LaborRelations

1. Leslie Okol vs. Slimmers World International,

Modifications, Inc., and Ronald Joseph Moy

Behavior

G.R. No. 160146. December 11, 2009.

Facts:
Respondent Slimmers World International operating under the name
Behavior Modifications, Inc. (Slimmers World) employed petitioner Leslie
Okol (Okol) as a management. She rose up the ranks to become Head
Office Manager and then Director and Vice President until her dismissal.

Prior to Okol's dismissal, Slimmers World preventively suspended Okol.

The suspension arose from the seizure by the Bureau of Customs of seven
Precor elliptical machines and seven Precor treadmills belonging to or
consigned to Slimmers World. The shipment of the equipment was placed
under the names of Okol and two customs brokers for a value less than
US$500. For being undervalued, the equipment were seized.

Okol filed her written explanation. However, Slimmers World found Okol's
explanation to be unsatisfactory. Through a letter signed by its president
Moy, Slimmers World terminated Okol's employment.

Okol filed a complaint with the Arbitration branch of the NLRC against
Slimmers World, Behavior Modifications, Inc. and Moy for illegal
suspension, illegal dismissal, unpaid commissions, damages and
attorney's fees.

Petitioner insists that the CA erred in ruling that she was a corporate
officer and that the case is an intra-corporate dispute falling within the
jurisdiction of the regular courts. Petitioner asserts that even as vicepresident, the work that she performed conforms to that of an employee
rather than a corporate officer.

Issue:
Whether or not the NLRC has jurisdiction over the illegal dismissal case filed
by petitioner.
Held:
NO. The charges of illegal suspension, illegal dismissal, unpaid commissions,
reinstatement and back wages imputed by petitioner against respondents
fall squarely within the ambit of intra-corporate disputes.
Before, intra-corporate disputes fall within the jurisdiction of the Securities
and Exchange Commission (SEC). Subsection 5.2, Section 5 of Republic Act
No. 8799, transferred to RTCs the SEC's jurisdiction over all cases listed in
Section 5 of PD 902-A.
The determination of the rights of a director and corporate officer dismissed
from his employment as well as the corresponding liability of a corporation, if
any, is an intra-corporate dispute subject to the jurisdiction of the regular
1 | Page

courts. Thus, the appellate court correctly ruled that it is not the NLRC but
the regular courts which have jurisdiction over the present case.
In the motion, respondents attached the General Information Sheet, Minutes
of the meeting of the Board of Directors and Secretary's Certificate, and the
Amended By-Laws of Slimmers World as submitted to the SEC to show that
petitioner was a corporate officer whose rights do not fall within the NLRC's
jurisdiction. The GIS and minutes of the meeting of the board of directors
indicated that petitioner was a member of the board of directors, holding one
subscribed share of the capital stock, and an elected corporate officer.
The Court ruled that an "office" is created by the charter of the corporation
and the officer is elected by the directors or stockholders. On the other hand,
an "employee" usually occupies no office and generally is employed not by
action of the directors or stockholders but by the managing officer of the
corporation who also determines the compensation to be paid to such
employee.
2. VIRGILIO G. ANABE vs. ASIAN CONSTRUCTION (ASIAKONSTRUKT)
G.R. No. 183233 December 23, 2009
FACTS:
The petitioner was hired by respondent Asian Construction (Asiakonstrukt) as
radio technician/operator . His services were terminated on the ground of
retrenchment. He thus filed a complaint for illegal dismissal and illegal
deduction of his pay.
Because Asiakonstrukt failed to submit financial statements to prove losses,
the Labor Arbiter ruled that petitioner was not validly dismissed.
Respondents are ordered to pay Virgilio Anade his 13th month pay, illegal
deductions and overtime pay
When the case was elevated to the NLRC, Asiakonstrukt submitted the
certified true copies of the Audited Financial Statements from 1998 to 2000,
NLRC modified the Labor Arbiters Decision by holding that petitioner was not
illegally dismissed and reduced the reimbursable amount of illegal
deductions.
Petitioner filed a Motion for Reconsideration but it was denied. He then
appealed to the Court of Appeals which affirmed the decision rendered by
the NLRC.
Hence, this appeal.
ISSUE:
Whether or not the petitioners dismissal on the ground of retrenchment was
justified
RULING:
The SC granted the petition and remanded the case to the NLRC for
recomputation of the monetary award. Retrenchment is the termination of
employment initiated by the employer through no fault of and without
prejudice to the employees. It is resorted to during periods of business
recession and is recognized by Article 283 of the Labor Code

2 | Page

To effect a valid retrenchment, the following elements must be present: (1)

the retrenchment is reasonably necessary and likely to prevent business
losses; (2) the employer serves written notice both to the employee/s
concerned and the Department of Labor and Employment at least a month
before the intended date of retrenchment; (3) the employer pays the
retrenched employee separation pay in an amount prescribed by the Code;
(4) the employer exercises its prerogative to retrench in good faith; and (5)
the employer uses fair and reasonable criteria in ascertaining who would be
retrenched or retained.
In the present case, Asiakonstrukt failed to prove that it was suffering
business losses to warrant a valid retrenchment of its employees and it failed
to submit its audited financial statements within the two years that the case
was pending before the Labor Arbiter. It submitted them only after it received
the adverse judgment of the Labor Arbiter.
On appeal, the NLRC is not precluded from receiving evidence on appeal as
technical rules of evidence are not binding in labor cases. Here, the delay in
the submission of evidence should have been clearly explained and should
adequately prove the employers allegation of the cause for termination but
the employer did not provide any explanation.
Thus, the Labor arbiters decision was affirmed and the dismissal of the
petitioner on account of retrenchment is held unjustified. Petitioner is thus
entitled to the twin reliefs of payment of backwages and other benefits from
the time of his dismissal up to the finality of this Courts Decision, and
reinstatement without loss of seniority rights or, in lieu thereof, payment of
separation pay.

3. HILARIO S. RAMIREZ VS. COURT OF APPEALS

G.R. No. 182626

December 4, 2009

FACTS:
Respondent Mario Valcueba filed a Complaint for illegal dismissal and
nonpayment of wage differential, 13th month pay differential, holiday pay,
premium pay for holidays and rest days, and service incentive leaves with
claims for moral and exemplary damages and attorneys fees, against Hilario
Ramirez. Valcueba claimed that Ramirez hired him as mechanic and was paid
per day from 1999 to 2006. On Feb. 27, 2006, Valcueba was advised not to
return to work unless he would agree to work on a pakyaw basis. On the
other hand, Ramirez contended that Valcueba fails to obey the formers
lawful order when he had an emergency call and requested Valcueba to
report to Calawisan Station to repair a taxi unit of Ramirez since the
mechanic assigned in the said station was absent. Ramirez insisted that he
did not terminate the complainant, it was the latter who abandoned his job
following his absence the following day after the emergency call without any
leave of absence. The Labor Arbiter rendered a decision finding Ramirez not
guilty of illegal dismissal and awarded complainant for 13th month pay and
wage differential for a total of P45, 825.98 and the reinstatement of
complainant. Ramirez filed a memorandum of appeal with urgent motion to
reduce bond before the NLRC. For failure to post a reasonable amount and to
offer meritorious grounds, NLRC dismissed his appeal. He went to the Court
of Appeals. The Court of Appeals dismissed the Petition outright for failure of
Ramirez to properly verify his petition and to state material dates. Hence,
this petition.
3 | Page

ISSUE:
Whether or not Ramirez has complied with the requirements to perfect his
appeal.
HELD:
Under Rule VI of the New Rules of Procedure of NLRC which explicitly
reaffirms the jurisdictional principle in Art. 223 of the Labor Code, appeals
involving monetary awards are perfected only upon compliance with the
following mandatory requisites, namely: (1) payment of the appeal fees; (2)
filing of the memorandum of appeal; and (3) payment of the required cash or
surety bond. The posting of a bond is indispensable to the perfection of an
appeal in cases involving monetary awards from the decision of the labor
arbiter. Clearly, the filing of the bond is not only mandatory but also a
jurisdictional requirement that must be complied with in order to confer
jurisdiction upon the NLRC. Non-compliance with the requirement renders the
decision of the Labor Arbiter final and executory. While the bond may be
reduced upon motion by the employer, this is subject to the conditions that
(1) the motion to reduce the bond shall be based on meritorious grounds;
and (2) a reasonable amount in relation to the monetary award is posted by
the appellant; otherwise, the filing of the motion to reduce bond shall not
stop the running of the period to perfect an appeal. The NLRC was justified in
denying the motion for there was no meritorious grounds offered by the
appellant and the P10, 000.00 bond posted by the latter is not a reasonable
amount in relation to the monetary award of P45, 825.98.
Ramirezs failure to verify and state material dates as required under the
rules warranted the outright dismissal of his petition before the Court of
Appeals. In an actions filed under Rule 65, the petition shall further indicate
the material dates showing when notice of the judgment or final order or
resolution subject thereof was received, when a motion for new trial or
reconsideration, if any, was filed and when notice of the denial thereof was
received. Failure to comply shall be a ground for dismissal.
Hence, the Supreme Court finds no sufficient justification to set aside the
NLRC and Court of Appeals resolutions. Thus, the decision of the Labor
Arbiter is already final and executory and binding upon this Court.

