Filipinas Palmoil Processing, Inc. and Dennis T. Villareal v. Joel P. Dejapa G.R. No.

167332, February 7, 2011 FACTS: Respondent Joey Dejapa filed a Complaint for illegal dismissal and money claims against petitioner Filipinas Palmoil Processing, Inc., Dennis T. Villareal and Tom Madula. The LA dismissed respondent's complaint for lack of merit. Respondent filed his appeal with the NLRC which affirmed the LA decision. Respondent's motion for reconsideration was denied. Aggrieved, respondent filed with the CA a petition for certiorari. Petitioners filed their Comment thereto. On August 29, 2002, the CA reversed and set aside the NLRC decision and resolution. The CA found that petitioner company was respondent's employer and that Tom Madula was not really an independent contractor, but petitioner company's Operations Manager. It ruled that respondent was illegally dismissed by petitioner company. The decision became final and executory on February 27, 2004, and an entry of judgment was subsequently made. The LA issued a Writ of Execution for the implementation of the CA Decision. Pursuant to the said writ of execution, petitioners' deposit in the UCPB in the amount of P736,910.10 was garnished. Petitioners filed a Motion to Quash Writ of Execution on the ground that it can be held liable only insofar as the reinstatement aspect and/or the monetary award were concerned, pursuant to the CA Decision, but not to backwages. The LA issued its Order partially granting petitioners' Motion to Quash Writ of Execution. Respondent then filed before the CA a Very Urgent Motion for Clarification of Judgment, praying that the CA Decision dated August 29, 2002 be clarified to the effect that petitioner be made solely liable to the judgment award and, as a consequence thereof, to order the NLRC and the LA to implement the same and to direct the UCPB to release the garnished amount of P736,910.10 to the NLRC Sheriff and for the latter to deposit the same to the NLRC cashier for further disposition. The CA rendered the assailed Resolution granting respondent's motion for clarificatory judgment. ISSUE: Whether the CA decision which became final and executory may be altered. HELD: NO. As a general rule, final and executory judgments are immutable and unalterable, except under these recognized exceptions, to wit: (a) clerical errors; (b) nunc pro tunc entries which cause no prejudice to any party; and (c) void judgments. What the CA rendered on December 10, 2004 was a nunc pro tunc order clarifying the decretal portion of the August 29, 2002 Decision. The underlying reason for the rule is two-fold: (1) to avoid delay in the administration of justice and thus make orderly the discharge of judicial business, and (2) to put judicial controversies to an end, at the risk of occasional errors, inasmuch as controversies cannot be allowed to drag on indefinitely and the rights and obligations of every litigant must not hang in suspense for an indefinite period of time. The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and determination of new rights, but is one placing in proper form on the record, the judgment that had been previously rendered, to make it speak the truth, so as to make it show what the judicial action really was, not to correct judicial errors, such as to render a judgment which the court ought to have rendered, in place of the one it did erroneously render, nor to supply nonaction by the court, however erroneous the judgment may have been. Petitioners' action is merely a subterfuge to alter or modify the

final and executory Decision of the CA which we cannot countenance without violating procedural rules and jurisprudence. International Management Services vs. Logarta G.r. No. 163657 April 18, 2012 FACTS: Recruitment agency, International Management Services (IMS), owned and operated by Marilyn C. Pascual, deployed respondent Roel P. Logarta to work for Petrocon Arabia Limited (Petrocon) in Alkhobar, Kingdom of Saudi Arabia, in connection with general engineering services of Petrocon for the Saudi Arabian Oil Company (Saudi Aramco). Respondent was employed for a period of two (2) years, commencing on October 2, 1997, with a monthly salary of eight hundred US Dollars (US$800.00). On April 29, 1998, Saudi Aramco notified Petrocon that due to changes in the general engineering services work forecast for 1998, the man-hours that were formerly allotted to Petrocon is going to be reduced by 40% which constrained Petrocon to reduce its personnel. Thus, on June 1, 1998, Petrocon gave respondent a written notice informing the latter that due to the lack of project works related to his expertise, he is given a 30-day notice of termination, and that his last day of work with Petrocon will be on July 1, 1998. Petrocon also informed respondent that all due benefits in accordance with the terms and conditions of his employment contract will be paid to respondent, including his ticket back to the Philippines. Before his departure from Saudi Arabia, respondent received his final paycheck from Petrocon amounting SR7,488.57. Upon his return, respondent filed a complaint with the Regional Arbitration Branch VII, National Labor Relations Commission (NLRC), Cebu City, against petitioner as the recruitment agency which employed him for employment abroad. In filing the complaint, respondent sought to recover his unearned salaries covering the unexpired portion of his employment contract with Petrocon on the ground that he was illegally dismissed. The Labor Arbiter rendered judgment in favor of the respondent and ordered petitioner to pay the peso equivalent of US$5,600.00 based on the rate at the time of actual payment, as payment of his wages for the unexpired portion of his contract of employment. The NLRC on appeal affirmed the Labor Arbiters decision but reduced the award to only US$4,800.00 or its peso equivalent at the time of payment. The CA likewise dismissed the petition and affirmed the NLRC decision. ISSUE: Whether or not respondents dismissal through retrenchment illegal.

