labor Code which states: ART. 279. Security of Tenure.—In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. This means that the termination is illegal only if it is not for any of the justified or authorized causes provided by law. Payment of backwages and other benefits, including reinstatement, is justified only if the employee was unjustly dismissed. The fact that the Serrano ruling can cause unfairness and injustice which elicited strong dissent has prompted us to revisit the doctrine.

Same; Same; Same; Constitutional Law; The Due Process Clause in Article III, Section 1 of the Constitution embodies a system of rights based on moral principles so deeply imbedded in the traditions and feelings of our people as to be deemed fundamental to a civilized society as conceived by our entire history.—To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies a system of rights based on moral principles so deeply imbedded in the traditions and feelings of our people as to be deemed fundamental to a civilized society as conceived by our entire history. Due process is that which comports with the deepest notions of what is fair and right and just. It is a constitutional restraint on the legislative as well as on the executive and judicial powers of the government provided by the Bill of Rights.

Same; Same; Same; Same; Statutory due process should be differentiated from failure to comply with constitutional due process—constitutional due process protects the individual from the government and assures him of his rights in criminal, civil or administrative proceedings while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing.—Due

process under the Labor Code, like Constitutional due process, has two aspects: substantive, i.e., the valid and authorized causes of employment termination under the Labor Code; and procedural, i.e., the manner of dismissal. Procedural due process requirements for dismissal are found in the Implementing Rules of P.D. 442, as amended, otherwise known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and 10. Breaches of these due process requirements violate the Labor Code. Therefore statutory due process should be differentiated from failure to comply with constitutional due process. Constitutional due process protects the individual from the government and assures him of his rights in criminal, civil or administrative proceedings; while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing. Same; Same; Same; The better rule is to abandon the Serrano doctrine and to follow Wenphil v. National Labor Relations Commission, 170 SCRA 69 (1989), by holding that the dismissal was for just cause but imposing sanctions on the employer, which sanctions, however, must be stiffer than that imposed in Wenphil.—After carefully analyzing the consequences of the divergent doctrines in the law on employment termination, we believe that in cases involving dismissals for cause but without observance of the twin requirements of notice and hearing, the better rule is to abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the employer. Such sanctions, however, must be stiffer than that imposed in Wenphil. By doing so, this Court would be able to achieve a fair result by dispensing justice not just to employees, but to employers as well. Same; Same; Same; The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers—the commitment of this Court to the cause of labor does not prevent it from sustaining the employer when it is in the right.—The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not complying with statutory due process may have far-reaching consequences. This would encourage frivolous suits, where even the most notorious violators of company policy are rewarded by invoking due process. This also creates absurd situations where there is a just or authorized cause for dismissal but a procedural infirmity invalidates the termination. Let us take for example a case where the employee is caught stealing or threatens the lives of his co-employees or has become a criminal, who has fled and cannot be found, or where serious business losses demand that operations be ceased in less than a month. Invalidating the dismissal would not serve public interest. It could also discourage investments that can generate employment in the local economy. The constitutional

policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment of this Court to the cause of labor does not prevent us from sustaining the employer when it is in the right, as in this case. Certainly, an employer should not be compelled to pay employees for work not actually performed and in fact abandoned. The employer should not be compelled to continue employing a person who is admittedly guilty of misfeasance or malfeasance and whose continued employment is patently inimical to the employer. The law protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. Same; Same; Social Justice; An employee who is clearly guilty of conduct violative of Article 282 should not be protected by the Social Justice Clause of the Constitution—social justice must be founded on the recognition of the necessity of interdependence among diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life; Social justice is not based on rigid formulas set in stone— it has to allow for changing times and circumstances.—An employee who is clearly guilty of conduct violative of Article 282 should not be protected by the Social Justice Clause of the Constitution. Social justice, as the term suggests, should be used only to correct an injustice. As the eminent Justice Jose P. Laurel observed, social justice must be founded on the recognition of the necessity of interdependence among diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about “the greatest good to the greatest number.” This is not to say that the Court was wrong when it ruled the way it did in Wenphil, Serrano and related cases. Social justice is not based on rigid formulas set in stone. It has to allow for changing times and circumstances. Same; Same; Due Process; The violation of an employee’s right to statutory due process by the employer warrants the payment of indemnity in the form of nominal damages, the amount of which is addressed to the sound discretion of the court, taking into account the relevant circumstances.—The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process

rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules. Same; Evidence; Payment; Burden of Proof; As a general rule, one who pleads payment has the burden of proving it—even where the employee must allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove non-payment.—We affirm the ruling of the appellate court on petitioners’ money claims. Private respondent is liable for petitioners’ holiday pay, service incentive leave pay and 13th month pay without deductions. As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove nonpayment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents—which will show that overtime, differentials, service incentive leave and other claims of workers have been paid—are not in the possession of the worker but in the custody and absolute control of the employer. Same; Wages; Thirteenth Month Pay; The 13th month pay is included in the definition of wage under Article 97(f) of the Labor Code from which the employer is prohibited under Article 113 from making any deductions without the employee’s knowledge and consent.—Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio Agabon’s 13th month pay, we find the same to be unauthorized. The evident intention of Presidential Decree No. 851 is to grant an additional income in the form of the 13th month pay to employees not already receiving the same so as “to further protect the level of real wages from the ravages of world-wide inflation.” Clearly, as additional income, the 13th month pay is included in the definition of wage under Article 97(f) of the Labor Code, to wit: (f) “Wage” paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee . . .” from which an employer is prohibited under Article 113 of the same Code from making any deductions without the employee’s knowledge and consent. In the instant case, private respondent failed to show that the deduction of the SSS loan and the value of the shoes from petitioner Virgilio Agabon’s 13th month

pay was authorized by the latter. The lack of authority to deduct is further bolstered by the fact that petitioner Virgilio Agabon included the same as one of his money claims against private respondent

RETROACTIVE APPLICATIN OF AGABON DOCTRINE A. G.R. No. 164662 February 18, 2013 MARIA LOURDES C. DE JESUS, vs. HON. RAUL T. AQUINO, PRESIDING COMMISSIONER, NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, QUEZON CITY, and SUPERSONIC SERVICES, INC.

G.R. No. 165787 February 18, 2013 SUPERSONIC SERVICES, INC., vs. MARIA LOURDES C. DE JESUS Statutory Construction; Judicial Interpretation; As a rule, a judicial interpretation becomes a part of the law as of the date that the law was originally passed, subject only to the qualification that when a doctrine of the Court is overruled and the Court adopts a different view, and more so when there is a reversal of the doctrine, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted in good faith.—The CA did not err. Relying on Serrano, the CA precisely ruled that the violation by Supersonic of the two-written notice requirement rendered ineffectual the dismissal of De Jesus for just cause under Article 282 of the Labor Code, and entitled her to be paid full backwages from the time of her dismissal until the finality of its decision. The Court cannot ignore that the applicable case law when the CA promulgated its decision on July 23, 2004, and when it denied Supersonic’s motion for reconsideration on October 21, 2004 was still Serrano. Considering that the Court determines in this appeal by petition for review on certiorari only whether or not the CA committed an error of law in promulgating its assailed decision of July 23, 2004, the CA cannot be declared to have erred on the basis of Serrano being meanwhile abandoned through Agabon if all that the CA did was to fully apply the law and jurisprudence applicable at the time of its rendition of the

judgment. As a rule, a judicial interpretation becomes a part of the law as of the date that the law was originally passed, subject only to the qualification that when a doctrine of the Court is overruled and the Court adopts a different view, and more so when there is a reversal of the doctrine, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted in good faith. To hold otherwise would be to deprive the law of its quality of fairness and justice, for, then, there is no recognition of what had transpired prior to such adjudication. Labor Law; Agabon Doctrine; Under Agabon, the new doctrine is that the failure of the employer to observe the requirements of due process in favor of the dismissed employee (that is, the two-written notices rule) should not invalidate or render ineffectual the dismissal for just or authorized cause.—Although Agabon, being promulgated only on November 17, 2004, ought to be prospective, not retroactive, in its operation because its language did not expressly state that it would also operate retroactively, the Court has already deemed it to be the wise judicial course to let its abandonment of Serrano be retroactive as its means of giving effect to its recognition of the unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not complying with statutory due process. Under Agabon, the new doctrine is that the failure of the employer to observe the requirements of due process in favor of the dismissed employee (that is, the two-written notices rule) should not invalidate or render ineffectual the dismissal for just or authorized cause. The Agabon Court plainly saw the likelihood of Serrano producing unfair but far-reaching consequences, such as, but not limited to, encouraging frivolous suits where even the most notorious violators of company policies would be rewarded by invoking due process; to having the constitutional policy of providing protection to labor be used as a sword to oppress the employers; and to compelling the employers to continue employing persons who were admittedly guilty of misfeasance or malfeasance and whose continued employment would be patently inimical to the interest of employers. EFFECT OF REVERSAL OF EXECUTED JUDGMENT A. G.R. No. 202791 June 10, 2013 PHILIPPINE TRANSMARINE CARRIERS, INC., vs. LEANDRO LEGASPI