4. CRC AGRICULTURAL TRADING and ROLANDO B. CATINDIG, vs

NATIONAL LABOR RELATIONS COMMISSION and ROBERTO OBIAS,
G.R. No. 177664

December 23, 2009

Facts:
The present petition traces its roots to the complaint for illegal dismissal filed
by the respondent against petitioners CRC Agricultural Trading and its owner,
Rolando B. Catindig (collectively, petitioners), before the Labor Arbiter. In his
Sinumpaang Salaysay, the respondent alleged that the petitioners employed
him as a driver. The respondent worked for the petitioners until he met an
accident, after which the petitioners no longer allowed him to work. After six
years, the petitioners again hired the respondent as a driver and offered him
to stay inside the companys premises.
Sometime in March 2003, the petitioners ordered respondent to have the
alternator of one of its vehicles repaired. The respondent brought the vehicle
to a repair shop and subsequently gave the petitioners two receipts issued
4 | Page

by the repair shop. The latter suspected that the receipts were falsified and
stopped talking to him and giving him work assignments. Petitioners no
longer gave him any salary after that. As a result, the respondent and his
family moved out of the petitioners compound. The respondent claimed that
the petitioners paid him a daily wage of P175.00, but did not give him
service incentive leave, holiday pay, rest day pay, and overtime pay. He also
alleged that the petitioners did not send him a notice of termination.
Issue:
Was respondents dismissal justified?
RULING:
No. To justify the dismissal of an employee for a just cause, the employer
must furnish the worker with two written notices. The first is the notice to
apprise the employee of the particular acts or omissions for which his
dismissal is sought. This may be loosely considered as the charge against the
employee. The second is the notice informing the employee of the
employers decision to dismiss him. This decision, however, must come only
after the employee is given a reasonable period from receipt of the first
notice within which to answer the charge, and ample opportunity to be heard
and defend himself with the assistance of his representative, if he so desires.
The requirement of notice is not a mere technicality, but a requirement of
due process to which every employee is entitled.
The employer clearly failed to comply with the two-notice requirement.
Nothing in the records shows that the company ever sent the employee a
written notice informing him of the ground for which his dismissal was
sought. It does not also appear that the company held a hearing where the
employee was given the opportunity to answer the charges of abandonment.
Neither did the company send a written notice to the employee informing
him that his service had been terminated and the reasons for the termination
of his employment. Under these facts, the respondents dismissal was illegal.
5. ARSENIO S. QUIAMBAO, vs. MANILA ELECTRIC COMPANY
G.R. No. 171023 December 18, 2009
FACTS:
Petitioner was employed as branch teller by respondent Manila Electric
Company-Mandaluyong Office for the handling and processing of payments.
Petitioner has repeatedly
violated the Company Code
of
Employee
Discipline specifically excessive unauthorized absences. Through a Notice of
Dismissal, petitioners employment was terminated effective March 29,
2000.On July 3, 2001, petitioner filed a complaint before the Arbitration
Branch of the NLRC against respondent assailing the legality of his dismissal.
He also claimed that he was denied due process. The Labor Arbiter dismissed
the complaint for a lack of merit. Petitioner appealed to the NLRC which
affirmed the legality of his dismissal due to habitual absenteeism. On appeal
to the Court of Appeals, the CA nullified the NLRCs Decision and reinstated
the Labor Arbiters Decision dismissing the complaint. It ruled that the award
of separation pay is neither justified nor warranted under the circumstances
The Motion for Reconsideration was denied, hence this petition for review on
certiorari.
ISSUE:
5 | Page

Whether or not a validly dismissed employee may be entitled to separation

pay.
RULING:
The Supreme Court DENIED petition for lack of merit. The Labor Arbiter, the
NLRC and the Court of Appeals found that petitioners unauthorized absences
and repeated infractions of company rules on employee discipline manifest
gross and habitual neglect of duty that merited the imposition of the
supreme penalty of dismissal from work. Serious misconduct is said to be a
transgression of some established and definite rule of action, a forbidden act,
a dereliction of duty, willful in character, and indicative of wrong full intent
and not mere error of judgment. Oddly, petitioner never advanced any valid
reason to justify his absences.
Following jurisprudence, it is held that a series of irregularities when put
together may constitute serious misconduct. Hence, the petitioner is not
entitled to separation pay. The liberality of the law can never be extended to
the unworthy and undeserving.
6. INTERNATIONAL SCHOOL MANILA AND/OR BRIAN McCAULEY, vs.
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE) AND
MEMBERS REPRESENTED BY RAQUEL DAVID CHING, PRESIDENT,
EVANGELINE SANTOS, JOSELYN RUCIO AND METHELYN FILLER
G.R. No. 167286
February 5, 2014
Gross inefficiency is a just case since it is closely related to gross neglect
Facts
Complainant Evangeline Santos filed a labor complaint for illegal dismissal
against her employer defendant International School Manila and Brian
McCauley. Previously, complainant was first hired by the School in 1978 as a
full-time Spanish language teacher. After filing for a leave of one academic
year, she agreed to teach the only available Spanish class and four other
classes of Filipino.
Since it was her first time to teach Filipino, the Schools high school
administrators observed the way she conducted her classes. The results of
the observations on her classes were summarized in Classroom Standards
Evaluation Forms accomplished by the designated observers. In accordance
with said forms, Santos was evaluated in the areas of Planning, the Teaching
Act, Climate, Management and Communication.
Subsequently, after making observations, the Assistant Principal completed
his Classroom Standards Evaluation Form. He remarked that the lesson plan
that Santos provided was written with little detail given. Santos was also
noted as needing improvement in the following criteria: (1) uses effective
questioning techniques; (2) is punctual and time efficient; (3) states and
enforces academic and classroom behavior expectations in a positive
manner; and (4) reinforces appropriate behavior. Hill also stated that
Santoss management of the class left much to be desired. Hill added that
[t]he beginning and the end of the class were poorly structured with
students both coming late and leaving early with no apparent expectations
to the contrary. Almost similar remarks were made on the Spanish class of
Santos.
After another observation on the Filipino classes, the new Assistant Principal
noted that Santos needed improvement on certain areas. Thereafter, Santos
6 | Page