SC RULING: No. Retrenchment is the reduction of work personnel usually due to poor financial returns, aimed to cut down costs for operation particularly on salaries and wages. It is one of the economic grounds to dismiss employees and is resorted by an employer primarily to avoid or minimize business losses. Retrenchment programs are purely business decisions within the purview of a valid and reasonable exercise of management prerogative. It is one way of downsizing an employer's workforce and is often resorted to by the employer during periods of business recession, industrial depression, or seasonal fluctuations, and during lulls in production occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program, or introduction of new methods or more efficient machinery or automation. It is a valid management prerogative, provided it is done in good faith and the

employer faithfully complies with the substantive and procedural requirements laid down by law and jurisprudence. Philippine Law recognizes retrenchment as a valid cause for the dismissal of a migrant or overseas Filipino worker under Article 283 of the Labor Code. Thus, retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence, to wit: (1)That the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2)That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3)That the employer pays the retrenched employees separation pay equivalent to one month pay or at least 1/2 month pay for every year of service, whichever is higher; (4)That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees' right to security of tenure; and (5)That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status,efficiency, seniority, physical fitness, age, and financial hardship for certain workers. Applying the above-stated requisites for a valid retrenchment in the case at bar, it is apparent that the first, fourth and fifth requirements were complied with by respondent's employer. However, the second and third requisites were absent when Petrocon terminated the services of respondent. As aptly found by the NLRC and justly sustained by the CA, Petrocon exercised its prerogative to retrench its employees in good faith and the considerable reduction of work allotments of Petrocon by Saudi Aramco was sufficient basis for Petrocon to reduce the number of its personnel. As for the notice requirement, however, contrary to petitioner's contention, proper notice to the DOLE within 30 days prior to the intended date of retrenchment is necessary and must be complied with despite the fact that respondent is an overseas Filipino worker. In the present case, although respondent was duly notified of his termination by Petrocon 30 days before its effectivity, no allegation or proof was advanced by petitioner to establish that Petrocon ever sent a notice to the DOLE 30 days before the respondent was terminated. Thus, this requirement of the law was not complied with. In the case at bar, despite the fact that respondent was employed by Petrocon as an OFW in Saudi Arabia, still both he and his employer are subject to the provisions of the Labor Code when applicable. The basic policy in this jurisdiction is that all Filipino workers, whether employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislations. Also, respondent is entitled to the payment of his separation pay. However, this Court disagrees with the conclusion of the Labor Arbiter, the NLRC and the CA, that respondent should be paid his separation pay in accordance with the provision of Section 10 of R.A. No. 8042. A plain reading of the said provision clearly reveals that it applies only to an illegally dismissed overseas contract worker or a worker dismissed from overseas employment without just, valid or authorized cause. In the case at bar, notwithstanding the fact that respondent's termination from his employment was procedurally infirm, having not complied with the notice requirement, nevertheless the same remains to be for a just, valid and authorized cause, i.e., retrenchment as a valid exercise of management prerogative. To stress, despite the employer's failure to comply with the one-month notice to the DOLE prior to respondent's termination, it is only a procedural infirmity which does not render the retrenchment illegal. In Agabon v. NLRC, this Court ruled that when the dismissal is for a just cause,