Labor Law; Certiorari; In St. Martin Funeral Home v. National Labor Relations Commission, 295 SCRA 494 (1998), it was ruled that judicial review of decisions of the National Labor Relations Commission (NLRC) may be sought via a petition for certiorari before the Court of Appeals under Rule 65 of the Rules of Court; and under Section 4 thereof, petitioners are allowed sixty (60) days from notice of the assailed order or resolution within which to file the petition.— Section 14, Rule VII of the 2011 NLRC Rules of Procedure provides that decisions, resolutions or orders of the NLRC shall become final and executory after ten (10) calendar days from receipt thereof by the parties, and entry of judgment shall be made upon the expiration of the said period. In St. Martin Funeral Home v. NLRC, 295 SCRA 494 (1998), however, it was ruled that judicial review of decisions of the NLRC may be sought via a petition for certiorari before the CA under Rule 65 of the Rules of Court; and under Section 4 thereof, petitioners are allowed sixty (60) days from notice of the assailed order or resolution within which to file the petition. Hence, in cases where a petition for certiorari is filed after the expiration of the 10-day period under the 2011 NLRC Rules of Procedure but within the 60-day period under Rule 65 of the Rules of Court, the CA can grant the petition and modify, nullify and reverse a decision or resolution of the NLRC. Civil Law; Contracts; As the agreement was voluntarily entered into and represented a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind.— As the agreement was voluntarily entered into and represented a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. Respondent agreed to the stipulation that he would return the amount paid to him in the event that the petition for certiorari would be granted. Since the petition was indeed granted by the CA, albeit partially, respondent must comply with the condition to return the excess amount. Human Relations; Unjust Enrichment; Words and Phrases; Unjust enrichment is a term used to depict result or effect of failure to make remuneration of or for property or benefits received under circumstances that give rise to legal or equitable obligation to account for them.—Unjust enrichment is a term used to depict result or effect of failure to make remuneration of or for property or benefits received under circumstances that give rise to legal or equitable obligation to account for them. To be entitled to remuneration, one must confer benefit

by mistake, fraud, coercion, or request. Unjust enrichment is not itself a theory of reconveyance. Rather, it is a prerequisite for the enforcement of the doctrine of restitution. There is unjust enrichment when: 1. A person is unjustly benefited; and 2. Such benefit is derived at the expense of or with damages to another. VALIDITY OF RELEASE AND QUITCLAIM A. G.R. No. 198662 September 12, 2012 RADIO MINDANAO NETWORK, INC. and ERIC S. CANOY, vs. DOMINGO Z. YBAROLA, JR. and ALFONSO E. RIVERA, JR., Labor Law; Quitclaims; The separation pay the respondents each received was deficient by at least P400,000.00; thus, they were given only half of the amount they were legally entitled to. To be sure, a settlement under these terms is not and cannot be a reasonable one, given especially the respondents’ length of service―25 years for Ybarola and 19 years for Rivera.―In Talam, the employee received a valuable consideration for his less than two years of service with the company; he was not shortchanged and no essential unfairness took place. In this case, as the CA noted, the separation pay the respondents each received was deficient by at least P400,000.00; thus, they were given only half of the amount they were legally entitled to. To be sure, a settlement under these terms is not and cannot be a reasonable one, given especially the respondents’ length of service―25 years for Ybarola and 19 years for Rivera. The CA was correct when it opined that the respondents were in dire straits when they executed the release/quitclaim affidavits. Without jobs and with families to support, they dallied in executing the quitclaim instrument, but were eventually forced to sign given their circumstances.

B. G.R. No. 197528 September 5, 2012 PERT/CPM MANPOWER EXPONENT CO., INC., , vs. ARMANDO A. VINUYA, LOUIE M. ORDOVEZ, ARSENIO S. LUMANTA, JR., ROBELITO S. ANIPAN, VIRGILIO R. ALCANTARA, MARINO M. ERA, SANDY O. ENJAMBRE and NOEL T. LADEA,. Labor Law; Illegal Recruitment; Words and Phrases; Article 38 of the Labor Code, as amended by R.A. 8042, defined “illegal

recruitment” to include the following act: To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment.—Clearly, the agency and Modern Metal committed a prohibited practice and engaged in illegal recruitment under the law. Article 34 of the Labor Code provides: Art. 34. Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of authority: x x x x (i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor[.] Further, Article 38 of the Labor Code, as amended by R.A. 8042, defined “illegal recruitment” to include the following act: (i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment[.] Same; Termination of Employment; Constructive Dismissal; A constructive dismissal or discharge is a quitting because continued employment is rendered impossible, unreasonable or unlikely, as, an offer involving a demotion in rank and a diminution in pay.— With their original contracts substituted and their oppressive working and living conditions unmitigated or unresolved, the respondents’ decision to resign is not surprising. They were compelled by the dismal state of their employment to give up their jobs; effectively, they were constructively dismissed. A constructive dismissal or discharge is “a quitting because continued employment is rendered impossible, unreasonable or unlikely, as, an offer involving a demotion in rank and a diminution in pay.” Statutory Construction; Retroactivity of Laws; Laws shall have no retroactive effect, unless the contrary is provided.—Laws shall have no retroactive effect, unless the contrary is provided. By its very nature, the amendment introduced by R.A. 10022—restoring a provision of R.A. 8042 declared unconstitutional—cannot be given retroactive effect, not only because there is no express declaration of retroactivity in the law, but because retroactive application will result in an impairment of a right that had accrued to the respondents by virtue of the Serrano

ruling—entitlement to their salaries for the unexpired portion of their employment contracts. C. G.R. No. 193493 June 13, 2013 JAIME N. GAPAYAO, vs. ROSARIO FULO, SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION. Remedial Law; Civil Procedure; Appeals; Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the Court of Appeals.―At the outset, it is settled that the Court is not a trier of facts and will not weigh evidence all over again. Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the CA. For as long as these findings are supported by substantial evidence, they must be upheld. Labor Law; Regular Employees; Project Employees; Casual Employees; Jurisprudence has identified the three types of employees mentioned in Article 280 of the Labor Code.―Jurisprudence has identified the three types of employees mentioned in the provision: (1) regular employees or those who have been engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of their engagement, or those whose work or service is seasonal in nature and is performed for the duration of the season; and (3) casual employees or those who are neither regular nor project employees. Same; Same; For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular activity they perform and the usual trade or business of the employer.―Farm workers generally fall under the definition of seasonal employees. We have consistently held that seasonal employees may be considered as regular employees. Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employer is such that during the off season, they

are temporarily laid off; but reemployed during the summer season or when their services may be needed. They are in regular employment because of the nature of their job, and not because of the length of time they have worked. The rule, however, is not absolute. In Hacienda Fatima v. National Federation of Sugarcane Workers-Food & General Trade, 396 SCRA 518 (2003), the Court held that seasonal workers who have worked for one season only may not be considered regular employees. Similarly, in Mercado, Sr. v. NLRC, 201 SCRA 332 (1991), it was held that when seasonal employees are free to contract their services with other farm owners, then the former are not regular employees. For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular activity they perform and the usual trade or business of the employer. This test has been explained thoroughly in De Leon v. NLRC, 176 SCRA 615 (1989), viz.: The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. Same; Pakyaw Workers; Words and Phrases; Control Test; Pakyaw workers are considered employees for as long as their employers exercise control over them.―Pakyaw workers are considered employees for as long as their employers exercise control over them. In Legend Hotel Manila v. Realuyo, 677 SCRA 10 (2012), the Court held that “the power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship. This is the so-called control test and is premised on whether the person for whom the services are performed reserves the right to control both the end achieved and the manner and means used to achieve that end.” It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. It is not essential that the employer

actually supervises the performance of duties by the employee. It is enough that the former has a right to wield the power. D. G.R. No. 167225 October 22, 2014 RADIO MINDANAO NETWORK, INC., vs. MICHAEL MAXIMO R. AMURAO III. Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; Question of Fact; The Supreme Court (SC) recognizes that the issue concerning the validity of the quitclaim was a question of fact that is not within the province of a review on certiorari under Rule 45.—This Court recognizes that the issue concerning the validity of the quitclaim was a question of fact that is not within the province of a review on certiorari under Rule 45. However, there is reason to hold that the CA manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different conclusion herein. On that basis, the Court has to delve into the factual issue, and has to review the evidence again to ensure that its ruling on the issue jibes with the evidence on record. Its doing so is an acceptable exception to the general rule of non-review of factual matters. Labor Law; Quitclaims; A quitclaim is invalid or contrary to public policy only: (1) where there is clear proof that the waiver was wrangled from an unsuspecting or gullible person; or (2) where the terms of settlement are unconscionable on their face.—Not all quitclaims are per se invalid or against public policy. A quitclaim is invalid or contrary to public policy only: (1) where there is clear proof that the waiver was wrangled from an unsuspecting or gullible person; or (2) where the terms of settlement are unconscionable on their face. In instances of invalid quitclaims, the law steps in to annul the questionable waiver. Indeed, there are legitimate waivers that represent the voluntary and reasonable settlements of laborers’ claims that should be respected by the Court as the law between the parties. Where the party has voluntarily made the waiver, with a full understanding of its terms as well as its consequences, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking, and may not later be disowned simply because of a change of mind. A waiver is essentially contractual.

Same; Same; The quitclaim is ineffective in barring recovery of the full measure of an employee’s rights only when the transaction is shown to be questionable and the consideration is scandalously low and inequitable.—With the quitclaim having been freely and voluntarily signed, RMN was released and absolved from any liability in favor of Michael. Suffice it to say that the quitclaim is ineffective in barring recovery of the full measure of an employee’s rights only when the transaction is shown to be questionable and the consideration is scandalously low and inequitable. Such is not true here. E. G.R. No. 173012 June 13, 2012 DOLORES T. ESGUERRA, petitioner, vs. VALLE VERDE COUNTRY CLUB, INC. and ERNESTO VILLALUNA, respondents. Labor Law; Termination of Employment; Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold: the substantive and the procedural aspects.—Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold[:] the substantive and the procedural aspects. Not only must the dismissal be for a just or authorized cause, the rudimentary requirements of due process—notice and hearing—must, likewise, be observed x x x. Without the concurrence of the two, the termination would x x x be illegal[;] employment is a property right of which one cannot be deprived of without due process. Same; Same; Right to be Heard; The existence of an actual, formal “trial-type” hearing, although preferred, is not absolutely necessary to satisfy the employee’s right to be heard.—In sum, the existence of an actual, formal “trial-type” hearing, although preferred, is not absolutely necessary to satisfy the employee’s right to be heard. Esguerra was able to present her defenses; and only upon proper consideration of it did Valle Verde send the second memorandum terminating her employment. Since Valle Verde complied with the twonotice requirement, no procedural defect exists in Esguerra’s termination. Same; Same; Loss of Trust and Confidence; In Jardine Davies, Inc. v. National Labor Relations Commission, 311 SCRA 289 (1999), we held that loss of confidence as a just cause for termination of employment can be invoked when an employee holds a position of responsibility, trust and confidence.—In Jardine Davies, Inc. v.

National Labor Relations Commission, 311 SCRA 289 (1999), we held that loss of confidence as a just cause for termination of employment can be invoked when an employee holds a position of responsibility, trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be related to the performance of the duties of the dismissed employee and must show that he or she is unfit to continue working for the employer for violation of the trust reposed in him or her. F. G.R. No. 185335 June 13, 2012 PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEE LABOR UNION and SANDY T. VALLOTA, vs. NATIONAL LABOR RELATIONS COMMISSION, PRUDENTIAL GUARANTEE AND ASSURANCE INC., and/or JOCELYN RETIZOS. Labor Law; Termination of Employment; Loss of Trust and Confidence; To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on learly established facts; A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.—To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion; otherwise, the employee would remain eternally at the mercy of the employer. Further, in order to constitute a just cause for dismissal, the act complained of must be work-related and show that the employee concerned is unfit to continue working for the employer. Such ground for dismissal has never been intended to afford an occasion for abuse because of its subjective nature. Same; Same; Illegal Dismissals; In illegal dismissal cases, the burden of proof is upon the employer to show by substantial evidence that the employee’s termination from service is for a just and valid cause.—It must also be remembered that in illegal dismissal cases like the one at bench, the burden of proof is upon the employer to show that the employee’s termination from service is for a just and valid cause.

The employer’s case succeeds or fails on the strength of its evidence and not the weakness of that adduced by the employee, in keeping with the principle that the scales of justice should be tilted in favor of the latter in case of doubt in the evidence presented by them. Often described as more than a mere scintilla, the quantum of proof is substantial evidence which is understood as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise. Failure of the employer to discharge the foregoing onus would mean that the dismissal is not justified and, therefore, illegal. Same; Same; When the act complained of is not so grave as to result in a complete loss of trust and confidence, a lower penalty such as censure, warning, or even suspension, would be more circumspect.—Termination of employment is a drastic measure reserved for the most serious of offenses. When the act complained of is not so grave as to result in a complete loss of trust and confidence, a lower penalty such as censure, warning, or even suspension, would be more circumspect. This is of particular significance here where during Vallota’s ten years of service to PGAI, not once was he ever warned or reprimanded for such printing services. Same; Same; Strained Relations; Reinstatement; Backwages; Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative; An illegally dismissed employee is entitled to two reliefs: backwages and reinstatement, which are separate and distinct.—In view of the strained relations between Vallota and PGAI, however, it is not in the best interest of the parties, nor is it advisable or practical to order reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. It must be stressed, however, that an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement, which are separate and distinct. G. G.R. No. 174893 July 11, 2012 FLORDELIZA MARIA REYES-RAYEL, vs. PHILIPPINE LUEN THAI HOLDINGS, CORPORATION/L&T INTERNATIONAL GROUP PHILIPPINES, INC.

Labor Law; Termination of Employment; Loss of Trust and Confidence; Managerial Employees; As distinguished from a rank and file personnel, mere existence of a basis for believing that a managerial employee has breached the trust of the employer justifies dismissal.—Jurisprudence provides that an employer has a distinct prerogative and wider latitude of discretion in dismissing a managerial personnel who performs functions which by their nature require the employer’s full trust and confidence. As distinguished from a rank and file personnel, mere existence of a basis for believing that a managerial employee has breached the trust of the employer justifies dismissal. “[L]oss of confidence as a ground for dismissal does not require proof beyond reasonable doubt as the law requires only that there be at least some basis to justify it.” Same; Same; Management Prerogative; An employer has the right to regulate, according to its discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers.—An employer “has the right to regulate, according to its discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers.” “[S]o long as they are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements,” the exercise of this management prerogative must be upheld. Same; Due Process; The Supreme Court pronounced that an employee may be afforded ample opportunity to be heard by means of any method, verbal or written, whether in a hearing, conference or some other fair, just and reasonable way.—Neither can there be any denial of due process due to the absence of a hearing or investigation at the company level. It has been held in a plethora of cases that due process requirement is met when there is simply an opportunity to be heard and to explain one’s side even if no hearing is conducted. In the case of Perez v. Philippine Telegraph and Telephone Company, 584 SCRA 110 (2009), this Court pronounced that an employee may be afforded ample opportunity to be heard by means of

any method, verbal or written, whether in a hearing, conference or some other fair, just and reasonable way. H. G.R. No. 193789 September 19, 2012 ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V. CRUZ, ROSEMARIE P. PIMENTEL, and ROWENA B. BARDAJE, vs. BIOMEDICA HEALTH CARE, INC. and CARINA “KAREN” J. MOTOL. Labor Law; Termination of Employment; The termination of employment must be based on a just or authorized cause of dismissal and the dismissal must be effected after due notice and hearing.―It bears pointing out that in the dismissal of an employee, the law requires that due process be observed. Such due process requirement is two-fold, procedural and substantive, that is, “the termination of employment must be based on a just or authorized cause of dismissal and the dismissal must be effected after due notice and hearing.” In the instant case, petitioners were not afforded both procedural and substantive due process. Same; Same; Petitioners were charged with conducting an illegal strike, not a mass leave, without specifying the exact acts that the company considers as constituting an illegal strike or violative of company policies. Such allegation falls short of the requirement in King of Kings Transport, Inc. of “a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees.”―Petitioners were charged with conducting an illegal strike, not a mass leave, without specifying the exact acts that the company considers as constituting an illegal strike or violative of company policies. Such allegation falls short of the requirement in King of Kings Transport, Inc. of “a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees.” A bare mention of an “illegal strike” will not suffice. Same; Same; It is incumbent upon respondent company to show that petitioners were duly informed of said company policies at the time of their employment and were given copies of these policies.―It is incumbent upon respondent company to show that petitioners were duly informed of said company policies at the time of their employment and were given copies of these policies. No such proof was presented by respondents. There was even no mention at all that such requirement was met. Worse, respondent Biomedica did not even

quote or reproduce the company policies referred to in the notice as pointed out by the CA stating: It must be noted that the company policy which the petitioner was referring to was not quoted or reproduced in the petition, a copy of which is not also appended in the petition, as such we cannot determine the veracity of the existence of said policy. Without a copy of the company policy being presented in the CA or the contents of the pertinent policies being quoted in the pleadings, there is no way by which one can determine whether or not there was, indeed, a violation of said company policies. Same; Same; Serious Misconduct; To justify the dismissal of an employee on the ground of serious misconduct, the employer must first establish that the employee is guilty of improper conduct, that the employee violated an existing and valid company rule or regulation, or that the employee is guilty of a wrongdoing.―Clearly, to justify the dismissal of an employee on the ground of serious misconduct, the employer must first establish that the employee is guilty of improper conduct, that the employee violated an existing and valid company rule or regulation, or that the employee is guilty of a wrongdoing. In the instant case, Biomedica failed to even establish that petitioners indeed violated company rules, failing to even present a copy of the rules and to prove that petitioners were made aware of such regulations. In fact, from the records of the case, Biomedica has failed to prove that petitioners are guilty of a wrongdoing that is punishable with termination from employment. Same; Same; Mass Leave; Words and Phrases; The phrase “mass leave” may refer to a simultaneous availment of authorized leave benefits by a large number of employees in a company.―The term “Mass Leave” has been left undefined by the Labor Code. Plainly, the legislature intended that the term’s ordinary sense be used. “Mass” is defined as “participated in, attended by, or affecting a large number of individuals; having a large-scale character.” While the term “Leave” is defined as “an authorized absence or vacation from duty or employment usually with pay.” Thus, the phrase “mass leave” may refer to a simultaneous availment of authorized leave benefits by a large number of employees in a company. Same; Same; Same; It is undeniable that going on leave or absenting one’s self from work for personal reasons when they have leave benefits available is an employee’s right.―It is undeniable that going on leave or absenting one’s self from work for personal reasons when

they have leave benefits available is an employee’s right. In Davao Integrated Port Stevedoring Services v. Abarquez, 220 SCRA 197 (1993), the Court acknowledged sick leave benefits as a legitimate economic benefit of an employee, carrying a purpose that is at once legal as it is practical: Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and vacation leave benefits, among others, are by their nature, intended to be replacements for regular income which otherwise would not be earned because an employee is not working during the period of said leaves. They are non-contributory in nature, in the sense that the employees contribute nothing to the operation of the benefits. By their nature, upon agreement of the parties, they are intended to alleviate the economic condition of the workers. In addition to sick leave, the company, as a policy or practice or as agreed to in a CBA, grants vacation leave to employees. Lastly, even the Labor Code grants a service incentive leave of 5 days to employees. Same; Same; In case of doubt, a case should be resolved in favor of labor pursuant to the social justice policy of labor laws and the Constitution.―It cannot be overemphasized that in case of doubt, a case should be resolved in favor of labor. As aptly stated in Century Canning Corporation v. Ramil, 627 SCRA 192 (2010): x x x Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution. Biomedica has failed to adduce substantial evidence to prove that petitioners’ dismissal from their employment was for a just or authorized cause. The conclusion is inescapable that petitioners were illegally dismissed. Same; Same; An ordinary striking worker cannot be terminated for mere participation in an illegal strike.―It has not been shown that petitioners are officers of the Union. On this issue, the NLRC correctly cited Gold City Integrated Port Service, Inc. v. NLRC, 245 SCRA 627 (1995), wherein We ruled that: “An ordinary striking worker cannot be terminated for mere participation in an illegal Same; Same; Reinstatement; Backwages; Given the illegality of their dismissal, petitioners are entitled to reinstatement and backwages as provided in Article 279 of the Labor Code.―Given the illegality of their dismissal, petitioners are entitled to reinstatement and backwages as provided in Art. 279 of the Labor Code, which states: An employee who is unjustly dismissed from work shall be entitled to reinstatement

without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Same; Same; Separation Pay; Strained Relationship Doctrine; Petitioners were terminated in swift fashion and in gross violation of their right to due process revealing that they are no longer wanted in the company. The convergence of these facts coupled with the filing by petitioners of their complaint with the Department of Labor and Employment (DOLE) shows a relationship governed by antipathy and antagonism as to justify the award of separation pay in lieu of reinstatement.―Respondent Motol, in the course of denying entry to them on November 8, 2006, uttered harsh, degrading and bad words. Petitioners were terminated in swift fashion and in gross violation of their right to due process revealing that they are no longer wanted in the company. The convergence of these facts coupled with the filing by petitioners of their complaint with the DOLE shows a relationship governed by antipathy and antagonism as to justify the award of separation pay in lieu of reinstatement. Thus, in addition to backwages, owing to the strained relations between the parties, separation pay in lieu of reinstatement would be proper. NOTICE OD INTENTION TO TERMINATE EMPLOYMENT A. G.R. No. 185280 January 18, 2012 TIMOTEO H. SARONA, vs. NATIONAL LABOR RELATIONS COMMISSION, ROYALE SECURITY AGENCY (FORMERLY SCEPTRE SECURITY AGENCY) and CESAR S. TAN, Labor Law; Money Claims; The prevailing party’s receipt of the full amount of the judgment award pursuant to a writ of execution issued by the labor arbiter does not close or terminate the case if such receipt is qualified as without prejudice to the outcome of the petition for certiorari pending with the Court of Appeals (CA).— The petitioner’s receipt of the monetary award adjudicated by the NLRC is not absolute, unconditional and unqualified. The petitioner’s May 3, 2007 Motion for Release contains a reservation, stating in his prayer that: “it is respectfully prayed that the respondents and/or Great Domestic Insurance Co. be ordered to RELEASE/GIVE the amount of P23,521.67 in favor of the complainant TIMOTEO H. SARONA without

prejudice to the outcome of the petition with the CA.” In Leonis Navigation Co., Inc., et al. v. Villamater, et al., 614 SCRA 182 (2010), this Court ruled that the prevailing party’s receipt of the full amount of the judgment award pursuant to a writ of execution issued by the labor arbiter does not close or terminate the case if such receipt is qualified as without prejudice to the outcome of the petition for certiorari pending with the CA. Same; The finality of the National Labor Relations Commission’s (NLRC’s) decision does not preclude the filing of a petition for certiorari under Rule 65 of the Rules of Court.—The finality of the NLRC’s decision does not preclude the filing of a petition for certiorari under Rule 65 of the Rules of Court. That the NLRC issues an entry of judgment after the lapse of ten (10) days from the parties’ receipt of its decision will only give rise to the prevailing party’s right to move for the execution thereof but will not prevent the CA from taking cognizance of a petition for certiorari on jurisdictional and due process considerations. In turn, the decision rendered by the CA on a petition for certiorari may be appealed to this Court by way of a petition for review on certiorari under Rule 45 of the Rules of Court. Under Section 5, Article VIII of the Constitution, this Court has the power to “review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments and orders of lower courts in x x x all cases in which only an error or question of law is involved.” Consistent with this constitutional mandate, Rule 45 of the Rules of Court provides the remedy of an appeal by certiorari from decisions, final orders or resolutions of the CA in any case, i.e., regardless of the nature of the action or proceedings involved, which would be but a continuation of the appellate process over the original case. Since an appeal to this Court is not an original and independent action but a continuation of the proceedings before the CA, the filing of a petition for review under Rule 45 cannot be barred by the finality of the NLRC’s decision in the same way that a petition for certiorari under Rule 65 with the CA cannot. Same; Appeals; It is well-settled and oft-repeated that findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the Court of Appeals (CA).—As a general rule, this Court is not a trier of facts and a petition for review on certiorari under Rule 45 of the Rules of Court must exclusively raise

questions of law. Moreover, if factual findings of the NLRC and the LA have been affirmed by the CA, this Court accords them the respect and finality they deserve. It is well-settled and oft-repeated that findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the CA. Nevertheless, this Court will not hesitate to deviate from what are clearly procedural guidelines and disturb and strike down the findings of the CA and those of the labor tribunals if there is a showing that they are unsupported by the evidence on record or there was a patent misappreciation of facts. Indeed, that the impugned decision of the CA is consistent with the findings of the labor tribunals does not per se conclusively demonstrate the correctness thereof. By way of exception to the general rule, this Court will scrutinize the facts if only to rectify the prejudice and injustice resulting from an incorrect assessment of the evidence presented. Same; Procedural Rules and Technicalities; Technical rules are not binding in labor cases and are not to be applied strictly if the result would be detrimental to the working man.—Under Section 4(c), Rule VI of the NLRC Rules, the NLRC shall limit itself to reviewing and deciding only the issues that were elevated on appeal. The NLRC, while not totally bound by technical rules of procedure, is not licensed to disregard and violate the implementing rules it implemented. Nonetheless, technicalities should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. Technical rules are not binding in labor cases and are not to be applied strictly if the result would be detrimental to the working man. This Court may choose not to encumber itself with technicalities and limitations consequent to procedural rules if such will only serve as a hindrance to its duty to decide cases judiciously and in a manner that would put an end with finality to all existing conflicts between the parties. Corporation Law; Piercing the Veil of Corporate Fiction; It has a personality separate and distinct from the persons composing it, as well as from any other legal entity to which it may be related. Equally well-settled is the principle that the corporate mask may be removed or the corporate veil pierced when the corporation is just an alter ego of a person or of another corporation.—A corporation is an artificial being created by operation of law. It possesses the right of succession and such powers, attributes, and

properties expressly authorized by law or incident to its existence. It has a personality separate and distinct from the persons composing it, as well as from any other legal entity to which it may be related. This is basic. Equally well-settled is the principle that the corporate mask may be removed or the corporate veil pierced when the corporation is just an alter ego of a person or of another corporation. For reasons of public policy and in the interest of justice, the corporate veil will justifiably be impaled only when it becomes a shield for fraud, illegality or inequity committed against third persons. Same; Same; Instances When the Doctrine of Piercing the Corporate Veil Applies.—The doctrine of piercing the corporate veil applies only in three (3) basic areas, namely: 1) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; 2) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a crime; or 3) alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation. Same; Same; A settled formulation of the doctrine of piercing the corporate veil is that when two business enterprises are owned, conducted and controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties, disregard the legal fiction that these two entities are distinct and treat them as identical or as one and the same.—For the piercing doctrine to apply, it is of no consequence if Sceptre is a sole proprietorship. As ruled in Prince Transport, Inc., et al. v. Garcia, et al., 639 SCRA 312 (2011), it is the act of hiding behind the separate and distinct personalities of juridical entities to perpetuate fraud, commit illegal acts, evade one’s obligations that the equitable piercing doctrine was formulated to address and prevent: A settled formulation of the doctrine of piercing the corporate veil is that when two business enterprises are owned, conducted and controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties, disregard the legal fiction that these two entities are distinct and treat them as identical or as one and the same. In the present case, it may be true that Lubas is a single proprietorship and not a corporation. However, petitioners’ attempt to isolate themselves from and hide behind the supposed separate and distinct personality of

Lubas so as to evade their liabilities is precisely what the classical doctrine of piercing the veil of corporate entity seeks to prevent and remedy. Labor Law; Separation Pay; Separation pay is computed from the commencement of employment up to the time of termination, including the imputed service for which the employee is entitled to backwages, with the salary rate prevailing at the end of the period of putative service being the basis for computation.— Effectively, the petitioner cannot be deemed to have changed employers as Royale and Sceptre are one and the same. His separation pay should, thus, be computed from the date he was hired by Sceptre in April 1976 until the finality of this decision. Based on this Court’s ruling in Masagana Concrete Products, et al. v. NLRC, et al., the intervening period between the day an employee was illegally dismissed and the day the decision finding him illegally dismissed becomes final and executory shall be considered in the computation of his separation pay as a period of “imputed” or “putative” service: Separation pay, equivalent to one month’s salary for every year of service, is awarded as an alternative to reinstatement when the latter is no longer an option. Separation pay is computed from the commencement of employment up to the time of termination, including the imputed service for which the employee is entitled to backwages, with the salary rate prevailing at the end of the period of putative service being the basis for computation. Same; Backwages; Backwages is a remedy affording the employee a way to recover what he has lost by reason of the unlawful dismissal.—Backwages is a remedy affording the employee a way to recover what he has lost by reason of the unlawful dismissal. In awarding backwages, the primordial consideration is the income that should have accrued to the employee from the time that he was dismissed up to his reinstatement and the length of service prior to his dismissal is definitely inconsequential. As early as 1996, this Court, in Bustamante, et al. v. NLRC, et al., clarified in no uncertain terms that if reinstatement is no longer possible, backwages should be computed from the time the employee was terminated until the finality of the decision, finding the dismissal unlawful. Same; Separation Pay; In case separation pay is awarded and reinstatement is no longer feasible, backwages shall be computed from the time of illegal dismissal up to the finality of the decision should separation pay not be paid in the meantime.—In case

separation pay is awarded and reinstatement is no longer feasible, backwages shall be computed from the time of illegal dismissal up to the finality of the decision should separation pay not be paid in the meantime. It is the employee’s actual receipt of the full amount of his separation pay that will effectively terminate the employment of an illegally dismissed employee. Otherwise, the employer-employee relationship subsists and the illegally dismissed employee is entitled to backwages, taking into account the increases and other benefits, including the 13th month pay, that were received by his co-employees who are not dismissed. It is the obligation of the employer to pay an illegally dismissed employee or worker the whole amount of the salaries or wages, plus all other benefits and bonuses and general increases, to which he would have been normally entitled had he not been dismissed and had not stopped working. Same; Damages; Moral Damages; Exemplary Damages; Moral damages may be recovered where the dismissal of the employee was tainted by bad faith or fraud, or where it constituted an act oppressive to labor, and done in a manner contrary to morals, good customs or public policy while exemplary damages are recoverable only if the dismissal was done in a wanton, oppressive, or malevolent manner.—Moral damages and exemplary damages at P25,000.00 each as indemnity for the petitioner’s dismissal, which was tainted by bad faith and fraud, are in order. Moral damages may be recovered where the dismissal of the employee was tainted by bad faith or fraud, or where it constituted an act oppressive to labor, and done in a manner contrary to morals, good customs or public policy while exemplary damages are recoverable only if the dismissal was done in a wanton, oppressive, or malevolent manner. B. G.R. No. 193756 April 10, 2013 VENANCIO S. REYES, EDGARDO C. DABBAY, WALTER A. VIGILIA, NEMECIO M. CALANNO, ROGELIO A. SUPE, JR., ROLAND R. TRINIDAD, and AURELIO A. DULDULAO, vs. RP GUARDIANS SECURITY AGENCY, INC. Labor Law; Termination of Employment; Constructive Dismissal; Security Guards; Temporary displacement or temporary off- detail of security guard is, generally, allowed in a situation where a security agency’s client decided not to renew their service contract with the agency and no post is available for the relieved

security guard. Such situation does not normally result in a constructive dismissal. Nonetheless, when the floating status lasts for more than six (6) months, the employee may be considered to have been constructively dismissed.—There is no doubt that petitioners were constructively dismissed. The LA, the NLRC and the CA were one in their conclusion that respondent was guilty of illegal dismissal when it placed petitioners on floating status beyond the reasonable six-month period after the termination of their service contract with Banco de Oro. Temporary displacement or temporary off detail of security guard is, generally, allowed in a situation where a security agency’s client decided not to renew their service contract with the agency and no post is available for the relieved security guard. Such situation does not normally result in a constructive dismissal. Nonetheless, when the floating status lasts for more than six (6) months, the employee may be considered to have been constructively dismissed. No less than the Constitution guarantees the right of workers to security of tenure, thus, employees can only be dismissed for just or authorized causes and after they have been afforded the due process of law. Same; Same; Illegal Dismissals; Reinstatement; Backwages; An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances and to his other benefits or their monetary equivalent computed from the time his compensation was withheld up to the time of actual reinstatement.—Settled is the rule that that an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges, and to his full backwages, inclusive of allowances and to his other benefits or their monetary equivalent computed from the time his compensation was withheld up to the time of actual reinstatement. If reinstatement is not possible, however, the award of separation pay is proper. Backwages and reinstatement are separate and distinct reliefs given to an illegally dismissed employee in order to alleviate the economic damage brought about by the employee’s dismissal. “Reinstatement is a restoration to a state from which one has been removed or separated” while “the payment of backwages is a form of relief that restores the income that was lost by reason of the unlawful dismissal.” Therefore, the award of one does not bar the other.

FINALITY OF DECISION A. G.R. No. 198423 October 23, 2012 LEO A. GONZALES, vs. SOLID CEMENT CORPORATION and ALLEN QUERUBIN. Labor Law; Backwages; In the case of BPI Employees Union―Metro Manila and Zenaida Uy v. Bank of the Philippine Islands and Bank of the Philippine Islands v. BPI Employees Union―Metro Manila and Zenaida Uy, G.R. Nos. 178699 and 178735, September 21, 2011, 658 SCRA 127, the Court ruled that in computing backwages, salary increases from the time of dismissal until actual reinstatement, and benefits not yet granted at the time of dismissal are excluded.―In the case of BPI Employees Union―Metro Manila and Zenaida Uy v. Bank of the Philippine Islands and Bank of the Philippine Islands v. BPI Employees Union―Metro Manila and Zenaida Uy, 658 SCRA 127 (2011), the Court ruled that in computing backwages, salary increases from the time of dismissal until actual reinstatement, and benefits not yet granted at the time of dismissal are excluded. Hence, we cannot fault the CA for finding that the NLRC committed grave abuse of discretion in awarding the salary differential amounting to P617,517.48 and the 13th month pay differentials amounting to P51,459.48 that accrued subsequent to Gonzales’ dismissal. Remedial Law; Special Civil Actions; Certiorari; In a certiorari petition, the scope of review is limited to the determination of whether a judicial or quasi-judicial tribunal acted without or in excess of its jurisdiction or grave abuse of discretion amounting to lack of jurisdiction; such grave abuse of discretion can exist when the ruling entity used the wrong considerations and thereby acted outside the contemplation of law.―In a certiorari petition, the scope of review is limited to the determination of whether a judicial or quasijudicial tribunal acted without or in excess of its jurisdiction or grave abuse of discretion amounting to lack of jurisdiction; such grave abuse of discretion can exist when the ruling entity used the wrong considerations and thereby acted outside the contemplation of law. In justifying the return to and adoption of the LA’s execution order, the CA solely relied on the doctrine of immutability of judgment which it considered to the exclusion of other attendant and relevant factors. This is a fatal error that amounted to grave abuse of discretion,

particularly on the award of 12% interest. The seminal case of Eastern Shipping Lines, Inc. v. Court of Appeals, 234 SCRA 78 (1994), cannot be clearer on the rate of interest that applies: 3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest x x x shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. (emphasis ours) Same; Civil Procedure; Judgments; Immutability of Final Judgments; The immutability principle, rather than being absolute, is subject to well-settled exceptions, among which is its inapplicability when a decision claimed to be final is not only erroneous, but null and void.―The above discussions unavoidably lead to the conclusion that the Court’s Minute Resolutions denying Gonzales’ petition were not properly issued and are tainted by the nullity of the CA decision these Resolutions effectively approved. We do not aim to defend these actions, however, by mechanically and blindly applying the principle of immutability of judgment, nor by tolerating the CA’s inappropriate application of this principle. The immutability principle, rather than being absolute, is subject to well-settled exceptions, among which is its inapplicability when a decision claimed to be final is not only erroneous, but null and void.

Pages 1043 to 1091 (XIV) RA 7641 “The New Retirement Plan” xxx

CASES A. G.R. No. 175558 February 8, 2012 SKIPPERS UNITED PACIFIC, INC. and SKIPPERS MARITIME SERVICES, INC., LTD., vs. NATHANIEL DOZA, NAPOLEON DE GRACIA, ISIDRO L. LATA, and CHARLIE APROSTA. Labor Law; Termination of Employment; Two-Notice Rule; The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first notice apprises the employee of the particular acts or omissions

for which his dismissal is sought; and (2) the second notice informs the employee of the employer’s decision to dismiss him.—For a worker’s dismissal to be considered valid, it must comply with both procedural and substantive due process. The legality of the manner of dismissal constitutes procedural due process, while the legality of the act of dismissal constitutes substantive due process. Procedural due process in dismissal cases consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second notice informs the employee of the employer’s decision to dismiss him. Before the issuance of the second notice, the requirement of a hearing must be complied with by giving the worker an opportunity to be heard. It is not necessary that an actual hearing be conducted. Substantive due process, on the other hand, requires that dismissal by the employer be made under a just or authorized cause under Articles 282 to 284 of the Labor Code. Same; Seafarers; Resignation; Article 285 of the Labor Code recognizes termination by the employee of the employment contract by “serving written notice on the employer at least one (1) month in advance.” In the absence of a written resignation, it is safe to presume that the employer terminated the seafarers.— Article 285 of the Labor Code recognizes termination by the employee of the employment contract by “serving written notice on the employer at least one (1) month in advance.” Given that provision, the law contemplates the requirement of a written notice of resignation. In the absence of a written resignation, it is safe to presume that the employer terminated the seafarers. In addition, the telex message relied upon by the Labor Arbiter and NLRC bore conflicting dates of 22 January 1998 and 22 January 1999, giving doubt to the veracity and authenticity of the document. In 22 January 1998, De Gracia, et al. were not even employed yet by the foreign principal. For these reasons, the dismissal of De Gracia, et al. was illegal. Same; Same; Home Allotment Pay; The seafarer is required to make an allotment of at least 80% of the seafarer’s salary which is payable once a month to his designated allottee in the Philippines through any authorized Philippine bank.—On the issue of home allotment pay, Skippers effectively admitted non-remittance of home allotment pay for the month of December 1998 in its Position Paper. Skippers sought the repatriation expenses to be offset with the home

allotment pay. However, since De Gracia, et al.’s dismissal was illegal, their repatriation expenses were for the account of Skippers and could not be offset with the home allotment pay. Contrary to the claim of the Labor Arbiter and NLRC that the home allotment pay is in “the nature of extraordinary money where the burden of proof is shifted to the worker who must prove he is entitled to such monetary benefit,” Section 8 of POEA Memorandum Circular No. 55, series of 1996, states that the allotment actually constitutes at least eighty percent (80%) of the seafarer’s salary: The seafarer is required to make an allotment which is payable once a month to his designated allottee in the Philippines through any authorized Philippine bank. The master/employer/agency shall provide the seafarer with facilities to do so at no expense to the seafarer. The allotment shall be at least eighty percent (80%) of the seafarer’s monthly basic salary including backwages, if any. (Emphasis supplied) Same; Same; Migrant Workers Act; The Migrant Workers Act provides that salaries for the unexpired portion of the employment contract or three (3) months for every year of the unexpired term, whichever is less, shall be awarded to the overseas Filipino worker, in cases of illegal dismissal. However, in 24 March 2009, Serrano v. Gallant Maritime Services and Marlow Navigation Co. Inc., the Court, in an En Banc Decision, declared unconstitutional the clause “or for three months for every year of the unexpired term, whichever is less” and awarded the entire unexpired portion of the employment contract to the overseas Filipino worker.—Section 10 of Republic Act No. 8042 (Migrant Workers Act) provides for money claims in cases of unjust termination of employment contracts: In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. The Migrant Workers Act provides that salaries for the unexpired portion of the employent contract or three (3) months for every year of the unexpired term, whichever is less, shall be awarded to the overseas Filipino worker, in cases of illegal dismissal. However, in 24 March 2009, Serrano v. Gallant Maritime Services and Marlow Navigation Co., Inc., 582 SCRA 254 (2009), the Court, in an En Banc Decision, declared unconstitutional the clause “or for three months for every year of the unexpired term, whichever is

less” and awarded the entire unexpired portion of the employment contract to the overseas Filipino worker. Same; Same; Same; On 8 March 2010, Section 7 of Republic Act No. 10022 (RA 10022) amended Section 10 of the Migrant Workers Act, and once again reiterated the provision of awarding the unexpired portion of the employment contract or three (3) months for every year of the unexpired term, whichever is less.—On 8 March 2010, however, Section 7 of Republic Act No. 10022 (RA 10022) amended Section 10 of the Migrant Workers Act, and once again reiterated the provision of awarding the unexpired portion of the employent contract or three (3) months for every year of the unexpired term, whichever is less. Nevertheless, since the termination occurred on January 1999 before the passage of the amendatory RA 10022, we shall apply RA 8042, as unamended, without touching on the constitutionality of Section 7 of RA 10022. The declaration in March 2009 of the unconstitutionality of the clause “or for three months for every year of the unexpired term, whichever is less” in RA 8042 shall be given retroactive effect to the termination that occurred in January 1999 because an unconstitutional clause in the law confers no rights, imposes no duties and affords no protection. The unconstitutional provision is inoperative, as if it was not passed into law at all. Same; Damages; Moral Damages; Instances where Moral Damages may be Recovered.—Article 2219 of the Civil Code of the Philippines provides for recovery of moral damages in certain cases: Art. 2219. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9) Acts mentioned in Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover moral damages. The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this article, in the order named. Same; Same; Exemplary Damages; Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or

compensatory damages.—Article 2229 of the Civil Code, on the other hand, provides for recovery of exemplary damages: Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages. Same; Same; Attorney’s Fees; Article 111 of the Labor Code provides for a maximum award of attorney’s fees in cases of recovery of wages.—Article 2208 of the Civil Code provides for recovery of attorney’s fees and expenses of litigation: Art. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered, except: (1) When exemplary damages are awarded; (2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; (3) In criminal cases of malicious prosecution against the plaintiff; (4) In case of a clearly unfounded civil action or proceeding against the plaintiff; (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim; (6) In actions for legal support; (7) In actions for the recovery of wages of household helpers, laborers and skilled workers; (8) In actions for indemnity under workmen’s compensation and employer’s liability laws; (9) In a separate civil action to recover civil liability arising from a crime; (10) When at least double judicial costs are awarded; (11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered. In all cases, the attorney’s fees and expenses of litigation must be reasonable. Article 111 of the Labor Code provides for a maximum award of attorney’s fees in cases of recovery of wages: Art. 111. Attorney’s fees. a. In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered. b. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered. B. G.R. No. 177167 January 17, 2013 NELSON B. GAN, vs. GALDERMA PHILIPPINES, INC. and ROSENDO C. VENERACION. Remedial Law; Civil Procedure; Appeals; Settled is the rule that factual findings of labor officials, who are deemed to have acquired

expertise in matters within their jurisdiction, are generally accorded not only with respect but even finality by the courts when supported by substantial evidence, i.e., such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.—Settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only with respect but even finality by the courts when supported by substantial evidence, i.e., such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Likewise, factual findings arrived at by a trier of facts, who is uniquely positioned to observe the demeanor of the witnesses appearing before him and is most competent in judging the credibility of the contending parties, are accorded great weight and certitude. Same; Same; Courts; Appeals; Petition for Review on Certiorari; The jurisdiction of the Supreme Court in cases brought before it from the Court of Appeals via Rule 45 is generally limited to reviewing errors of law or jurisdiction; Exceptions.—The jurisdiction of this Court in cases brought before it from the CA via Rule 45 is generally limited to reviewing errors of law or jurisdiction. In the exercise of its power of review, the findings of fact of the CA are conclusive and binding. The reason is that this Court does not entertain factual issues. It is not our function to analyze or weigh evidence all over again as the evaluation of facts is best left to the trial or administrative agencies/quasi-judicial bodies and appellate court which are better equipped for the task. Admittedly, the above rule is not ironclad. There are instances in which factual issues may be resolved by this Court, to wit: (1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the inference made is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of Appeals goes beyond the issues of the case, and its findings are contrary to the admissions of both appellant and appellees; (7) the findings of fact of the CA are contrary to those of the trial court (in this case, the Labor Arbiter and NLRC); (8) said findings of fact are conclusions without citation of specific evidence on which they are based; (9) the facts set forth in the petition, as well as in the petitioner’s main and reply briefs, are not disputed by the respondent; and (10) the findings of fact of the CA are premised on the supposed absence of evidence and contradicted by the evidence on record.

Labor Law; Termination of Employment; Constructive Dismissal; Words and Phrases; Constructive dismissal is defined as quitting or cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay and other benefits.—To begin with, constructive dismissal is defined as quitting or cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay and other benefits. It exists if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. There is involuntary resignation due to the harsh, hostile, and unfavorable conditions set by the employer. The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his employment/position under the circumstances. Same; Same; Resignation; Words and Phrases; Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment.—“[R]esignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged resignation must be considered in determining whether he or she, in fact, intended to sever his or her employment.” Same; Same; Same; Coercion; Coercion exists when there is a reasonable or well-grounded fear of an imminent evil upon a person or his property or upon the person or property of his spouse, descendants or ascendants.—Since Gan submitted a resignation letter, it is incumbent upon him to prove with clear, positive, and convincing evidence that his resignation was not voluntary but was actually a case of constructive dismissal; that it is a product of coercion or intimidation. He has to prove his allegations with particularity. Gan could not have been coerced. Coercion exists when there is a reasonable

or well-grounded fear of an imminent evil upon a person or his property or upon the person or property of his spouse, descendants or ascendants. Neither do the facts of this case disclose that Gan was intimidated. In St. Michael Academy v. NLRC, 292 SCRA 478 (1998), We enumerated the requisites for intimidation to vitiate one’s consent, thus: x x x (1) that the intimidation caused the consent to be given; (2) that the threatened act be unjust or unlawful; (3) that the threat be real or serious, there being evident disproportion between the evil and the resistance which all men can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil; and (4) that it produces a well-grounded fear from the fact that the person from whom it comes has the necessary means or ability to inflict the threatened injury to his person or property. C. G.R. No. 174300. December 5, 2012.* D. MINDANAO TERMINAL AND BROKERAGE SERVICE, INC. et al vs. NAGKAHIUSANG MAMUMUO SA MINTERBRO–SOUTHERN PHILIPPINES FEDERATION OF LABOR et al.

Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; Only questions of law should be raised in a petition for review under Rule 45.―In this case, this Court is effectively being called upon to determine who among the parties is asserting the truth regarding the date the union members were laid-off. Such venture requires the evaluation of the respective pieces of evidence presented by the parties as well as the consideration of “the existence and relevancy of specific surrounding circumstances as well as their relation to each other and to the whole, and the probability of the situation.” However, the nature of petitioners’ action, a petition for review under Rule 45 of the Rules of Court, renders that very action inappropriate for this Court to take. Only questions of law should be raised in a petition for review under Rule 45. While there are recognized exceptions to that rule, this case is not among them. Labor Law; Termination of Employment; Lay-Offs; Retrenchment; A lay-off, used interchangeably with “retrenchment,” is a recognized prerogative of management. It is the termination of employment resorted to by the employer, through no fault of nor with prejudice to the employees, during periods of business recession, industrial depression, seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials,

conversion of the plant for a new production program, or the introduction of new methods or more efficient machinery, or of automation.―In sum, petitioners’ inaction on what they allege to be the unexplained abandonment by Del Monte of its obligations under the Contract for the Use of Pier coupled with petitioners’ belated action on the damaged condition of the pier caused the absence of available work for the union members. As petitioners were responsible for the lack of work at the pier and, consequently, the layoff of the union members, they are liable for the separation from employment of the union members on a ground similar to retrenchment. In this connection, this Court has ruled: A lay-off, used interchangeably with “retrenchment,” is a recognized prerogative of management. It is the termination of employment resorted to by the employer, through no fault of nor with prejudice to the employees, during periods of business recession, industrial depression, seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program, or the introduction of new methods or more efficient machinery, or of automation. Simply put, it is an act of the employer of dismissing employees because of losses in operation of a business, lack of work, and considerable reduction on the volume of his business, a right consistently recognized and affirmed by this Court. The requisites of a valid retrenchment are covered by Article 283 of the Labor Code. When a lay-off is temporary, the employment status of the employee is not deemed terminated, but merely suspended. Article 286 of the Labor Code provides, in part, that the bona fide suspension of the operation of the business or undertaking for a period not exceeding six months does not terminate employment. Same; Same; Constructive Dismissal; Under Article 286 of the Labor Code, the bona fide suspension of the operation of a business or undertaking for a period not exceeding six months shall not terminate employment. Consequently, when the bona fide suspension of the operation of a business or undertaking exceeds six months, then the employment of the employee shall be deemed terminated.―When petitioners failed to make work available to the union members for a period of more than six months starting April 14, 1997 by failing to call the attention of Del Monte on the latter’s obligations under the Contract of Use of Pier and to undertake a timely rehabilitation of the pier, they are deemed to have constructively dismissed the union members. As this Court held in Valdez v. National Labor Relations Commission, 286 SCRA 87 (1998): Under Article 286 of the Labor Code, the bona fide suspension of the operation of a

business or undertaking for a period not exceeding six months shall not terminate employment. Consequently, when the bona fide suspension of the operation of a business or undertaking exceeds six months, then the employment of the employee shall be deemed terminated. By the same token and applying said rule by analogy, if the employee was forced to remain without work or assignment for a period exceeding six months, then he is in effect constructively dismissed. Same; Same; Lay-Offs; Retrenchment; Lay-off is essentially retrenchment and under Article 283 of the Labor Code a retrenched employee is entitled to separation pay equivalent to one (1) month salary or one-half (12) month salary per year of service, whichever is higher.―As the Court of Appeals did not err in ruling that Sebuguero applies to this case, the consequences arrived at in Sebuguero also apply. Lay-off is essentially retrenchment and under Article 283 of the Labor Code a retrenched employee is entitled to separation pay equivalent to one (1) month salary or one-half (12) month salary per year of service, whichever is higher. E. G.R. No. 113592 January 15, 1998 INDUSTRIAL AND TRANSPORT EQUIPMENT, INC. and/or ANTONIO JARINA, vs. NATIONAL LABOR RELATIONS COMMISSION and LEOPOLDO MEDRANO Labor Law; Judgment; Contempt; The New Rules of Procedure of the NLRC provides that the Commission or any labor arbiter may cite any person for indirect contempt upon grounds and in the manner prescribed under Section 3(b), Rule 71 of the 1997 Rules of Civil Procedure.—Section 2, Rule X of the New Rules of Procedure of the NLRC provides that the Commission or any labor arbiter may cite any person for indirect contempt upon grounds and in the manner prescribed under Section 3(b), Rule 71 of the 1997 Rules of Civil Procedure. Section 3(b), Rule 71 provides: “Section 3—Indirect contempt to be punished after charge and hearing—x x x a) x x x x x x x x x b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court x x x.” Same; Same; Same; Contempt Defined; There is no question that disobedience or resistance to a lawful writ, process, order, judgment or command of a court or injunction granted by a court or judge constitutes indirect contempt punishable under Rule 71

of the Rules of Court.—Contempt is defined as a disobedience to the Court by setting up an opposition to its authority, justice and dignity. It signifies not only a willful disregard or disobedience of the court’s orders but such conduct as tends to bring the authority of the court and the administration of law into disrepute or in some manner to impede the due administration of justice. There is no question that disobedience or resistance to a lawful writ, process, order, judgment or command of a court or injunction granted by a court or judge constitutes indirect contempt punishable under Rule 71 of the Rules of Court. Same; Same; The labor arbiter erred in omitting the award of backwages.—Notably, the March 27, 1991 decision of the labor arbiter, while ordering the reinstatement of respondent, excluded the award of backwages. On this point, we rule that the labor arbiter erred in omitting such award. The law provides that an illegall dismissed employee is “entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.” Having become final and executory, however, we are constrained to uphold this decision, albeit deficient, for failure of the respondent himself to question the inadequacy of the remedy due him. Same; Same; Except for correction of clerical errors or the making of nunc pro tunc entries which cause no prejudice to any party or where the judgment is void, after the judgment has become final and executory, the same can neither be amended nor altered even if the purpose is to correct a perceived conclusion of fact or of law.—In Asuncion v. NLRC, the Court ruled that perfection of an appeal within the statutory or reglementary period is not only mandatory but also jurisdictional and failure to do so renders the questioned decision final and executory as to deprive the appellate court of jurisdiction to alter the final judgment, much less to entertain the appeal. In the recently decided case of Aboitiz Shipping Employees Association v. Trajano, it was pointed out therein that, except for correction of clerical errors or the making of nunc pro tunc entries which cause no prejudice to any party or where the judgment is void, after the judgment has become final and executory, the same can neither be amended nor altered even if the purpose is to correct a perceived conclusion of fact or of law. This is true regardless of whether the modification is to be

made by the magistrate that rendered the judgment, or by the appellate magistrate that reviewed the same. Indeed, all litigation must come to an end however unjust the result of error may appear. Otherwise, litigation would even be more intolerable than the wrong or injustice it is designed to correct. Industrial and Transport Equipment, Inc. vs. NLRC, 284 SCRA 144, G.R. No. 113592 January 15, 1998 F. G.R. No. 172013 October 2, 2009 PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA. TERESITA P. SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE A. CABALQUINTO, LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA, NOEMI R. CRESENCIO, and other flight attendants of PHILIPPINE AIRLINES, vs. PHILIPPINE AIRLINES, INCORPORATED. Actions; Jurisdiction; Labor Law; Pleadings and Practice; Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief.— Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief. In the case at bar, the allegations in the petition for declaratory relief plainly show that petitioners’ cause of action is the annulment of Section 144, Part A of the PAL-FASAP CBA. Same; Same; Same; Collective Bargaining Agreements; An action raising the issue as to whether a provision of the Collective Bargaining Agreement is unlawful and unconstitutional is beyond the jurisdiction of labor tribunals; The jurisdiction of labor arbiters and the National Labor Relations Commission (NLRC) under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement.—From the petitioners’ allegations and relief prayed for in its petition, it is clear that the issue raised is whether Section 144, Part A of the PAL-FASAP CBA is unlawful and unconstitutional. Here, the petitioners’ primary relief in Civil Case No. 04-886 is the annulment of Section 144, Part A of the PAL-FASAP CBA, which allegedly discriminates against them for being female flight attendants. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Section 19

(1) of Batas Pambansa Blg. 129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women, and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani, 235 SCRA 217 (1994), this Court held that not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasijudicial powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement. Same; Same; Same; Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court.—Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. Here, the employer-employee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW. Same; Same; Same; Voluntary Arbitrators; Grievance machinery and voluntary arbitrators do not have jurisdiction and competence to decide constitutional issues relative to the allegedly discriminatory compulsory retirement age.—If We divest the regular courts of jurisdiction over the case, then which tribunal or forum shall determine the constitutionality or legality of the assailed CBA provision? This Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement

age. Their exercise of jurisdiction is futile, as it is like vesting power to someone who cannot wield it. Same; Same; Same; It does not necessarily follow that a resolution of a controversy that would bring about a change in the terms and conditions of employment is a labor dispute, cognizable by labor tribunals.—The change in the terms and conditions of employment, should Section 144 of the CBA be held invalid, is but a necessary and unavoidable consequence of the principal relief sought, i.e., nullification of the alleged discriminatory provision in the CBA. Thus, it does not necessarily follow that a resolution of controversy that would bring about a change in the terms and conditions of employment is a labor dispute, cognizable by labor tribunals. It is unfair to preclude petitioners from invoking the trial court’s jurisdiction merely because it may eventually result into a change of the terms and conditions of employment. Along that line, the trial court is not asked to set and fix the terms and conditions of employment, but is called upon to determine whether CBA is consistent with the laws. Same; Same; Same; Collective Bargaining Agreements; Even if the Collective Bargaining Agreement (CBA) provides for a procedure for the adjustment of grievances, such referral to the grievance machinery and thereafter to voluntary arbitration would be inappropriate to the complaining employees where the union and the management have unanimously agreed to the terms of the CBA and their interest is unified.—Although the CBA provides for a procedure for the adjustment of grievances, such referral to the grievance machinery and thereafter to voluntary arbitration would be inappropriate to the petitioners, because the union and the management have unanimously agreed to the terms of the CBA and their interest is unified. In Pantranco North Express, Inc., v. NLRC, 259 SCRA 161 (1996), this Court held that: x x x Hence, only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators. In the instant case, both the union and the company are united or have come to an agreement regarding the dismissal of private respondents. No grievance between them exists which could be brought to a grievance machinery. The problem or dispute in the present case is between the union and the company on the one hand and some union and non-union members who were dismissed, on the other hand. The dispute has to be settled before an impartial body. The grievance machinery with members designated by the union and the company cannot be expected to be impartial against

the dismissed employees. Due process demands that the dismissed workers’ grievances be ventilated before an impartial body. x x x. Same; Same; Same; Words and Phrases; Interpretation, as defined in Black’s Law Dictionary, is the art of or process of discovering and ascertaining the meaning of a statute, will, contract, or other written document.—The trial court in this case is not asked to interpret Section 144, Part A of the PAL-FASAP CBA. Interpretation, as defined in Black’s Law Dictionary, is the art of or process of discovering and ascertaining the meaning of a statute, will, contract, or other written document. The provision regarding the compulsory retirement of flight attendants is not ambiguous and does not require interpretation. Neither is there any question regarding the implementation of the subject CBA provision, because the manner of implementing the same is clear in itself. The only controversy lies in its intrinsic validity. Same; Same; Same; Contracts; Doctrine of Party Autonomy; Counter-balancing the principle of autonomy of contracting parties is the equally general rule that provisions of applicable law, especially provisions relating to matters affected with public policy, are deemed written into the contract—the governing principle is that parties may not contract away applicable provisions of law especially peremptory provisions dealing with matters heavily impressed with public interest.—Although it is a rule that a contract freely entered between the parties should be respected, since a contract is the law between the parties, said rule is not absolute. In Pakistan International Airlines Corporation v. Ople, 190 SCRA 90 (1990), this Court held that: The principle of party autonomy in contracts is not, however, an absolute principle. The rule in Article 1306, of our Civil Code is that the contracting parties may establish such stipulations as they may deem convenient, “provided they are not contrary to law, morals, good customs, public order or public policy.” Thus, counterbalancing the principle of autonomy of contracting parties is the equally general rule that provisions of applicable law, especially provisions relating to matters affected with public policy, are deemed written into the contract. Put a little differently, the governing principle is that parties may not contract away applicable provisions of law especially peremptory provisions dealing with matters heavily impressed with public interest. The law relating to labor and employment is clearly such an area and parties are not at liberty to insulate themselves and

their relationships from the impact of labor laws and regulations by simply contracting with each other. Same; Same; Same; Same; The relations between capital and labor are not merely contractual—they are so impressed with public interest that labor contracts must yield to the common good.—The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. x x x The supremacy of the law over contracts is explained by the fact that labor contracts are not ordinary contracts; these are imbued with public interest and therefore are subject to the police power of the state. It should not be taken to mean that retirement provisions agreed upon in the CBA are absolutely beyond the ambit of judicial review and nullification. A CBA, as a labor contract, is not merely contractual in nature but impressed with public interest. If the retirement provisions in the CBA run contrary to law, public morals, or public policy, such provisions may very well be voided. Same; Same; Same; The question as to whether a provision of a Collective Bargaining Agreement is discriminatory or not is a question of fact which would require the presentation and reception of evidence by the parties in order for the trial court to ascertain the facts of the case and whether said provision violates the Constitution, statutes and treaties.—The rule is settled that pure questions of fact may not be the proper subject of an appeal by certiorari under Rule 45 of the Revised Rules of Court. This mode of appeal is generally limited only to questions of law which must be distinctly set forth in the petition. The Supreme Court is not a trier of facts. The question as to whether said Section 114, Part A of the PALFASAP CBA is discriminatory or not is a question of fact. This would require the presentation and reception of evidence by the parties in order for the trial court to ascertain the facts of the case and whether said provision violates the Constitution, statutes and treaties. A fullblown trial is necessary, which jurisdiction to hear the same is properly lodged with the the RTC. Therefore, a remand of this case to the RTC for the proper determination of the merits of the petition for declaratory relief is just and proper. Halagueña vs. Philippine Airlines, Incorporated, 602 SCRA 297, G.R. No. 172013 October 2, 2009 G.