was made to undergo a remediation phase of the evaluation process through

a Professional Growth Plan. After the implementation of the plan, there were
noticeable improvements on Santos. However, the positive reviews were
gradually replaced by renewed concerns on her planning. Thus, a written
notice to explain was sent to complainant directing her to explain in writing
why her employment from the School should not be terminated because of
her failure to meet the criteria for improvement set out in her Professional
Growth Plan and her substandard performance as a teacher.
In response, Santos blamed the School for her predicament. She said that,
in the last few years, she had been forced to teach Filipino, a subject which
she had no preparation for. The School allegedly made this happen against
her objections and despite the fact that she had no training in Filipino
linguistics and literature. Santos also asked for clarification on why she was
being asked to explain and the reasons therefor.
Thereafter, a series of conferences were held to clarify matters. Afterwards,
the management rendered a decision terminating her employment.
Held
Defendants were not liable. Termination was valid and legal. In all cases
involving termination of employment, the burden of proving the existence of
the above just causes rests upon the employer. The quantum of proof
required in these cases is substantial evidence, that is, such relevant
evidence that a reasonable mind might accept as adequate to support a
conclusion, even if other equally reasonable minds might conceivably opine
otherwise.
Citing jurisprudence, the concept of gross negligence connotes want or
absence of or failure to exercise slight care or diligence, or the entire
absence of care. It evinces a thoughtless disregard of consequences without
exerting any effort to avoid them. Fraud and willful neglect of duties imply
bad faith of the employee in failing to perform his job, to the detriment of the
employer and the latters business. On the other hand, habitual neglect
implies repeated failure to perform ones duties for a period of time,
depending upon the circumstances.
Further, in dismissing an employee for gross and habitual neglect of duties,
the negligence should not merely be gross, it should also be habitual.
Meanwhile, gross inefficiency, while not stated in the Labor Code, falls within
the purview of other causes analogous to the foregoing. Hence, it is a just
cause to terminate an employee. Citing caselaw, 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 a previous case], this Court ruled that failure to observe
prescribed standards of work, or to fulfill reasonable work assignments due
to inefficiency may constitute just cause for dismissal.
In this case, the actuations of Santos cannot constitute gross and habitual
neglect of her duties. From the very beginning of her tenure as a teacher of
the Filipino language, the recurring problem observed of Santos was that her
lesson plans lacked details and coherent correlation to each other, to the
course, and to the curriculum, which in turn affected how lessons and
instructions were conveyed to the students. After Santos was placed in a
Professional Growth Plan on March 29, 1996, petitioners observed a
noticeable improvement on her part. In his memo dated May 24, 1996, then
7 | Page

Assistant Principal Loy even stated that Santoss improvement was a result
of her positive attitude in approaching her growth plan. Unfortunately,
though, Santos could not sustain this progress. Not long after, the School
administrators were again admonishing Santos for her vague lesson plans
that lacked specifics.
However, based on records, the inadequacies of Santos as a teacher did not
stem from a reckless disregard of the welfare of her students or of the issues
raised by the School regarding her teaching. Far from being tainted with bad
faith, Santoss failings appeared to have resulted from her lack of necessary
skills, in-depth knowledge, and expertise to teach the Filipino language at the
standards required of her by the School. Consequently, defendants
sufficiently proved the charge of gross inefficiency, which warranted the
dismissal of Santos from the School.
As previously held, 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. Further, this is also in in line with
the academic freedom accorded to schools.
Going further, the CBA between ISAE and the School for the years 19921995 also recognized the exclusive right of the School to hire and appoint
qualified faculty subject to such reasonable rules and regulations as it may
prescribe, as well as the right of the School to discipline its faculty and
determine reasonable levels of performance. Section 8 of Appendix A of the
CBA also states that [a]ll faculty members must meet the high standard of
performance expected by the SCHOOL and abide by all its policies,
procedures and contractual terms.
Here, it is not accurate to state that Santos was dismissed by the School for
inefficiency on account of the fact that she was caught only once without a
lesson plan. The documentary evidence submitted by [defendants], the
contents of which we laid down in detail in our statement of facts, pointed to
the numerous instances when Santos failed to observe the prescribed
standards of performance set by the School in several areas of concern, not
the least of which was her lack of adequate planning for her Filipino classes.
Said evidence established that the School administrators informed Santos of
her inadequacies as soon as they became apparent; that they provided
constructive criticism of her planning process and teaching performance; and
that regular conferences were held between Santos and the administrators in
order to address the latters concerns. In view of her slow progress, the
School required her to undergo the remediation phase of the evaluation
process through a Professional Growth Plan. Despite the efforts of the School
administrators, Santos failed to show any substantial improvement in her
planning process. Having failed to exit the remediation process successfully,
the School was left with no choice but to terminate her employment.
Lastly, it must be pointed out that Santos voluntarily agreed to teach the
Filipino classes given to her when she came back from her leave of absence.
Said classes were not forced upon her by the School. This much she admitted
in the hearing of the case before the Labor Arbiter. She stated therein that
for the school year 1993-1994, she was given the option to teach only one
Spanish class and not have any Filipino teaching loads. She, however, said
that if she took that option she would have been underpaid and her salary
would not have been the same. Moreover, for the school years 1994-1995
and 1995-1996, she made known to the School that she did not prefer a
change in teaching assignment. Thus, when she consented to take on the
Filipino classes, it was Santoss responsibility to teach them well within the
8 | Page

standards of teaching required by the School, as she had done previously as

a teacher of Spanish. Failing in this, she must answer for the consequences.
While employees who were validly terminated are ordinarily not entitled to
separation pay, an exception is when the court finds justification in applying
the principle of social justice according to the equities of the case. In this
case, the Court finds equitable and proper the award of separation pay in
favor of Santos in view of the length of her service with the School prior to
the events that led to the termination of her employment. To recall, Santos
was first employed by the School in 1978 as a Spanish language teacher.
During this time, the records of this case are silent as to the fact of any
infraction that she committed and/or any other administrative case against
her that was filed by the School. Thus, an award of separation pay equivalent
to one-half (1/2) month pay for every year of service is awarded in favor of
Santos on grounds of equity and social justice.
7. RAUL C. COSARE vs. BROADCOM ASIA, INC. and DANTE AREVALO
G.R. No. 201298

February 5, 2014

Facts
Complainant Raul C. Cosare instituted a labor complaint primarily for
constructive dismissal against his employer defendant Broadcom Asia, Inc.,
and its president defendant Dante Arevalo.
Complainant claimed that sometime in April 1993, he was employed as a
salesman by Arevalo, who was then in the business of selling broadcast
equipment needed by television networks and production houses. In
December 2000, Arevalo set up the company Broadcom, still to continue the
business of trading communication and broadcast equipment. Cosare was
named an incorporator of Broadcom In October 2001, Cosare was
promoted to the position of Assistant Vice President for Sales (AVP for Sales)
and Head of the Technical Coordination, having a monthly basic net salary
and average commissions of P18,000.00 and P37,000.00, respectively.
Thereafter, sometime in 2003, Alex F. Abiog (Abiog) was appointed as
Broadcoms Vice President for Sales and thus, became Cosares immediate
superior. On March 23, 2009, Cosare sent a confidential memo to Arevalo to
inform him of the following anomalies which were allegedly being committed
by Abiog against the company: (a) he failed to report to work on time, and
would immediately leave the office on the pretext of client visits; (b) he
advised the clients of Broadcom to purchase camera units from its
competitors, and received commissions therefor; (c) he shared in the under
the-table dealings or confidential commissions which Broadcom extended
to its clients personnel and engineers; and (d) he expressed his complaints
and disgust over Broadcoms uncompetitive salaries and wages and delay in
the payment of other benefits, even in the presence of office staff. Cosare
ended his memo by clarifying that he was not interested in Abiogs position,
but only wanted Arevalo to know of the irregularities for the corporations
sake.
There appears to be no response from Defendant Arevalo regarding the
above accusations. Cosare claimed that he was instead called for a meeting
by Arevalo on March 25, 2009, wherein he was asked to tender his
resignation in exchange for financial assistance in the amount of
P300,000.00. Cosare refused to comply with the directive, as signified in a
letter dated March 26, 2009 which he sent to Arevalo.
9 | Page

Thereafter, on 30 March 2009, Complainant received a memo charging him

with serious misconduct and willful breach of trust and required him to
respond within forty-eight (48) hours. The memo was signed by Defendant
Arevalo. Complainant was also suspended from having access to any and
all company files/records and use of company assets effective immediately.
Thus, on the following day, he was refused entry. On the 4th day from receipt
of the memo, Complainant furnished his employer his reply but it was
refused to be received on the ground of late filing. Thus, Complainant sent it
via registered mail. As a result, Complainant instituted this labor complaint
for constructive dismissal.
HELD
Defendant Corporation and Individual Arevalo are jointly and solidarily liable.
Constructive and illegal dismissal were present. Constructive dismissal
occurs when there is cessation of work because continued employment is
rendered impossible, unreasonable, or unlikely as when there is a demotion
in rank or diminution in pay or when a clear discrimination, insensibility, or
disdain by an employer becomes unbearable to the employee leaving the
latter with no other option but to quit.
Citing jurisprudence, the test of constructive dismissal is whether a
reasonable person in the employees position would have felt compelled to
give up his position under the circumstances. It is an act amounting to
dismissal but is made to appear as if it were not. Constructive dismissal is
therefore a dismissal in disguise. The law recognizes and resolves this
situation in favor of employees in order to protect their rights and interests
from the coercive acts of the employer.
Based on the records, [defendants] already rejected Cosares continued
involvement with the company. Even their refusal to accept the explanation
which Cosare tried to tender on April 2, 2009 further evidenced the resolve
to deny Cosare of the opportunity to be heard prior to any decision on the
termination of his employment. The [defendants] allegedly refused
acceptance of the explanation as it was filed beyond the mere 48-hour
period which they granted to Cosare under the memo dated March 30, 2009.
However, even this limitation was a flaw in the memo or notice to explain
which only further signified the [defendants] discrimination, disdain and
insensibility towards Cosare, apparently resorted to by the [defendants] in
order to deny their employee of the opportunity to fully explain his defenses
and ultimately, retain his employment.
Evidently, defendants were already resolute on a severance of their working
relationship with Cosare, notwithstanding the facts which could have been
established by his explanations and the respondents full investigation on the
matter. In addition to this, the fact that no further investigation and final
disposition appeared to have been made by the respondents on Cosares
case only negated the claim that they actually intended to first look into the
matter before making a final determination as to the guilt or innocence of
their employee. This also manifested from the fact that even before Cosare
was required to present his side on the charges of serious misconduct and
willful breach of trust, he was summoned to Arevalos office and was asked
to tender his immediate resignation in exchange for financial assistance.
As for abandonment, there is no merit to the claim. Abandonment is the
deliberate and unjustified refusal of an employee to resume his employment.
To constitute abandonment of work, two elements must concur: (1) the
10 | P a g e

employee must have failed to report for work or must have been absent
without valid or justifiable reason; and (2) there must have been a clear
intention on the part of the employee to sever the employer-employee
relationship manifested by some overt act.
Here, complainants failure to report to work beginning April 1, 2009 was
neither voluntary nor indicative of an intention to sever his employment with
Broadcom. It was illogical to be requiring him to report for work, and
imputing fault when he failed to do so after he was specifically denied access
to all of the companys assets.
As there is constructive dismissal in this case, an illegally or constructively
dismissed employee is entitled to: (1) either reinstatement, if viable, or
separation pay, if reinstatement is no longer viable; and (2) backwages. The
award of exemplary damages was also justified given the NLRCs finding that
the respondents acted in bad faith and in a wanton, oppressive and
malevolent manner when they dismissed Cosare. It is also by reason of such
bad faith that Arevalo was correctly declared solidarily liable for the
monetary awards.
8. INTEL TECHNOLOGY PHILIPPINES, INC. vs. NATIONAL LABOR
RELATIONS COMMISSION AND JEREMIAS CABILES
G.R. No. 200575
February 5, 2014
Facts
Complainant Jeremias Cabiles filed a labor complaint primarily to recover
retirement benefits from his employer Defendant Intel Technology
Philippines, Inc. Cabiles was initially hired by Intel Phil. on April 16, 1997 as
an Inventory Analyst. He was subsequently promoted several times over the
years and was also assigned at Intel Arizona and Intel Chengdu. He later
applied for a position at Intel Semiconductor Limited Hong Kong (Intel HK).
He was offered by the latter the position of Finance Manager.
Prior to accepting the post, Complainant sent an email to Defendant which
read:
Are there any clearance requirements I need to fulfil as I move as a local
hire to Hong Kong starting February 1?? I am still on my expat assignment in
Chengdu till it ends January 31. Then immediately I become a HK local
employee so I dont technically repatriate and work back to my home site
Philippines at all.
Nevertheless, I still need to close I think my employment there and so that
all my ES benefits and clearance will be closed like conversion of my
vacation leaves to cash, carry over of my service tenure in CV to HK etc.
Please do let me know what process I need to go through or would an email
notification be enough?
Another issue I would like to clarify is with regard to my retirement benefits.
Will celebrate my 10th year of service with Intel on April 16, 2007. However,
because I will be moving to Hong Kong as a local hire starting February 1,
would I still be entitled to retirement benefits?? Do we round up the years of
service if its close enough to 10 years?? If not, what other alternatives I have
or do I just lose my years of service at Intel Philippines? Any possibility that I
keep my 9.5 years and start it from there when I work in the Philippines
again in the future?? [Emphases supplied]
11 | P a g e

In response, Defendant stated that Complainant was not yet entitled to the
retirement benefit as he has not yet rendered at least 10 years of service.
Afterwards, Complainant received his final pay and executed a Release,
Waiver, and Quitclaim (Waiver). After seven (7) months with Intel HK,
Complainant resigned. Two years after that, he filed the present labor case
alleging non-payment of retirement benefits and for moral and exemplary
damages. He insists that he has been employed with by Intel for 10 years
and 5 months, including his Intel HK stint.
HELD
Complainant was not entitled to his retirement benefits as he did not render
10 years of service. Complainant resigned prior to making it on his 10th year.
Resignation is the formal relinquishment of an office, the overt act of which
is coupled with an intent to renounce. This intent could be inferred from the
acts of the employee before and after the alleged resignation.
Here, [Complainant], while still on a temporary assignment in Intel
Chengdu, was offered by Intel HK the job of a Finance Manager.
In his letter, it showed two of Complainants main concerns: a) clearance
procedures; and b) the probability of getting his retirement pay despite the
non-completion of the required 10 years of employment service. Beyond
these concerns, however, was his acceptance of the fact that he would be
ending his relationship with Intel Phil. as his employer. The words he used
local hire, close, clearance denote nothing but his firm resolve to
voluntarily disassociate himself from Intel Phil. and take on new
responsibilities with Intel HK.
Even if there was no favorable response to that letter, Complainant still
accepted the Intel HK post. His acceptance of the offer meant letting go of
the retirement benefits he now claims as he was informed through email
correspondence that his 9.5 years of service with Intel Phil. would not be
rounded off in his favor. He, thus, placed himself in this position, as he chose
to be employed in a company that would pay him more than what he could
earn in Chengdu or in the Philippines.
Complainant made a choice. The choice of staying with Intel Phil. vis--vis a
very attractive opportunity with Intel HK put him in a dilemma. If he would
wait to complete ten (10) years of service with Intel Phil. (in about 4 months)
he would enjoy the fruits of his retirement but at the same time it would
mean forfeiture of Intel HKs compensation offer in the amount of HK $
942,500.00, an amount a lot bigger than what he would receive under the
plan. He decided to forfeit and became Intel HKs newest hire.
As such, Complainant did resign. All these are indicative of the clearest
intent of Cabiles to sever ties with Intel Phil. He chose to forego his tenure
with Intel Phil., with all its associated benefits, in favor of a more lucrative job
for him and his family with Intel HK.
Regarding his claim that he was merely assigned Intel HK or an extension of
his employment with Intel Phil., there is no such secondment contract. The
continuity, existence or termination of an employer-employee relationship in
a typical secondment contract or any employment contract for that matter is
measured by the following yardsticks: 1. the selection and engagement of
the employee; 2. the payment of wages; 3. the power of dismissal;
and 4. the employers power to control the employees conduct.
12 | P a g e

Applying the four-fold test, Intel HK became the new employer. It provided
Cabiles his compensation. Cabiles then became subject to Hong Kong labor
laws, and necessarily, the rights appurtenant thereto, including the right of
Intel HK to fire him on available grounds. Lastly, Intel HK had control and
supervision over him as its new Finance Manager. Evidently, Intel Phil. no
longer had any control over him.
Complainants Waiver was valid. Citing jurisprudence, [n]ot all waivers and
quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding
on the parties and may not later be disowned simply because of a change of
mind. It is only where there is clear proof that the waiver was wangled from
an unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction
must be recognized as a valid and binding undertaking.
9. GOYA Inc. vs GOYA Inc. Employees Union FFW
G.R. No. 170054 : January 21, 2013
Facts
Petitioner Goya Inc. (Goya) hired contractual employees from PESO
Resources Development Corporation (PESO). This prompted Goya, Inc.
Employees Union-FFW (Union) to request for a grievance conference on the
ground that the contractual workers do not belong to the categories of
employees stipulated in their CBA. The Union also argued that hiring
contractual employees is contrary to the union security clause embodied in
the CBA.
When the matter remained unresolved, the grievance was referred to the
NCMB for voluntary arbitration. The Union argued that Goya is guilty of ULP
for gross violation of the CBA. The voluntary arbitrator dismissed the Unions
charge of ULP but Goya was directed to observe and comply with the CBA.
While the Union moved for partial consideration of the VA decision, Goya
immediately filed a petition for review before the Court of Appeals to set
aside the VAs directive to observe and comply with the CBA commitment
pertaining to the hiring of casual employees. Goya argued that hiring
contractual employees is a valid management prerogative. The Court of
Appeals dismissed the petition.
ISSUE
Whether the act of hiring contractual employees is a valid exercise of
management prerogative?
HELD
The petition must fail.
LABOR LAW:
agreement.

management

prerogative;

ULP;

collective

bargaining

The CA did not commit serious error when it sustained the ruling that the
hiring of contractual employees from PESO was not in keeping with the intent
and spirit of the CBA. In this case, a complete and final adjudication of the
dispute between the parties necessarily called for the resolution of the
related and incidental issue of whether the Company still violated the CBA
13 | P a g e

but without being guilty of ULP as, needless to state, ULP is committed only if
there is gross violation of the agreement.
Goya kept on harping that both the VA and the CA conceded that its
engagement of contractual workers from PESO was a valid exercise of
management prerogative. It is confused. To emphasize, declaring that a
particular act falls within the concept of management prerogative is
significantly different from acknowledging that such act is a valid exercise
thereof. What the VA and the CA correctly ruled was that the Companys act
of contracting out/outsourcing is within the purview of management
prerogative. Both did not say, however, that such act is a valid exercise
thereof. Obviously, this is due to the recognition that the CBA provisions
agreed upon by Goya and the Union delimit the free exercise of management
prerogative pertaining to the hiring of contractual employees.
A collective bargaining agreement is the law between the parties. A
collective bargaining agreement or CBA refers to the negotiated contract
between a legitimate labor organization and the employer concerning wages,
hours of work and all other terms and conditions of employment in a
bargaining unit. As in all contracts, the parties in a CBA may establish such
stipulations, clauses, terms and conditions as they may deem convenient
provided these are not contrary to law, morals, good customs, public order or
public policy. Thus, where the CBA is clear and unambiguous, it becomes the
law between the parties and compliance therewith is mandated by the
express policy of the law.
As repeatedly held, the exercise of management prerogative is not unlimited;
it is subject to the limitations found in law, collective bargaining agreement
or the general principles of fair play and justice.
Petition is DENIED.
10. GENERAL MILLING CORPORATION vs VIOLETA L. VIAJAR
G.R. No. 181738 : January 30, 2013
Facts
GMC is a domestic corporation with principal office in Makati City and a
manufacturing plant in Lapu-Lapu City. GMC terminated the services of
thirteen (13) employees for redundancy, including herein respondent, Violeta
Viajar (Viajar). GMC alleged that it has been gradually downsizing its Vismin
(Visayas-Mindanao) Operations in Cebu where a sizeable number of positions
became redundant over a period of time. When Viajar reported for, a month
before the effectivity of her severance from the company, the guard on duty
barred her fromentering GMCs premises. She was also denied access to her
office computer and was restricted from punching her daily time record in
the bundy clock. Viajar was then invited to the HRD Cebu Office where she
was asked to sign certain documents, which turned out to be an "Application
for Retirement and Benefits." The respondent refused to sign and sought
clarification because she did not apply for retirement and instead asserted
that her services were terminated for alleged redundancy. Viajar also claimed
that between the period of July 4, 2003 and October 13, 2003, GMC hired
fifteen (15) new employees which aroused her suspicion that her dismissal
was not necessary. For its part, GMC insisted that Viajars dismissal was due
to the redundancy of her position. GMC reasoned out that it was forced to
terminate the services of the respondent because of the economic setbacks
14 | P a g e

the company was suffering which affected the companys profitability, and
the continuing rise of its operating and interest expenditures. Redundancy
was part of the petitioners concrete and actual cost reduction measures.
GMC also presented the required "Establishment Termination Report" which it
filed before the Department of Labor and Employment (DOLE) on October 28,
2003, involving thirteen (13) of its employees, including Viajar.
ISSUE:
Whether or not Viajar was validly dismissed on the ground of redundancy
RULING:
Article 283 of the Labor Code provides that redundancy is one of the
authorized causes for dismissal. It reads:
Article 283. Closure of establishment and reduction of personnel.
The employer may also terminate the employment of any employee due to
the installment of labor-saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the worker and the
Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of laborsaving devices or redundancy, the worker affected thereby shall be entitled
to a separation pay equivalent to at least his one (1) month pay or to at least
one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business
losses or reverses, the separation pay shall be equivalent to one (1) month
pay or at least one-half (1/2) month pay for every year of service, whichever
is higher. A fraction of at least six (6) months shall be considered one (1)
whole year.
From the above provision, it is imperative that the employer must comply
with the
requirements for a valid implementation of the companys redundancy
program, to wit:
(a) the employer must serve a written notice to the affected employees
and the DOLE at least one (1) month before the intended date of
retrenchment;
(b) the employer must pay the employees a separation pay equivalent
to at least one month pay or at least one month pay for every year of
service, whichever is higher;
(c) the employer must abolish the redundant positions in good faith;
and
(d) the employer must set fair and reasonable criteria in ascertaining
which positions are redundant and may be abolished.
Furthermore, the Court cannot overlook the fact that Viajar was prohibited
from entering the company premises even before the effectivity date of
termination; and was compelled to sign an "Application for Retirement and
Benefits." These acts exhibit the petitioners bad faith since itcannot be
denied that the respondent was still entitled to report for work until
November 30, 2003. The demand for her to sign the "Application for
Retirement and Benefits" also contravenes the fact that she was terminated
due to redundancy. Indeed, there is a difference between voluntary
retirement of an employee and forced termination due to authorized causes.
11. ELEAZAR S. PADILLO vs. RURAL BANK OF NABUNTURAN, INC.,
and MARK S. OROPEZA
G.R. No. 199338 : January 21, 2013
15 | P a g e

FACTS:
Petitioner, the late Eleazar Padillo (Padillo), was an employee of respondent
Rural Bank of Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to liquidity
problems in 2003, the Bank took out retirement/insurance plans with
Philippine American Life and General Insurance Company (Philam Life) for all
its employees in anticipation of its possible closure and the concomitant
severance of its personnel. Respondent Mark Oropeza is the president and
major stockholder of the bank.
Padillo suffered a mild stroke due to hypertension which consequently
impaired his ability to effectively pursue his work. He wrote a letter
addressed to Oropeza expressing his intention to avail of an early retirement
package. Despite several follow-ups, his request remained unheeded. Not
having received his claimed retirement benefits, Padillo filed with the NLRC a
complaint for the recovery of unpaid retirement benefits.
The Labor Arbiter dismissed Padillos complaint on the ground that the latter
did not qualify to receive any benefits under Article 300 of the Labor Code as
he was only fifty-five (55) years old when he resigned, while the law
specifically provides for an optional retirement age of sixty (60) and
compulsory retirement age of sixty-five (65).
Padillo elevated the matter to the NLRC. The NLRC reversed the Labor
Arbiters ruling. Aggrieved, Oropeza and the Bank filed a petition for certiorari
with the CA. The CA reversed the NLRCs ruling but with modification. It
directed the respondents to pay Padillo the amount of P50,000.00 as
financial assistance exclusive of the P100,000.00 Philam Life Plan benefit.
Displeased with the CAs ruling, Padillo (now substituted by his legal heirs due
to his death) filed the instant petition before the Supreme Court.
ISSUE:
Whether or not Padillo is entitled to claim for separation and retirement
benefits under the Labor Code?
HELD:
The petition is partly meritorious.

LABOR LAW: disease as ground for termination; retirement benefits

At the outset, it must be maintained that the Labor Code provision on
termination on the ground of disease under Article 297 does not apply in this
case, considering that it was Padillo and not the Bank who severed the
employment relations. A plain reading of the Article 297 of the Labor Code
clearly presupposes that it is the employer who terminates the services of
the employee 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. It does not contemplate a situation where it
is the employee who severs his or her employment ties.
What remains applicable, however, is the Labor Code provision on
retirement. In the absence of any applicable agreement, an employee must
(1) retire when he is at least sixty (60) years of age and (2) serve at least (5)
years in the company to entitle him/her to a retirement benefit of at least
one-half (1/2) month salary for every year of service, with a fraction of at
16 | P a g e

least six (6) months being considered as one whole year. Notably, these age
and tenure requirements are cumulative and non- compliance with one
negates the employees entitlement to the retirement benefits under Article
300 of the Labor Code altogether.
In this case, it is undisputed that there exists no retirement plan, collective
bargaining agreement or any other equivalent contract between the parties
which set out the terms and condition for the retirement of employees, with
the sole exception of the Philam Life Plan which premiums had already been
paid by the Bank.
Unfortunately, while Padillo was able to comply with the five (5) year tenure
requirement as he served for twenty-nine (29) years he, however, fell short
with respect to the sixty (60) year age requirement given that he was only
fifty-five (55) years old when he retired. Therefore, without prejudice to the
proceeds due under the Philam Life Plan, petitioners claim for retirement
benefits must be denied.
Nevertheless, the Court concurs with the CA that financial assistance should
be awarded but at an increased amount. With a veritable understanding that
the award of financial assistance is usually the final refuge of the laborer,
considering as well the supervening length of time which had sadly
overtaken the point of Padillos death an employee who had devoted twentynine (29) years of dedicated service to the Bank the Court, in light of the
dictates of social justice, holds that the CAs financial assistance award
should be increased from P50,000.00 to P75,000.00, still exclusive of the
P100,000.00 benefit receivable by the petitioners under the Philam Life Plan
which remains undisputed.
CIVIL LAW: abuse of right; damages
Finally, the Court finds no bad faith on the part of the Bank and Oropeza as
they were within their right, absent any proof of its abuse, to ignore Padillos
misplaced claim for retirement benefits. Oropezas and the Banks obstinate
refusal to accede to Padillos request is precisely justified by the fact that
here lies no basis under any applicable agreement or law which accords the
latter the right to demand any retirement benefits from the Bank. While the
Court mindfully notes that damages may be recoverable due to an abuse of
right under Article 21 in conjunction with Article 19 of the Civil Code the
following elements must, however, obtain: ( 1) there is a legal right or duty;
(2) exercised in bad faith; and (3) for the sole intent of prejudicing or injuring
another. Records reveal that none of these elements exists in the case at bar
and thus, no damages on account of abuse of right may he recovered.
PARTLY GRANTED.

12. UNIVERSITY OF THE EAST, DEAN ELEANOR JAVIER, RONNIE

GILLEGO and DR. JOSE C. BENEDICTO vs. ANALIZA F. PEPANIO and
MARITI D. BUENO
G.R. No. 193897 : January 23, 2013
17 | P a g e

FACTS:
In 1992, DECS issued the Revised Manual of Regulations for Private Schools,
which requires college faculty members to have a master's degree as a
minimum educational qualification for acquiring regular status.
University of the East hired respondent Mariti D. Bueno (Bueno) in 1997 and
respondent Analiza F. Pepanio (Pepanio) in 2000, both on a semester-tosemester basis to teach in its college. During this time, the 1994 CBA was
still in force. It provided that UE shall extend only semester-to-semester
appointments to college faculty staffs who did not possess the minimum
qualifications. Meantime, DECS-CHED-TESDA-DOLE Joint Order 1 was issued
which provides that teaching or academic personnel who do not meet the
minimum academic qualifications shall not acquire tenure or regular status.
Then in 2001, UE and the faculty union entered into a new CBA that would
have the school extend probationary full-time appointments to full-time
faculty members who did not yet have the required postgraduate degrees
provided that the latter would obtain such requirement during their
probationary period. Hence, UE extended probationary appointments to
Bueno and Pepanio. The two, however, failed to obtain post-graduate
degrees.
UE informed Bueno and Pepanio that their probationary status is about to
expire since they lack the required post-graduate qualification. However,
Bueno and Pepanio demanded that they should be considered as regular
employees since they were hired in 1997 and 2000, when what was in force
was the 1994 CBA which did not require a masters degree before attaining
regular status. UE did not heed to their demands.
Thus, they filed a case for illegal dismissal before the Labor Arbiter. The LA
ruled in their favor. Dissatisfied, UE appealed to the NLRC. The NLRC
reversed the LAs ruling.
On petition for certiorari, the Court of Appeals rendered a Decision
reinstating the LAs Decision by reason of technicality. This prompted UE to
file the present petition.
ISSUE:
Whether or not Bueno and Pepanio were validly terminated from their
employment?
HELD:
Petition is granted.
LABOR LAW: collective bargaining agreement
The policy requiring postgraduate degrees of college teachers was provided
in the Manual of Regulations as early as 1992. Indeed, recognizing this, the
1994 CBA provided even then that UE was to extend only semester- tosemester appointments to college faculty staffs, like Bueno and Pepanio, who
did not possess the minimum qualifications for their positions.
Besides, as the Court held in Escorpizo v. University of Baguio, a school CBA
must be read in conjunction with statutory and administrative regulations
governing faculty qualifications. Such regulations form part of a valid CBA
without need for the parties to make express reference to it. While the
18 | P a g e

contracting parties may establish such stipulations, clauses, terms and

conditions, as they may see fit, the right to contract is still subject to the
limitation that the agreement must not be contrary to law or public policy.
Here, UE gave Bueno and Pepanio more than ample opportunities to acquire
the postgraduate degree required of them. But they did not take advantage
of such opportunities. Justice, fairness, and due process demand that an
employer should not be penalized for situations where it had little or no
participation or control.
NLRC's decision is reinstated.
13. ROLANDO L. CERVANTES vs. PAL MARITIME CORPORATION and/or
WESTERN SHIPPING AGENCIES, PTE., LTD.
G.R. No. 175209, January 16, 2013
Facts
Petitioner Rolando Cervantes (Cervantes) was hired as Master on board the
vessel M/V Themistocles by respondent PAL Maritime Corporation, the
manning agent of respondent Western Shipping Agencies, PTE., LTD.,
(Western Shipping) for a 10-month period. In less than a month on-board, a
telex message was sent to Cervantes enumerating several complaints
against him received from Colonial Shipping, the owner of the vessel. On the
following day, petitioner sent a telex message and imputed ill-motive on the
part of the foreign inspectors who were making false accusations against
Filipino crew members. In the same message, petitioner addressed all the
complaints raised against him. Cervantes sent another telex message
informing Western Shipping of the unbearable situation on board. In response
to said message, Western Shipping sent a letter informing the former that
the owners have decided to relieve him upon passing Panama Canal or next
convenient port and that the pre-mature ending of contract is mutually
agreed and for the benefits of the parties. Cervantes replied that he had no
choice but to accept the decision and thanked them for relieving him.
Petitioner was, then, repatriated to Manila. Petitioner filed a Complaint for
illegal dismissal. He prayed for actual, moral and exemplary damages
plus attorneys fees.
In their Answer, respondents alleged that petitioner voluntarily and freely
pre-terminated his own contract.
ISSUE:
Whether or not Cervantes resigned from his employment
RULING:
Resignation is the voluntary act of an employee who finds himself in a
situation where he believes that personal reasons cannot be sacrificed in
favor of the exigency of the service, such that he has no other choice but to
disassociate himself from his employment. This is precisely what obtained in
this case. The statements of petitioner were simple and straightforward.
There is no merit to his claim that he was forced to resign due to extreme
pressure. Only two (2) days had elapsed from the time petitioner received a
copy of the complaint from the owners of the vessel until his letter
demanding his relief. The telex message outlining numerous complaints
against petitioner probably bruised his ego, causing petitioner to react
impulsively by resigning. Petitioner failed to substantiate his claim that he
and the Filipino crew members were being subjected to racial discrimination
on board. Petitioner presented a letter-petition against a Greek technician
who allegedly maltreated Filipino crew members. However, there was no
19 | P a g e

showing that the Greek technician spearheaded nor had any participation in
the complaint of Colonial Shipping against petitioner.
14.
JAVIER
(DANILO
P.
JAVIER),
CORPORATION/FLORDELYN CASTILLO,
G.R. No. 192558 February 15, 2012

vs.

FLY

ACE

Facts:
1. Since 2007, Danilo Bitoy Javier was an employee of Fly Ace

Performed various tasks, such as cleaning and arranging the canned

items before their delivery, except in instances when he would be
ordered to accompany the company's delivery vehicles, as pahinante

Reported for work M to S from 7AM to 5PM

He wasnt issued an ID and payslips

2. May 6, 2008: He was no longer allowed to enter the premises, upon
instruction of Mr. Ong, his superior

As he was begging the security guard to let him enter, he saw Mr. Ong,
whom he approached and asked why he was being barred from
entering

Tanungin mo anak mo Mr. Ong

Bitoy discovered that Mr. Ong had been courting his daughter Annalyn;
that Annalyn tried to talk to Mr. Ong and convince him to spare Bitoy
from trouble, but he refused; that Mr. Ong then fired Bitoy
3. May 23, 2008: Bitoy filed a complaint with the NLRC for underpayment of
salaries and other labor standard benefits

His evidence: affidavit of Bengie Valenzuela, who alleged that Bitoy

was a stevedore or pahinante of Fly Ace from Sept. 2007 to Jan. 2008

Fly Ace said it was in the business of importation and sales of groceries
o That Bitoy was contracted by Mr. Ong as extra helper on a pakyaw
basis for 5-6 times a month, whenever the vehicle of its contracted
hauler, Milmar Hauling Services, was unavailable;
o Rate was P300 (increased to P325)
o That on April 30, they no longer needed his services
o That Bitoy was not their employee, and there was no illegal dismissal
o Evidence: Agreement with Milmar Hauling Services (the contracted
hauler) and copies of acknowledgment receipts evidencing payment
to Javier daily manpower (pakyaw/piece rate pay)
4. LA: Dismissed, Bitoy failed to present proof he was a regular employee of
Fly Ace

He has no ID nor any document showing he received benefits accorded

to regular employees

Bitoy was contracted on pakiao basis because Fly Ace has a regular
hauler to deliver its products

Claim for underpayment of salaries unfounded; payroll presented had

Bitoys signature, which, despite not being uniform, appeared to be his
true signature
5. NLRC: Favored Bitoy

LA wrong because it immediately concluded Bitoy as not a regular

employee simply because he failed to present proof

That a pakyaw-basis arrangement did not preclude the existence of

employer-employee relationship because payment is a method of
compensation, it does not define the essence of the relation It is a
mere method of computing compensation, not a basis for determining
the existence or absence of an employer-employee relationship.

20 | P a g e

Just because the work done was not directly related to the trade or
business or the work was considered as extra, it does not follow that
Bitoy is a job contractor, rather than an employee

There was sufficient basis on the existence of an ER-EE relationship

o There was a reasonable connection between the activity performed
(as pahinante) in relation to the business or trade of the employer
(importation, sales, delivery of groceries)
o Not an independent contractor because he could not exercise
judgment in the delivery of products, he was only a helper

Bitoy is entitled to security of tenure; Fly Ace did not present proof for
a valid cause of termination, so it is liable for illegal dismissal,
backwages, and separation pay
6. CA: Annulled the NLRC, reinstated the LA

In an illegal dismissal case, the onus probandi rests on the employer;

however, before an illegal dismissal case can prosper, an ER-EE
relationship must first be established

Incumbent upon Bitoy to prove he is an employee, but he failed to

discharge this burden

Bitoys failure to present salary vouchers, playslips or other pieces of

evidence to bolster his contention

The facts alleged by Bitoy did NOT pass the control test
o He contracted work outside the premises
o He was not required to observe definite hours
o He was not required to report daily
o He was free to accept work elsewhere
7. Appeal to the SC

Issues:
1. WON Bitoy is a regular employee
2. WON he is entitled to his monetary claims
Held:
1. NO, he is not a regular employee; affirmed CA
- Bitoy: Fly Ace has nothing to substantiate that he was engaged on a
pakyaw basis; and assuming he was hird on pakyaw basis, it does not
preclude his regular employment; acknowledgement receipts with his
signature do not show true nature of employment (relied on Chavez v.
NLRC)
o His tasks as pahinante are related to Fly Airs business
o He was subject to the control and supervision of the company
(reported M to S, 7AM to 5PM)
o List of deliverable goods prepared by Fly Ace Bitoy was subject to
compliance with company rules
o He was illegally dismissed by Fly Ace
- Fly Ace: Bitoy had no substantial evidence to prove ER-EE relationship
o Despite having Milmar Hauling under service contract, they
contracted Bitoy as an extra helper or pahinante, on a mere per trip
basis
o Bitoy and the company driver would have the vehicle and products in
their custody, and when they left company premises, they use their
own means, method, best judgment and discretion (i.e., no control by
Fly Ace)
o Claims of employment by Bitoy are BASELESS, and nothing was
presented to substantiate this
o Lopez v. Bodega City: In an illegal dismissal case, the burden of proof
is upon the complainant w ho claims to be an employee. It is
21 | P a g e

essential that an employer-employee relationship be proved by

substantial evidence
o Bitoy merely offers factual assertions, unsupported by proof
o Bitoy was not subject to Fly Aces control, he performed his work
outside the premises, he was not made to report at regular work
hours, he was free to leave any time
- SC: Evoked equity jurisdiction to examine the factual issues
- The LA and CA found that Bitoys claim of employment is wanting and
deficient; the Court is constrained to agree
- Bitoy needs to show by substantial evidence (Sec. 10, Rule VII, New
Rules of Procedure of the NLRC) that he was indeed an employee
against which he claims illegal dismissal
- In sum, the rule of thumb remains: the onus probandi falls on
petitioner to establish or substantiate such claim by the requisite
quantum of evidence.32 "Whoever claims entitlement to the benefits
provided by law should establish his or her right thereto . . . ." Bitoy
failed to adduce substantial evidence as basis for the grant of relief
- All Bitoy presented were self-serving statements showing his activities
as employee, but failed to pass the substantiality requirement (as
concluded also by the LA and the CA), from which the SC sees no
reason to depart
o Affidavit of Bengie Valenzuela that Bitoy presented was insufficient
because all it provided was that he would frequently see Bitoy at the
workplace where he (Bengie) was a stevedore
o SC: Mere presence falls short of proving employment
- SC: The burden is on Bitoy to pass the control test
o Bitoy was not able to persuade the Court that the elements exist (no
competent proof that he was a regular employee, that Fly Ace paid
wages as an employee, that Fly Ace could dictate what his conduct
wuld be while at work)
- SC: Fly Ace does not dispute having contracted Javier and paid him on
a "per trip" rate as a stevedore, albeit on a pakyaw basis.
o They presented documentary proof acknowledgment receipts
2. Moot. No need to resolve the second issue.
Obiter: "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
Disposition: Petition is DENIED.
15. ARMANDO ALILING vs. JOSE B. FELICIANO, MANUEL F. SAN
MATEOIII, JOSEPH R. LARIOSA, and WIDE WIDE WORLD EXPRESS
CORPORATION
G.R. No. 185829. April 25, 2012
Facts
Nature of the Case:
This Petition for Review on Certiorari under Rule 45 assails and seeks to set
aside the July 3, 2008 Decision and December 15, 2008 Resolution of the
22 | P a g e

Court of Appeals (CA), in CA-G.R. SP No. 101309, entitled Armando Aliling v.

National Labor Relations Commission, Wide Wide World Express Corporation,
Jose B. Feliciano, Manuel F. San Mateo III and Joseph R. Lariosa.
Facts:
Respondent Wide Wide World Express Corporation (WWWEC) offered to
employ petitioner Armando Aliling (Aliling) on June 2, 2004 as Account
Executive (Seafreight Sales), with a compensation package of a monthly
salary of PhP 13,000, transportation allowance of PhP 3,000, clothing
allowance of PhP 800, cost of living allowance of PhP 500, each payable on a
per month basis and a 14 th month pay depending on the profitability and
availability of financial resources of the company. The offer came with a six
(6)-month probation period condition with this express caveat: Performance
during probationary period shall be made as basis for confirmation to Regular
or Permanent Status.
On June 11, 2004, Aliling and WWWEC inked an Employment Contract
under the terms of conversion to regular status shall be determined on the
basis of work performance; and employment services may, at any time, be
terminated for just cause or in accordance with the standards defined at the
time of engagement.
However, instead of a Seafreight Sale assignment, WWWEC asked
Aliling to handle Ground Express (GX), a new company product launched on
June 18, 2004 involving domestic cargo forwarding service for Luzon.
Marketing this product and finding daily contracts for it formed the core of
Alilings new assignment.
A month after, Manuel F. San Mateo III (San Mateo), WWWEC Sales and
Marketing Director, emailed Aliling to express dissatisfaction with the latters
performance.
On September 25, 2004, Joseph R. Lariosa (Lariosa), Human Resources
Manager of WWWEC, asked Aliling to report to the Human Resources
Department to explain his absence taken without leave from September 20,
2004.
Aliling responded two days later. He denied being absent on the days in
question, attaching to his reply-letter a copy of his timesheet which showed
that he worked from September 20 to 24, 2004. Alilings explanation came
with a query regarding the withholding of his salary corresponding to
September 11 to 25, 2004.
On October 15, 2004, Aliling tendered his resignation to San Mateo. While
WWWEC took no action on his tender, Aliling nonetheless demanded
reinstatement and a written apology, claiming in a subsequent letter dated
October 1, 2004 to management that San Mateo had forced him to resign.
Lariosas response-letter of October 1, 2004, informed Aliling that his
case was still in the process of being evaluated. On October 6, 2004,
Lariosa again wrote, this time to advise Aliling of the termination of his
services effective as of that date owing to his non-satisfactory performance
during his probationary period. Records show that Aliling, for the period
indicated, was paid his outstanding salary.
However, or on October 4, 2004, Aliling filed a Complaint for illegal dismissal
due to forced resignation, nonpayment of salaries as well as damages with
the NLRC against WWWEC. Appended to the complaint was Alilings Affidavit
dated November 12, 2004, in which he stated: 5. At the time of my
engagement, respondents did not make known to me the standards under
which I will qualify as a regular employee.
Refuting Alilings basic posture, WWWEC stated that in the letter offer and
employment contract adverted to, WWWEC and Aliling have signed a letter
of appointment on June 11, 2004 containing the terms of engagement.
23 | P a g e

WWWEC also attached to its Position Paper a memo dated September

20, 2004 in which San Mateo asked Aliling to explain why he should not be
terminated for failure to meet the expected job performance, considering
that the load factor for the GX Shuttles for the period July to September was
only 0.18% as opposed to the allegedly agreed upon load of 80% targeted
for August 5, 2004. According to WWWEC, Aliling, instead of explaining
himself, simply submitted a resignation letter.
On April 25, 2006, the Labor Arbiter issued a decision declaring that the
grounds upon which complainants dismissal was based did not conform not
only the standard but also the compliance required under Article 281 of the
Labor Code, Necessarily, complainants termination is not justified for failure
to comply with the mandate the law requires. Respondents should be
ordered to pay salaries corresponding to the unexpired portion of the
contract of employment and all other benefits amounting to a total of
P35,811.00 covering the period from October 6 to December 7, 2004.
The Labor Arbiter explained that Aliling cannot be validly terminated for noncompliance with thw quota threshold absent a prior advisory of the
reasonable standards upon which his performance would be evaluated.
Both parties appealed the decision to the NLRC, which affirmed the decision
of the Labor Arbiter. The separate motions for reconsideration were also
denied by the NLRC.
The CA anchored its assailed action on the strength of the following
premises: (a) respondents failed to prove that Alilings dismal performance
constituted gross and habitual neglect necessary to justify his dismissal; (b)
not having been informed at the time of his engagement of the reasonable
standards under which he will qualify as a regular employee, Aliling was
deemed to have been hired from day one as a regular employee; and (c) the
strained relationship existing between the parties argues against the
propriety of reinstatement.
Hence, the instant petition.
Issues:
1) Whether petitioner is a regular employee.
2) Whether petitioner was illegally dismissed.or his right to security of
tenure was violated.
3) Whether Alilings right to procedural due process was violated.
4) Whether Aliling is entitled to backwages and separation pay in lieu of
reinstatement.
Ruling:
1) Petitioner was regularized from the time of the execution of the
employment contract on June 11, 2004, although respondent company
had arbitrarily shortened his tenure. As pointed out, respondent
company did not make known the reasonable standards under which
he will qualify as a regular employee at the time of his
engagement. Hence, he was deemed to have been hired from day one
as a regular employee.
2) To justify fully the dismissal of an employee, the employer must, as a
rule, prove that the dismissal was for a just cause and that the
employee was afforded due process prior to dismissal. As a
complementary principle, the employer has the onus of proving with
clear, accurate, consistent, and convincing evidence the validity of the
dismissal.
The attendant circumstances in the instant case aptly show that the
issue of petitioners alleged failure to achieve his quota, as a ground
for terminating employment, strikes the Court as a mere afterthought
on the part of WWWEC. Consider: Lariosas letter of September 25,
24 | P a g e

2004 already betrayed managements intention to dismiss the

petitioner for alleged unauthorized absences. Aliling was in fact made
to explain and he did so satisfactorily. But, lo and behold, WWWEC
nonetheless proceeded with its plan to dismiss the petitioner for nonsatisfactory performance, although the corresponding termination
letter dated October 6, 2004 did not even specifically state Alilings
non-satisfactory performance, or that Alilings termination was by
reason of his failure to achieve his set quota.
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, petitioners right to security of tenure was
breached.
3) 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.
MGG Marine Services, Inc. v. NLRC tersely described the mechanics of
what may be considered a two-part due process requirement which
includes the two-notice rule, x x x one, of the intention to dismiss,
indicating therein his acts or omissions complained against, and two,
notice of the decision to dismiss; and an opportunity to answer and
rebut the charges against him, in between such notices.
King of Kings Transport, Inc. v. Mamac expounded on this procedural
requirement in this manner: a. first written notice, b. hearing or
conference, and c. written notice of termination. WWWEC did not
comply with the first notice requirement. Neither was there compliance
with the imperatives of a hearing or conference. The Court need not
dwell at length on this particular breach of the due procedural
requirement. Suffice it to point out that the record is devoid of any
showing of a hearing or conference having been conducted. On the
contrary, in its October 1, 2004 letter to Aliling, or barely five (5) days
after it served the notice of termination, WWWEC acknowledged that it
was still evaluating his case. And the written notice of termination itself
did not indicate all the circumstances involving the charge to justify
severance of employment.
4) As of that date June 11, 2004, Aliling became part of the WWWEC
organization as a regular employee of the company without a fixed
term of employment. Thus, he is entitled to backwages reckoned from
the time he was illegally dismissed on October 6, 2004, with a PhP
17,300.00 monthly salary, until the finality of this Decision. Article 279
of the Labor Code, as amended by Section 34 of Republic Act 6715
instructs:
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,
25 | P a g e

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.
The law intends the award of backwages and similar benefits to
accumulate past the date of the Labor Arbiters decision until the
dismissed employee is actually reinstated. But if, as in this case,
reinstatement is no longer possible, this Court has consistently ruled
that backwages shall be computed from the time of illegal dismissal
until the date the decision becomes final.
Additionally, Aliling is entitled to separation pay in lieu of
reinstatement on the ground of strained relationship.
The basis for the payment of backwages is different from that for
the award of separation pay. Separation pay is granted where
reinstatement is no longer advisable because of strained
relations between the employee and the employer. Backwages
represent compensation that should have been earned but were
not collected because of the unjust dismissal. The basis for
computing backwages is usually the length of the employee's
service while that for separation pay is the actual period when
the employee was unlawfully prevented from working.
Dispositive Portion:
WHEREFORE, the petition is PARTIALLYGRANTED.
The assailed Resolutions of respondent (Third Division) National Labor
Relations
Commission
are AFFIRMED,
with
the
following
MODIFICATION/CLARIFICATION: Respondent Wide Wide World
Express Corp. is liable to pay Armando Aliling the following: (a)
backwages reckoned from October 6, 2004 up to the finality of this
Decision based on a salary of PhP 17,300 a month, with interest at 6%
per annum on the principal amount from October 6, 2004 until fully
paid; (b) the additional sum equivalent to one (1) month salary for
every year of service, with a fraction of at least six (6) months
considered as one whole year based on the period from June 11, 2004
(date of employment contract) until the finality of this Decision, as
separation pay; (c) PhP 30,000 as nominal damages; and (d) Attorneys
Fees equivalent to 10% of the total award.

26 | P a g e