the absence of proper notice should not nullify the dismissal or render it illegal or ineffectual. Instead, the employer should indemnify the employee for violation of his statutory rights. Consequently, it is Article 283 of the Labor Code and not Section 10 of R.A. No. 8042 that is controlling. Thus, respondent is entitled to payment of separation pay equivalent to one (1) month pay, or at least one-half (1/2) month pay for every year of service, whichever is higher. Considering that respondent was employed by Petrocon for a period of eight (8) months, he is entitled to receive one (1) month pay as separation pay. In addition, pursuant to current jurisprudence, for failure to fully comply with the statutory due process of sufficient notice, respondent is entitled to nominal damages in the amount P50,000.00. Magsaysay Maritime Corporation vs. Oberto Lobusta G.R. No. 177578 January 25, 2012 FACTS: Respondent Lobusta was hired by the petitioner as a seaman since 1994. Sometime during his employment the respondent complained of breathing difficulty and back pain. He was admitted to a hospital and was diagnosed to be suffering from severe acute bronchial asthma with secondary infection and lumbosacral muscle strain. Respondent was examined by another doctor and said that he needs a surgery, called decompression laminectomy, which was done. The doctor also issued another medical report stating that Lobustas obstructive airway disease needs to be monitored regularly and needs to be on bronchodilator indefinitely. The suggestion was not heeded and Lobusta's treatment continued. The respondent attended several check-ups and was diagnosed to have a moderate obstructive pulmonary disease which tends to be a chronic problem. The parties, to confirm the real condition, asked another doctor to reexamined the respondent and said that the respondent is not physically fit to resume his normal work as a seaman due to the persistence of his symptoms; that his asthma will remain chronically active and will be marked by intermittent exacerbations; and that he needs multiple controller medications for his asthma. After the parties failed to settle how much is entitled to the respondent. The petitioner, again, suggested that Lobusta be examined by another companydesignated doctor for an independent medical examination. The parties agreed that it would be considered final. However, the doctor said that we cant be considered fit to return to work as a seaman. As no settlement was reached despite the above findings, the Labor Arbiter ordered the parties to file their respective position papers. The Labor Artbiter rendered a decision in favor of the respondent and considered his condition as permanent partial disability since Labor Code on permanent total disability do not apply to overseas seafarers, which the NLRC affirmed. However, the CA ruled that Lobusta's disability brought about by his bronchial asthma is permanent and total disability. ISSUE: Whether or not the respondents illness is considered as total and permanent disability RULING: The illness is a total and permanent disability Article 192(c)(1) under Title II, Book IV of the Labor Code, as amended, reads: ART. 192. Permanent total disability. x x x xxxx (c) The following disabilities shall be deemed total and permanent: (1) Temporary total disability lasting continuously for more than one hundred twenty days, except as otherwise provided in the Rules; xxxx

In this case, the respondent was unable to work for more than 120 days (May 22, 1998 to December 16, 1999 which is 19 months or 570 days) as prescribed by law, hence it should be considered as a permanent and total disability defined under the Labor Code. Moreover, the Court held in the case of Remigio v. National Labor Relations Commission that unfitness to work for 11-13 months was considered permanent total disability. Wherefore, the Court denied the petition. St. Paul College, Quezon City vs. Ancheta II G.R. No. 169905 September 7, 2011 FACTS: Petitioner St. Paul College, Quezon City (SPCQC) is a private Catholic educational institution. It is represented by its President, petitioner Sr. Lilia Therese Tolentino, SPC, the College Dean, Sr. Bernadette Racadio, SPC, and the Mass Communication Program Director, Sr. Sarah Manapol, SPC. The respondents, Spouses Remigio Michael A. Ancheta II and Cynthia A. Ancheta are former teachers of the same school. Respondent Remigio Michael was hired by the SPCQC as a teacher in the General Education Department with a probationary rank in the School Year (SY) 1996-1997 which was renewed in the following SY 19971998. His wife, respondent Cynthia was hired by the same school as a part time teacher of the Mass Communication Department in the second semester of SY 1996-1997 and her appointment was renewed for SY 1997-1998. On February 13, 1998, respondent Remigio Michael wrote a letter to petitioner Sr. Lilia, signifying his intention to renew his contract with SPCQC for SY 1998-1999. A letter of the same tenor was also written by respondent Cynthia addressed to petitioner Sr. Lilia. Petitioner Sr. Bernadette, on March 9, 1998, sent two letters with the same contents to the respondent spouses informing them that upon the recommendation of the College Council, the school is extending to them new contracts for SY 1998-1999. A letter dated April 22, 1998 was sent to petitioner Sr. Bernadette and signed by some of the teachers of SPCQC, including the respondent spouses. The said letter contained the teachers' sentiments regarding two school policies, namely: first, the policy of penalizing the delay in encoding final grades and, second, the policy of withholding salaries of the teachers. Meanwhile, a letter dated April 21, 1998 (the date, later on contested by respondent Remigio Michael to be ante-dated) was written by petitioner Sr. Bernadette to respondent Remigio Michael, reiterating the conversation that took place between them the day before the date of the said letter (April 20, 1998). The letter enumerated the departmental and instructional policies that respondent Remigio Michael failed to comply with, such as the late submission of final grades, failure to submit final test questions to the Program Coordinator, the giving of tests in the essay form instead of the multiple choice format as mandated by the school and the high number of students with failing grades in the classes that he handled. Thereafter, petitioner Sr. Bernadette wrote a letter dated April 30, 1998 to petitioner Sr. Lilia, endorsing the immediate termination of the teaching services of the respondent spouses on the following grounds: 1. Non-compliance with the departmental policy to submit their final test questions to their respective program coordinators for checking/comments (violating par. 7.1, p. 65 of the Faculty Manual). 2. Non-compliance with the standard format (multiple choice) of final test questions as agreed upon in the department. Mr. Ancheta prepared purely essay questions for the students. 3. Failure to encode their modular grade reports as required (violating par. H. 8, p. 66 of our Faculty manual).

4. Failure to submit and update required modules (syllabi) of their subject despite reminders (violating D, 1.5, p. 40 of our Faculty Manual). 5. Both spouses have a gross number of failure in their class 6. Failure to report to work on time <re: Mr. Ancheta> (violating par. 1, 21, p. 63 of our Faculty Manual). 7. Both spouses are not open to suggestions to improve themselves as teachers. They just see their points and their principles. When I talked to Mr. Ancheta the second time telling him of the data I gathered, including the information that statistics permits only 1 to 2% failures, he still refused to budge in to review his grades and his quality of teaching. He stood firm in his conviction and ground that the students were to blame for their failures, and reiterated his disagreement with several school policies (which he violated) contained in his letter which he had asked his wife to give to the dean's office. Not content on writing down his personal disagreement on some policies, he also asked some faculty members to read his letter and put their signatures on it if they were in favor of one or all of his points. In other words, said spouses had refused and continue to refuse to evaluate the students' performance on the bases of an established grading system to ensure just and fair appraisal (violating par. 1.4, p. 40 of our Faculty Manual). Respondent spouses were given an opportunity to comment on the above letter-recommendation of petitioner Sr. Bernadette. On May 4, 1998, respondent spouses sent their respective comments to petitioner Sr. Lilia. Subsequently, the respondent spouses received their respective letters of termination on May 14, 1998. Respondent spouses sent a letter for reconsideration to petitioner Sr. Lilia, but was eventually denied. Thus, respondent spouses filed a Complaint for illegal dismissal with the NLRC. ISSUE: Whether or not the respondent spouses were illegally dismissed. SC RULING: Before this Court delves into the merits of the petition, it deems it necessary to discuss the nature of the employment of the respondents. It is not disputed that respondent Remigio Michael was a full-time probationary employee and his wife, a part-time teacher of the petitioner school. A reality we have to face in the consideration of employment on probationary status of teaching personnel is that they are not governed purely by the Labor Code. The Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools. On the matter of probationary period, Section 92 of these regulations provides: Section 92. Probationary Period. - Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. A probationary employee or probationer is one who is on trial for an employer, during which the latter determines whether or not he is qualified for permanent employment. The probationary employment 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

employer that he has the qualifications to meet the reasonable standards for permanent employment. Thus, the word probationary, as used to describe the period of employment, implies the purpose of the term or period, not its length. The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teacher's performance. If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year since it would be the third school year of probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract. Petitioner school contends that it did not extend the contracts of respondent spouses. It claims that, although, it has sent letters to the spouses informing them that the school is extending to them new contracts for the coming school year, the letters do not constitute as actual employment contracts but merely offers to teach on the said school year. Section 91 of the Manual of Regulations for Private Schools, states that: Section 91. Employment Contract. Every contract of employment shall specify the designation, qualification, salary rate, the period and nature of service and its date of effectivity, and such other terms and condition of employment as may be consistent with laws and rules, regulations and standards of the school. A copy of the contract shall be furnished the personnel concerned. It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period. Therefore, the letters sent by petitioner Sr. Racadio, which were void of any specifics cannot be considered as contracts. The closest they can resemble to are that of informal correspondence among the said individuals. As such, petitioner school has the right not to renew the contracts of the respondents, the old ones having been expired at the end of their terms. Assuming, arguendo, that the employment contracts between the petitioner school and the respondent spouses were renewed, this Court finds that there was a valid and just cause for their dismissal. The Labor Code commands that before an employer may legally dismiss an employee from the service, the requirement of substantial and procedural due process must be complied with. Under the requirement of substantial due process, the grounds for termination of employment must be based on just or authorized causes. Petitioner school charged respondent Remigio Michael of non-compliance with a school policy regarding the submission of final test questions to his program coordinator for checking or comment. The plain admissions of the charges against them were the considerations taken into account by the petitioner school in their decision not to renew the respondent spouses' employment contracts. This is a right of the school that is mandated by law and jurisprudence. It is the prerogative of the school to set high standards of efficiency for its teachers since quality education is a mandate of the Constitution. As long as the standards fixed are reasonable and not arbitrary, courts are not at liberty to set them aside. Schools cannot be required to adopt standards which barely satisfy criteria set for government recognition. The same academic freedom grants the school the autonomy to decide for itself the terms and conditions for hiring its teacher, subject of course to the overarching limitations under the Labor Code. The authority to hire is likewise covered and protected by its management prerogative the right

of an employer to regulate all aspects of employment, such as hiring, the freedom to prescribe work assignments, working methods, process to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers.