1. Dr. Pedrito Reyes vs. CA, Phil. Malay Poultry Breeders, Inc.

and since he did not prove he rendered services during said period, that car
Leong Hup Poultry Farm Sdn., Bhd. and insurance benefits are only granted during course of employment
G.R. No. 154448, August 15, 2003 and should not be part of the separation package, and demand for rental
payment of his house as office of Philmalay from Dec. 1, 1989 to July
FACTS: On August 24, 1989, respondent Leong Hup Poultry Farms of 1996 is not within the jurisdiction of the NLRC but the regular courts. And
Malaysia thru its managing director Francis Lau appointed petitioner being that respondents did not appeal the decision of the NLRC, then said
Pedrito Reyes as Technical/Sales Manager with a net salary of USD decision is deemed satisfactory to said respondents including the order of
4,500/month. In 1992, Leong Hup Farms formed Philippine Malay Poultry the NLRC to provide petitioner with legal services in the illegal
Breeders, Inc. (Philmalay) in the Philippines and petitioner was appointed recruitment case filed against the former in his stint as head of
General Manager with a monthly pay of USD 5,500. From 1996-97, Philmalay. Petitioner is also entitled to sick leave and vacation leave
respondents suffered losses which caused them to reduce production and computed based on 8 years of service, separation pay, 13th month pay
retrench employees. On June 30, 1997, petitioner gave verbal notice of and salary and attorney’s fees at 10% of total monetary award.
resignation effective Jan. 1, 1998. In a letter dated Jan. 12, 1998,
petitioner confirmed his verbal notice of resignation and requested the Petition is granted and case is remanded to Labor Arbiter for
same benefits as those granted to retrenched and resigned employees of recomputation of awards due petitioner.
the company. In a letter dated Jan. 19, 1998, Philmalay retrenched
petitioner effective Jan. 20, 1989 and promised him separation pay 2. J.K. Mercado & Sons Agricultural Enterprises vs. Sto. Tomas,
according to the Labor Code. However, petitioner was offered separation G.R. No. 158084, August 29, 2008
pay equivalent to four months only. This was rejected by petitioner.
Facts: On December 3, 1993, the Regional Tripartite Wages and
Petitioner filed with Labor Arbiter for underpayment of wages and non- Productivity Board, Region XI, issued Wage Order No. RTWPB-XI-03,
payment of separation pay, sick leave, vacation leave and other benefits. granting a Cost of Living Allowance (COLA) to covered workers.
Labor Arbiter ruled in favor of petitioner. On appeal by respondents at On January 28, 1994, petitioner filed an application for exemption from
NLRC, decision was modified to delete USD 3,370 as unpaid salary, USD the coverage of the aforesaid wage order. Thus, however, was denied by
28,600 as vacation leave, brand new car or its equivalent life insurance the regional wage board in an Order dated April 11, 1994,
and moral and exemplary damages and reducing separation pay to USD
44,400 by lowering length of service from 9 to 8 years only and finally Notwithstanding the said order, private respondents were not given the
limiting attorney’s fees to 10% of total awards. Motion for benefits due them under Wage Order No. RTWPB-XI-03. On July 10,
reconsideration of petitioner was denied and on appeal with CA was 1998, private respondents filed an Urgent Motion for Writ of Execution,
dismissed for failure to attach pertinent papers. On motion for and Writ of Garnishment in RTWPB-XI-03-CBBE-94 NWPBC Case No. E-
reconsideration with attachment of pertinent papers the same was denied 95-087 Case No. R1100 seeking the enforcement of subject wage order
again by the CA. against several entities including herein petitioner.

ISSUE: (1) Did the CA err in dismissing the petition for technicalities? On October 7, 1998, the OIC-Regional Director, Region XI, issued a Writ
(2) Should the Labor Arbiter’s decision be reinstated? of Execution for the enforcement of the Order dated April 11, 1994 of the
Regional Tripartite Wages and Productivity Board.
RULING:
(1) Yes, rules of procedure should not be applied in a very technical On November 17, 1998 and November 23, 1998, respectively,
sense, for they are adopted to help secure, not override, substantial petitioner filed a Motion to Quash the Writ of Execution and a
justice. In Ramos vs. CA, a dismissal should be reconsidered once Supplemental Motion to the Motion to Quash. Petitioner argued that
petitioner complies with the required attachments. In Jaro vs. CA, herein private respondents’ right had already prescribed due to their
substantial compliance of an appellant may call for relaxation of the rules failure to move for the execution of the April 11, 1994 Order within
of procedure. The same leniency should be applied in the case at bar the period provided under Article 291 of the Labor Code, as amended,
since petitioner demonstrated willingness to comply with the or within three (3) years from the finality of the said order.
requirements set by the rules, otherwise, application of the rules of
procedure in a very rigid and technical sense would defeat the ends of Issue: Whether or not the claim of respondents have already prescribed.
justice.
(2) No, modifications were needed such as reducing, as the NLRC Ruling: Art. 291 of the Labor Code applies to money claims in general
correctly determined, of the length of employment to 8 years from 9, and provides for a 3-year prescriptive period to file them. On the other
that petitioner is not entitled to compensation from Jan. 1 to 19, 1998 hand, respondent employees’ money claims in this case had been
reduced to a judgment, in the form of a Wage Order, which has become principally intended for daily paid employees, when the law clearly states
final and executory. The prescription applicable, therefore, is not the that every worker shall be paid their regular holiday pay.
general one that applies to money claims, but the specific one applying to Petitioner: CORAZON C. SIM
judgments. Thus, the right to enforce the judgment, having been Respondents: NATIONAL LABOR RELATIONS COMMISSION AND
exercised within five years, has not yet prescribed. EQUITABLE PCI-BANK

Stated otherwise, a claimant has three years to press a money claim. Petition: Illegal dismissal; Appeal by Certiorari under Rule 45 of the Rules
Once judgment is rendered in her favor, she has five years to ask for of Court
execution of the judgment, counted from its finality. This is consistent Ponente: Austria-Martinez
with the rule on statutory construction that a general provision should
yield to a specific one and with the mandate of social justice that doubts FACTS:
should be resolved in favor of labor. 1. Corazon Sim filed a case for illegal dismissal with the Labor Arbiter,
alleging that she was initially employed by Equitable PCI-Bank in 1990 as
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES’ UNION Italian Remittance Marketing Consultant to the Frankfurt Representative
(IBAA-EU), petitioner, vs.HON. AMADO G. INCIONG, and IBAA, Office.
respondents. G.R. No. L-52415 2. Eventually, she was promoted to Manager position, until September
October 23, 1984 1999, when she received a letter from Remegio David -- the Senior
FACTS: The Department of Labor promulgated the rules and regulations Officer, European Head of PCIBank, and Managing Director of PCIB-
for the implementation of holidays with pay. The controversial section Europe -- informing her that she was being dismissed due to loss of trust
thereof reads: “Sec. 2. Status of employees paid by the month. — and confidence based on alleged mismanagement and misappropriation
Employees who are uniformly paid by the month, irrespective of the of funds.
number of working days therein, with a salary of not less than the 3. Equitable PCI Bank denied any employer-employee relationship between
statutory or established minimum wage shall be presumed to be paid for them, and sought the dismissal of the complaint.
all days in the month whether worked or not. For this purpose, the 4. The Labor Arbiter rendered its Decision dismissing the case for want of
monthly minimum wage shall not be less than the statutory minimum jurisdiction and/or lack of merit. According to the Labor Arbiter: It
wage multiplied by 365 days divided by twelve” should be stressed at this juncture that the labor relations system in the
Later, Policy Instruction No. 9 was issued by the then Secretary of Labor Philippines has no extra-territorial jurisdiction. It is limited to the
interpreting the above-quoted rule, pertinent portions of which read: relationship between labor and capital within the Philippines. Labor
“xxx xxx xxx Arbiter:There was a valid cause for dismissal.
The ten (10) paid legal holidays law, to start with, is intended to benefit 5. Sim was accused of withdrawing P3,000,000.00 lire from the bank's
principally daily employees. In the case of monthly, only those whose account.
monthly salary did not yet include payment for the ten (10) paid legal 6. Sim does not deny withdrawing the said amount. What she submits is
holidays are entitled to the benefit.” that she used said amount for the Radio Pilipinas sa Roma radio program
Respondent IBAA by reason of the ruling laid down by the aforecited rule of the company.
implementing Article 94 of the Labor Code and by Policy Instruction No. 7. Equitable PCI-Bank countered that at the time Sim withdrew said
9, stopped the payment of holiday pay to all its employees. Writ of amount, the radio program was already off the air. She is a managerial
execution of the previously decided case for them to be paid their holiday employee. Thus, loss of trust and confidence is a valid ground for her
pay was filed by the petitioner. Labor arbiter and NLRC ruled in their dismissal.
favor. IBAA filed an MR to the Office of the Minister of Labor which set
aside the decision of NLRC. Hence this petition. *ART 6 of Labor code
ISSUE: WON holiday pay does not apply to monthly- paid employees. -shall be liberally construed, labor cases treated differently, procedural
HELD: No. Section 2, Rule IV, Book III of the implementing rules and lapses are not excused, requirement should not be bypassed.
Policy Instruction No. 9 issued by the then Secretary of Labor are null
and void since in the guise of clarifying the Labor Code’s provisions on ISSUE/S:
holiday pay, they in effect amended them by enlarging the scope of their 1. Whether or not the Labor Relations System of the Philippines has
exclusion. extraterritorial jurisdiction
The provisions of the Labor Code on the entitlement to the benefits of 2. Whether or not the National Labor Relations Commission has jurisdiction
holiday pay are clear and explicit – it provides for both the coverage of over overseas Filipino workers
and exclusion from the benefits. In Policy Instruction No. 9, the then
Secretary of Labor went as far as to categorically state that the benefit is
 RULING/RATIO: Yes to both issues. The Labor relations system in the of employer-employee relationship or by virtue of any law or contract
Philippines has extra-territorial jurisdiction and the Labor Arbiters of the involving Filipino workers for overseas deployment including claims for
National Labor Relations Commission (NLRC) have jurisdiction to hear actual, moral, exemplary and other forms of damages, subject to the
and decide, within the claims arising out of an employer-employee rules and procedures of the NLRC. In Philippine National Bank v.
relationship or by virtue of any law or contract involving Filipino workers Cabansag, the Court pronounced:
for overseas deployment including claims for actual, moral, exemplary
and other forms of damages. “Whether employed locally or overseas, all Filipino workers enjoy the
protective mantle of Philippine labor and social legislation, contract
Article 217 of the Labor Code provides for the jurisdiction of the Labor stipulations to the contrary notwithstanding. This pronouncement is in
Arbiter and the National Labor Relations Commission, viz.: keeping with the basic public policy of the State to afford protection to
labor, promote full employment, ensure equal work opportunities
ART. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except regardless of sex, race or creed, and regulate the relations between
as otherwise provided under this Code the Labor Arbiters shall have workers and employers. For the State assures the basic rights of all
original and exclusive jurisdiction to hear and decide, within thirty (30) workers to self-organization, collective bargaining, security of tenure, and
calendar days after the submission of the case by the parties for decision just and humane conditions of work [Article 3 of the Labor Code of the
without extension, even in the absence of stenographic notes, the Philippines; See also Section 18, Article II and Section 3, Article XIII,
following cases involving all workers, whether agricultural or non- 1987 Constitution]. This ruling is likewise rendered imperative by Article
agricultural: 17 of the Civil Code which states that laws "which have for their object
1. Unfair labor practice cases; public order, public policy and good customs shall not be rendered
2. Termination disputes; ineffective by laws or judgments promulgated, or by determination or
3. If accompanied with a claim for reinstatement, those cases that workers conventions agreed upon in a foreign country."
may file involving wage, rates of pay, hours of work and other terms and
conditions of employment; DISPOSITIVE: Petition was denied due to procedural issues. The CA did
4. Claims for actual, moral, exemplary and other forms of damages arising not commit any error in dismissing the petition before it for failure to file
from the employer-employee relations; a prior motion for reconsideration with the NLRC. The Labor Arbiter and
5. Cases arising from any violation of Article 264 of this Code, including the NLRC's factual findings as regards the validity of petitioner's dismissal
questions involving the legality of strikes and lockouts; and are accorded great weight and respect and even finality when the same
6. Except claims for Employees Compensation, Social Security, Medicare are supported by substantial evidence.
and maternity benefits, all other claims, arising from employer-employee
relations, including those of persons in domestic or household service, DOCTRINE: Labor arbiters have original and exclusive jurisdiction over
involving an amount of exceeding five thousand pesos (P5,000.00) claims arising from employer-employee relations, including termination
regardless of whether accompanied with a claim for reinstatement. disputes involving all workers, among whom are overseas Filipino
(b) The commission shall have exclusive appellate jurisdiction over all workers.
cases decided by Labor Arbiters.
G.R. No. 79182 September 11, 1991 (NO DIGEST)
Moreover, Section 10 of Republic Act (R.A.) No. 8042, or the Migrant PNOC-ENERGY DEVELOPMENT CORPORATION, petitioner,
Workers and Overseas Filipinos Act of 1995, provides: vs. NATIONAL LABOR RELATIONS COMMISSION (Third Division)
and DANILO MERCADO, respondents.
SECTION 10. Money Claims. — Notwithstanding any provision of law to Bacorro & Associates for petitioner.Alberto L. Dalmacion for private
the contrary, the Labor Arbiters of the National Labor Relations respondent.
Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the This is a petition for certiorari to set aside the Resolution * dated July 3,
complaint, the claims arising out of an employer-employee relationship or 1987 of respondent National Labor Relations Commission (NLRC for
by virtue of any law or contract involving Filipino workers for overseas brevity) which affirmed the decision dated April 30, 1986 of Labor Arbiter
deployment including claims for actual, moral, exemplary and other Vito J. Minoria of the NLRC, Regional Arbitration Branch No. VII at Cebu
forms of damages. City in Case No. RAB-VII-0556-85 entitled "Danilo Mercado, Complainant,
vs. Philippine National Oil Company-Energy Development Corporation,
Also, Section 62 of the Omnibus Rules and Regulations Implementing Respondent", ordering the reinstatement of complainant Danilo Mercado
R.A. No. 8042 provides that the Labor Arbiters of the NLRC shall have the and the award of various monetary claims.
original and exclusive jurisdiction to hear and decide all claims arising out The factual background of this case is as follows:
Private respondent Danilo Mercado was first employed by herein 1) To reinstate complainant to his former position with full back wages
petitioner Philippine National Oil Company-Energy Development from the date of his dismissal up to the time of his actual reinstatement
Corporation (PNOC-EDC for brevity) on August 13, 1979. He held various without loss of seniority rights and other privileges;
positions ranging from clerk, general clerk to shipping clerk during his 2) To pay complainant the amount of P10,000.00 representing his
employment at its Cebu office until his transfer to its establishment at personal share of his savings account with the respondents;
Palimpinon, Dumaguete, Oriental Negros on September 5, 1984. On June 3) To pay complainants the amount of P30,000.00 moral damages;
30, 1985, private respondent Mercado was dismissed. His last salary was P20,000.00 exemplary damages and P5,000.00 attorney's fees;
P1,585.00 a month basic pay plus P800.00 living allowance (Labor 4) To pay complainant the amount of P792.50 as his proportionate 13th
Arbiter's Decision, Annex "E" of Petition, Rollo, p. 52). month pay for 1985.
The grounds for the dismissal of Mercado are allegedly serious acts of Respondents are hereby further ordered to deposit the aforementioned
dishonesty committed as follows: amounts with this Office within ten days from receipt of a copy of this
1. On ApriI 12, 1985, Danilo Mercado was ordered to purchase 1,400 decision for further disposition.
pieces of nipa shingles from Mrs. Leonardo Nodado of Banilad, SO ORDERED.
Dumaguete City, for the total purchase price of Pl,680.00. Against (Labor Arbiter's Decision, Rollo, p. 56)
company policy, regulations and specific orders, Danilo Mercado withdrew The appeal to the NLRC was dismissed for lack of merit on July 3, 1987
the nipa shingles from the supplier but paid the amount of P1,000.00 and the assailed decision was affirmed.
only. Danilo Mercado appropriated the balance of P680.00 for his Hence, this petition.
personal use; The issues raised by petitioner in this instant petition are:
2. In the same transaction stated above, the supplier agreed to give the 1. Whether or not matters of employment affecting the PNOC-EDC, a
company a discount of P70.00 which Danilo Mercado did not report to the government-owned and controlled corporation, are within the jurisdiction
company; of the Labor Arbiter and the NLRC.
3. On March 28, 1985, Danilo Mercado was instructed to contract the 2. Assuming the affirmative, whether or not the Labor Arbiter and the
services of Fred R. Melon of Dumaguete City, for the fabrication of rubber NLRC are justified in ordering the reinstatement of private respondent,
stamps, for the total amount of P28.66. Danilo Mercado paid the amount payment of his savings, and proportionate 13th month pay and payment
of P20.00 to Fred R. Melon and appropriated for his personal use the of damages as well as attorney's fee.
balance of P8.66. Petitioner PNOC-EDC alleges that it is a corporation wholly owned and
In addition, private respondent, Danilo Mercado violated company rules controlled by the government; that the Energy Development Corporation
and regulations in the following instances: is a subsidiary of the Philippine National Oil Company which is a
1. On June 5, 1985, Danilo Mercado was absent from work without leave, government entity created under Presidential Decree No. 334, as
without proper turn-over of his work, causing disruption and delay of amended; that being a government-owned and controlled corporation, it
company work activities; is governed by the Civil Service Law as provided for in Section 1, Article
2. On June 15, 1985, Danilo Mercado went on vacation leave without XII-B of the 1973 Constitution, Section 56 of Presidential Decree No. 807
prior leave, against company policy, rules and regulations. (Petitioner's (Civil Service Decree) and Article 277 of Presidential Decree No. 442, as
Memorandum, Rollo, p. 195). amended (Labor Code).
On September 23, 1985, private respondent Mercado filed a complaint The 1973 Constitution provides:
for illegal dismissal, retirement benefits, separation pay, unpaid wages, The Civil Service embraces every branch, agency, subdivision and
etc. against petitioner PNOC-EDC before the NLRC Regional Arbitration instrumentality of the government including government-owned or
Branch No. VII docketed as Case No. RAB-VII-0556-85. controlled corporations.
After private respondent Mercado filed his position paper on December Petitioner PNOC-EDC argued that since Labor Arbiter Minoria rendered
16, 1985 (Annex "B" of the Petition, Rollo, pp. 28-40), petitioner PNOC- the decision at the time when the 1973 Constitution was in force, said
EDC filed its Position Paper/Motion to Dismiss on January 15, 1986, decision is null and void because under the 1973 Constitution,
praying for the dismissal of the case on the ground that the Labor Arbiter government-owned and controlled corporations were governed by the
and/or the NLRC had no jurisdiction over the case (Annex "C" of the Civil Service Law. Even assuming that PNOC-EDC has no original or
Petition, Rollo, pp. 41-45), which was assailed by private respondent special charter and Section 2(i), Article IX-B of the 1987 Constitution
Mercado in his Opposition to the Position Paper/Motion to Dismiss dated provides that:
March 12, 1986 (Annex "D" of the Petition, Rollo, pp. 46-50). The Civil Service embraces all branches, subdivision, instrumentalities
The Labor Arbiter ruled in favor of private respondent Mercado. The and agencies of the Government, including government-owned or
dispositive onion of said decision reads as follows: controlled corporations with original charters.
WHEREFORE, in view of the foregoing, respondents are hereby ordered: such circumstances cannot give validity to the decision of the Labor
Arbiter (Ibid., pp. 192-193).
This issue has already been laid to rest in the case of PNOC-EDC vs. for reconsideration (Odin Security Agency vs. De la Serna, 182 SCRA 472
Leogardo, 175 SCRA 26 (July 5, 1989), involving the same petitioner and [February 21, 1990]). Petitioner's subsequent Motion for Reconsideration
the same issue, where this Court ruled that the doctrine that employees and/or Appeal has the effect of curing whatever irregularity might have
of government-owned and/or con controlled corporations, whether been committed in the proceedings below (T.H. Valderama and Sons,
created by special law or formed as subsidiaries under the General Inc. vs. Drilon, 181 SCRA 308 [January 22, 1990]).
Corporation law are governed by the Civil Service Law and not by the Furthermore, it has been consistently held that findings of administrative
Labor Code, has been supplanted by the present Constitution. "Thus, agencies which have acquired expertise because their jurisdiction is
under the present state of the law, the test in determining whether a confined to specific matters are accorded not only respect but even
government-owned or controlled corporation is subject to the Civil finality (Asian Construction and Development Corporation vs. NLRC, 187
Service Law are the manner of its creation, such that government SCRA 784 [July 27, 1990]; Lopez Sugar Corporation vs. Federation of
corporations created by special charter are subject to its provisions while Free Workers, 189 SCRA 179 [August 30, 1990]). Judicial review by this
those incorporated under the General Corporation Law are not within its Court does not go so far as to evaluate the sufficiency of the evidence
coverage." but is limited to issues of jurisdiction or grave abuse of discretion
Specifically, the PNOC-EDC having been incorporated under the General (Filipinas Manufacturers Bank vs. NLRC, 182 SCRA 848 [February 28,
Corporation Law was held to be a government owned or controlled 1990]). A careful study of the records shows no substantive reason to
corporation whose employees are subject to the provisions of the Labor depart from these established principles.
Code (Ibid.). While it is true that loss of trust or breach of confidence is a valid ground
The fact that the case arose at the time when the 1973 Constitution was for dismissing an employee, such loss or breach of trust must have some
still in effect, does not deprive the NLRC of jurisdiction on the premise basis (Gubac v. NLRC, 187 SCRA 412 [July 13, 1990]). As found by the
that it is the 1987 Constitution that governs because it is the Constitution Labor Arbiter, the accusations of petitioner PNOC-EDC against private
in place at the time of the decision (NASECO v. NLRC, G.R. No. 69870, respondent Mercado have no basis. Mrs. Leonardo Nodado, from whom
168 SCRA 122 [1988]). the nipa shingles were purchased, sufficiently explained in her affidavit
In the case at bar, the decision of the NLRC was promulgated on July 3, (Rollo, p. 36) that the total purchase price of P1,680.00 was paid by
1987. Accordingly, this case falls squarely under the rulings of the respondent Mercado as agreed upon. The alleged discount given by Mrs.
aforementioned cases. Nodado is not supported by evidence as well as the alleged appropriation
As regards the second issue, the record shows that PNOC-EDC's of P8.66 from the cost of fabrication of rubber stamps. The Labor Arbiter,
accusations of dishonesty and violations of company rules are not likewise, found no evidence to support the alleged violation of company
supported by evidence. Nonetheless, while acknowledging the rule that rules. On the contrary, he found respondent Mercado's explanation in his
administrative bodies are not governed by the strict rules of evidence, affidavit (Rollo, pp. 38-40) as to the alleged violations to be satisfactory.
petitioner PNOC-EDC alleges that the labor arbiter's propensity to decide Moreover, these findings were never contradicted by petitioner petitioner
the case through the position papers submitted by the parties is violative PNOC-EDC.
of due process thereby rendering the decision null and void (Ibid., p. PREMISES CONSIDERED, the petition is DENIED and the resolution of
196). respondent NLRC dated July 3, 1987 is AFFIRMED with the modification
On the other hand, private respondent contends that as can be seen from that the moral damages are reduced to Ten Thousand (P10,000.00)
petitioner's Motion for Reconsideration and/or Appeal dated July 28, 1986 Pesos, and the exemplary damages reduced to Five Thousand
(Annex "F" of the Petition, Rollo, pp. 57- 64), the latter never questioned (P5,000.00) Pesos.
the findings of facts of the Labor Arbiter but simply limited its objection SO ORDERED.
to the lack of legal basis in view of its stand that the NLRC had no
jurisdiction over the case (Private Respondent's Memorandum, Rollo, p. International Catholic Migration Commission vs. Calleja, GR No.
104). 85750 September 28, 1990
Petitioner PNOC-EDC filed its Position Paper/Motion to Dismiss dated FACTS:
January 15, 1986 (Annex "C" of the Petition Rollo, pp. 41-45) before the 1. GR # 85750- the Catholic Migration Commission (ICMC) case.
Regional Arbitration Branch No. VII of Cebu City and its Motion for ICMC was one of those accredited by the Philippine government to
Reconsideration and/or Appeal dated July 28, 1986 (Annex "F" of the operate the refugee processing center in Morong, Bataan. That comes
Petition, Rollo, pp. 57-64) before the NLRC of Cebu City. Indisputably, from an argument between the Philippine government and the United
the requirements of due process are satisfied when the parties are given Nations High Commissioner for refugees for eventual resettlement to
an opportunity to submit position papers. What the fundamental law other countries was to be established in Bataan.
abhors is not the absence of previous notice but rather the absolute lack ICMC was duly registered with the United Nations Economic and Social
of opportunity to ventilate a party's side. There is no denial of due Council and enjoys consultative status. As an international organization
process where the party submitted its position paper and flied its motion rendering voluntary and humanitarian services in the Philippines, its
 activities are parallel to those of the international committee for purposes which is to avoid the danger of partiality and interference by
migration and the international of the red cross. the host country in their internal workings.
On July 14,1986, Trade Unions of the Philippines and Allied for Employees are not without recourse whenever there are disputes to be
certification with the then Ministry of Labor and Employment a petition settled because each specialized agency shall make provision for
for certification election among the rank and file members employed by appropriate modes of settlement of disputes out of contracts or other
ICMC. The latter opposed the petition on the ground that it is an disputes of private character to which the specialized agency is a party.
international organization registered with the United Nations and hence, Moreover, pursuant to article IV of memorandum of abuse of privilege by
enjoys diplomatic immunity. ICMC, the government is free to withdraw the privileges and immunities
The Med-Arbiter sustained ICMC and dismissed the petition for each of accorded.
jurisdiction. On appeal by TUPAS, Director Calleja, reversed the Med- No grave abuse of discretion may be imputed to respondent secretary of
arbiter’s decision and ordered the immediate conduct of a certification labor in his assumption of appelate jurisdiction, contrary to Kapisanan’s
election. ICMC then sought the immediate dismissal of the TUPAS petition allegation, hence, any party to an election may appeal the order or
for certification election involving the immunity expressly granted but the results of the elections as determined by the med-arbiter directly to the
same was denied. With intervention of department of foreign affairs who secretary of labor and employment on the ground that the rules and
was legal interest in the outcome of this case, the second division gave regulations or parts thereof established by the secretary of labor and
due to the ICMC petition and required the submittal of memoranda by employment for the conduct of the election have been violated.
the parties. Wherefore, petition granted in ICMC case and in IRRI case, the petition
1. GR # 89331- the IRRI case was dismissed.
The International Rice Research Institute was a fruit of memorandum of
understanding between the Philippine government and the Ford and Virgilio Callanta vs. Carnation Philippines Inc.
Rochefeller Foundations. It was intended to be an autonomous, GR No. 70615, Oct. 28, 1986
philanthropic tax-free, non-profit, non stock organization designed to
carry out the principal objective of conducting “ basic research on the rice Facts:
plant.” 1. Petitioner Virgillio Callanta was employed by Carnation Philippines, Inc.
It was organized and registered with the SEC as a private corporation as a salesman in the Agusan del Sur Area. Five years later or June 1,
subject to all laws and regulations. However, by virtue of P.D no. 1620, 1979, respondent Carnation filed with the Ministry of Labor and
IRRI was granted the status, prerogatives, privileges and immunities of Employment (MOLE), Regional Office X, an application for clearance to
an international organization. terminate the employment of Virgillio Callanta on the alleged grounds of
The Kapisanan filed a petition for direct certification election with regional serious misconduct and misappropriation of company funds amounting to
office of the Department of Labor and Employment. IRRI opposed the P12,000.00 more or less.
petition invoking Pres. Decree no.1620 conferring upon it the status of an
international organization and granting it immunity from all civil, 2. On June 26, 1979 MOLE approved the said clearance and Virgillio
criminal, and administrative proceedings under Philippine laws. The Med- Callanta was terminated effective June 1, 1979.
Arbiter upheld the opposition on the basis of PD 1620 and dismissed the
petition for direct certification. 3. On July 5, 1982, Callanta filed with MOLE Regional Office X, a
On appeal by BLR Director, set aside the med-arbiter’s decision and complaint for illegal dismissal with claims for reinstatement, back wages
contends that immunities and privileges granted to IRRI do not include and damages against respondent Carnation.
exemption from coverage of our labor laws.
ISSUES: 4. On October 5, 1982- Carnation put in issue the timeliness of
GR # 85750- the ICMC case: Callanta’s complaint, alleging that the same is barred by prescription for
Whether or not the grant of diplomatic privileges and immunities to ICMC having been filed more than three years after Callanta’s dismissal.
extends to immunity from the application of Philippine labor laws.
GR no. 89331- the IRRI case: 5. On March 24, 1983- Labor Arbiter Pedro C. Ramos ruled in favor of
Whether or not the Secretary of Labor committed grave abuse of Callanta and ordered re-instatement.
discretion in dismissing the petition for certification election filed by
Kapisanan. 6. On April 18, 1983, respondent Carnation appealed to respondent
RULING: National Labor Relations Commission [NLRC].
The grant of diplomatic privileges and immunities to ICMC extends to
immunity from the application of Philippine labor laws, because it is
clearly necessitated by their international character and respective
7. NLRC set aside the decision of the Labor Arbiter and it declared that The Supreme Court Find for Callanta.
the complaint for illegal dismissal filed by Virgilio Callanta to have already
prescribed. It reasoned that, the dismissal without just cause of an employee from
his employment constitutes a violation of the Labor Code and its
Labor Code provides that: implementing rules and regulations.
Art. 291. Offenses. — Offenses penalized under this Code and the
rules and regulations issued pursuant thereto shall Such violation, however, does not amount to an "offense" as
prescribe in three [3] years. understood under Article 291 of the Labor Code.
The confusion arises over the use of the term "illegal dismissal" which
Art. 292. Money claims. — All money claims arising from creates the impression that termination of an employment without just
employer- employee relations accruing during the effectivity of this cause constitutes an offense.
Code shall be filed within three [3] years from the time the cause of
action accrued; otherwise, they shall be forever barred. It must be noted, however that unlike in cases of commission of any of
the prohibited activities during strikes or lockouts under Article 265,
Callanta filed a petition in the Supreme Court. unfair labor practices under Article 248, 249 and 250 and illegal
recruitment activities under Article 38, among others, which the Code
Issue: Whether or not Callanta’s case of illegal dismissal prescribes in 3 itself declares to be unlawful, termination of an employment without
years, pursuant to Art. 291 and Art. 292 of the Labor Code. just or valid cause is not categorized as an unlawful practice.

Callanta’s Contention: In the case, of illegal dismissal, no penalty of fine nor imprisonment is
imposed on the employer upon a finding of illegality in the dismissal. By
Callanta contends that since the Labor Code is silent as to the the very nature of the reliefs sought, therefore, an action for illegal
prescriptive period of an action for illegal dismissal with claims for dismissal cannot be generally categorized as an "offense" as used under
reinstatement, backwages and damages, the applicable law, by way of Article 291 of the Labor Code, which must be brought within the period of
supplement, is Article 1146 of the New Civil Code which provides a three[3] years from the time the cause of action accrued, otherwise, the
four [4]-year prescriptive period for an action predicated upon "an same is forever barred.
injury to the rights of the plaintiff".
The case of Valencia vs. Cebu Portland Cement, et al., 106 Phil.
He added that, an action for illegal dismissal is neither a "penal 732, a 1959 case cited by petitioner, is applicable in the instant case
offense" nor a mere "money claim," as contemplated under Articles insofar as it concerns the issue of prescription of actions.
291 and 292, respectively, of the Labor Code.
In said case, this Court had occasion to hold that an action for damages
Petitioner further claims that an action for illegal dismissal is a more involving a plaintiff seperated from his employment for alleged
serious violation of the rights of an employee as it deprives him of his unjustifiable causes is one for " injury to the rights of the plaintiff,
means of livelihood; thus, it should correspondingly have a prescriptive and must be brought within four [4] years.
period longer than the three [ 3] years provided for in "money claims."
Art. 1146. The following actions must be instituted within four
Carnation Phil.’s Contention years.

Carnation, counters that a case for illegal dismissal falls under the [1] Upon an injury to the rights of the plaintiff.
general category of "offenses penalized under this Code and the
rules and regulations pursuant thereto" provided under Article 291 SC grant the petition and the decision of the NLRC was reversed and set
or a money claim under Article 292, so that petitioner's complaint for aside.
illegal dismissal filed on July 5, 1982, or three [3] years, one [1]
month and five [5] days after his alleged dismissal on June 1, 1979, [G.R. No. 185556, March 28 : 2011] (NO DIGEST)
was filed beyond the three-year prescriptive period as provided under SUPREME STEEL CORPORATION, PETITIONER, VS.
Labor Code, hence, barred by prescription; NAGKAKAISANG MANGGAGAWA NG SUPREME INDEPENDENT
UNION (NMS-IND-APL), RESPONDENT.
SC’s Decision:
This petition for review on certiorari assails the Court of Appeals (CA) stipulated increase for the years 2003 to 2005.[6]
Decision[1] dated September 30, 2008, and Resolution dated December
4, 2008, which affirmed the finding of the National Labor Relations B. Contracting-out labor
Commission (NLRC) that petitioner violated certain provisions of the Article II, Section 6 of the CBA provides:
Collective Bargaining Agreement (CBA). Section 6. Prohibition of Contracting Out of Work of Members of
Bargaining Unit. Thirty (30) days from the signing of this CBA,
Petitioner Supreme Steel Pipe Corporation is a domestic corporation contractual employees in all departments, except Warehouse and Packing
engaged in the business of manufacturing steel pipes for domestic and Section, shall be phased out. Those contractual employees who are
foreign markets. Respondent Nagkakaisang Manggagawa ng Supreme presently in the workforce of the COMPANY shall no longer be allowed to
Independent Union is the certified bargaining agent of petitioner's rank- work after the expiration of their contracts without prejudice to being
and-file employees. The CBA in question was executed by the parties to hired as probationary employees of the COMPANY.[7]
cover the period from June 1, 2003 to May 31, 2008.
The Case Respondent claimed that, contrary to this provision, petitioner hired
temporary workers for five months based on uniformly worded
On July 27, 2005, respondent filed a notice of strike with the National employment contracts, renewable for five months, and assigned them to
Conciliation and Mediation Board (NCMB) on the ground that petitioner almost all of the departments in the company. It pointed out that, under
violated certain provisions of the CBA. The parties failed to settle their the CBA, temporary workers are allowed only in the Warehouse and
dispute. Consequently, the Secretary of Labor certified the case to the Packing Section; consequently, employment of contractual employees
NLRC for compulsory arbitration pursuant to Article 263(g) of the Labor outside this section, whether direct or agency-hired, was absolutely
Code. prohibited. Worse, petitioner never regularized them even if the position
they occupied and the services they performed were necessary and
Respondent alleged eleven CBA violations, delineated as follows: desirable to its business. Upon the expiration of their contracts, these
workers would be replaced with other workers with the same
A. Denial to four employees of the CBA- provided wage increase employment status. This scheme is a clear circumvention of the laws on
regular employment. [8]
Article XII, Section 1 of the CBA provides:
Section 1. The COMPANY shall grant a general wage increase, over and Respondent argued that the right to self-organization goes beyond the
above to all employees, according to the following schedule: maintenance of union membership. It emphasized that the CBA
A. Effective June 1, 2003 P14.00 per working day; maintains a union shop clause which gives the regular employees 30
B. Effective June 1, 2004 P12.00 per working day; and days within which to join respondent as a condition for their continued
C. Effective June 1, 2005 P12.00 per working day.[3] employment. Respondent maintained that petitioner's persistent refusal
to grant regular status to its employees, such as Dindo Buella, who is
Respondent alleged that petitioner has repeatedly denied the annual CBA assigned in the Galvanizing Department, violates the employees' right to
increases to at least four individuals: Juan Niño, Reynaldo Acosta, self-organization in two ways: (1) they are deprived of a representative
Rommel Talavera, and Eddie Dalagon. According to respondent, for collective bargaining purposes; and (2) respondent is deprived the
petitioner gives an anniversary increase to its employees upon reaching right to expand its membership. Respondent contended that a union's
their first year of employment. The four employees received their strength lies in its number, which becomes crucial especially during
respective anniversary increases and petitioner used such anniversary negotiations; after all, an employer will not bargain seriously with a union
increase to justify the denial of their CBA increase for the year.[4] whose membership constitutes a minority of the total workforce of the
company. According to respondent, out of the 500 employees of the
Petitioner explained that it has been the company's long standing company, only 147 are union members, and at least 60 employees would
practice that upon reaching one year of service, a wage adjustment is have been eligible for union membership had they been recognized as
granted, and, once wages are adjusted, the increase provided for in the regular employees.[9]
CBA for that year is no longer implemented. Petitioner claimed that this
practice was not objected to by respondent as evidenced by the For its part, petitioner admitted that it hired temporary workers. It
employees' pay slips.[5] purportedly did so to cope with the seasonal increase of the job orders
from abroad. In order to comply with the job orders, petitioner hired the
Respondent countered that petitioner failed to prove that, as a matter of temporary workers to help the regular workers in the production of steel
company practice, the anniversary increase took the place of the CBA pipes. Petitioner maintained that these workers do not affect
increase. It contended that all employees should receive the CBA respondent's membership. Petitioner claimed that it agreed to terminate
these temporary employees on the condition that the regular employees confined in a hospital.[17]
would have to perform the work that these employees were performing,
but respondent refused. Respondent's refusal allegedly proved that E. Failure to comply with the
petitioner was not contracting out the services being performed by union time-off with pay provision
members. Finally, petitioner insisted that the hiring of temporary workers
is a management prerogative.[10] Article II, Section 8 of the CBA provides:
Section 8. Time-Off with Pay. The COMPANY shall grant to the
C. Failure to provide shuttle service UNION's duly authorized representative/s or to any employee who are on
duty, if summoned by the UNION to testify, if his/her presence is
Petitioner has allegedly reneged on its obligation to provide shuttle necessary, a paid time-off for the handling of grievances, cases,
service for its employees pursuant to Article XIV, Section 7 of the CBA, investigations, labor-management conferences provided that if the venue
which provides: of the case is outside Company premises involving [the] implementation
Section 7. Shuttle Service. As per company practice, once the and interpretation of the CBA, two (2) representatives of the UNION who
company vehicle used for the purpose has been reconditioned.[11] will attend the said hearing shall be considered time-off with pay. If an
employee on a night shift attends grievance on labor-related cases and
Respondent claimed that the company vehicle which would be used as could not report for work due to physical condition, he may avail of union
shuttle service for its employees has not been reconditioned by petitioner leave without need of the two (2) days prior notice.[18]
since the signing of the CBA on February 26, 2004.[12] Petitioner
explained that it is difficult to implement this provision and simply denied Respondent contended that under the said provision, petitioner was
that it has reneged on its obligation.[13] obliged to grant a paid time-off to respondent's duly authorized
representative or to any employee who was on duty, when summoned by
D. Refusal to answer for the medical respondent to testify or when the employee's presence was necessary in
expenses incurred by three employees the grievance hearings, meetings, or investigations.[19]

Respondent asserted that petitioner is liable for the expenses incurred by Petitioner admitted that it did not honor the claim for wages of the union
three employees who were injured while in the company premises. This officers who attended the grievance meetings because these meetings
liability allegedly stems from Article VIII, Section 4 of the CBA which were initiated by respondent itself. It argued that since the
provides: union officers were performing their functions as such, and not as
Section 4. The COMPANY agrees to provide first aid medicine and first employees of the company, the latter should not be liable. Petitioner
aid service and consultation free of charge to all its employees.[14] further asserted that it is not liable to pay the wages of the union officers
when the meetings are held beyond company time (3:00 p.m.). It
According to respondent, petitioner's definition of what constitutes first claimed that time-off with pay is allowed only if the venue of the meeting
aid service is limited to the bare minimum of treating injured employees is outside company premises and the meeting involves the
while still within the company premises and referring the injured implementation and interpretation of the CBA.
employee to the Chinese General Hospital for treatment, but the travel
expense in going to the hospital is charged to the employee. Thus, when In reply, respondent averred that the above quoted provision does not
Alberto Guevarra and Job Canizares, union members, were injured, they make a qualification that the meetings should be held during office hours
had to pay P90.00 each for transportation expenses in going to the (7:00 a.m. to 3:00 p.m.); hence, for as long as the presence of the
hospital for treatment and going back to the company thereafter. In the employee is needed, time spent during the grievance meeting should be
case of Rodrigo Solitario, petitioner did not even shoulder the cost of the paid.[21]
first aid medicine, amounting to P2,113.00, even if he was injured during
the company sportsfest, but the amount was deducted, instead, from his F. Visitors' free access to
salary. Respondent insisted that this violates the above cited provision of company premises
the CBA.[15]
Respondent charged petitioner with violation of Article II, Section 7 of the
Petitioner insisted that it provided medicine and first aid assistance to CBA which provides:
Rodrigo Solitario. It alleged that the latter cannot claim Section 7. Free Access to Company Premises. Local Union and
hospitalization Federation officers (subject to company's security measure) shall be
allowed during working hours to enter the COMPANY premises for the
benefits under Article VIII, Section 1[16] of the CBA because he was not following reasons:
a. To investigate grievances that have arisen; physician, Lucy Anne E. Mamba, M.D., Jose R. Reyes Memorial Medical
b. To interview Union Officers, Stewards and members during reasonable Center dated March 7, 2005 with the following diagnosis:
hours; and `Diabetes Mellitus Type 2'
c. To attend to any meeting called by the Management or the UNION.[22]
G. Failure to comply with reporting Please be guided accordingly.[26]
time-off provision
Respondent contended that Madayag's dismissal from employment is
Respondent maintained that a brownout is covered by Article XII, Section illegal because petitioner failed to obtain a certification from a competent
3 of the CBA which states: public authority that his disease is of such nature or at such stage that it
Section 3. Reporting Time-Off. The employees who have reported for cannot be cured within six months even after proper medical treatment.
work but are unable to continue working because of emergencies such as Petitioner also failed to prove that Madayag's continued employment was
typhoons, flood, earthquake, transportation strike, where the COMPANY prejudicial to his health or that of his colleagues.[27]
is affected and in case of fire which occurs in the block where the home
of the employee is situated and not just across the street and serious Petitioner, on the other hand, alleged that Madayag was validly
illness of an immediate member of the family of the employee living with terminated under Art. 284[28] of the Labor Code and that his leg was
him/her and no one in the house can bring the sick family member to the amputated by reason of diabetes, which disease is not work-related.
hospital, shall be paid as follows: Petitioner claimed that it was willing to pay Madayag 13 days for every
a. At least half day if the work stoppage occurs within the first four (4) year of service but respondent was asking for additional benefits.[29]
hours of work; and
b. A whole day if the work stoppage occurs after four (4) hours of I. Denial of paternity leave
work.[23] benefit to two employees

Respondent averred that petitioner paid the employees' salaries for one Article XV, Section 2 of the CBA provides:
hour only of the four-hour brownout that occurred on July 25, 2005 and Section 2. Paternity Leave. As per law[,] [t]he Company shall, as
refused to pay for the remaining three hours. In defense, petitioner much as possible, pay paternity leave within 2 weeks from submission of
simply insisted that brownouts are not included in the above list of documents.[30]
emergencies.[24]
Petitioner admitted that it denied this benefit to the claimants for failure
Respondent rejoined that, under the principle of ejusdem generis, to observe the requirement provided in the Implementing Rules and
brownouts or power outages come within the "emergencies" Regulations of Republic Act No. 8187 (Paternity Leave Act of 1995), that
contemplated by the CBA provision. Although brownouts were not is, to notify the employer of the pregnancy of their wives and the
specifically identified as one of the emergencies listed in the said CBA expected date of delivery.[31]
provision, it cannot be denied that brownouts fall within the same kind or
class of the enumerated emergencies. Respondent maintained that the Respondent argued that petitioner is relying on technicalities by insisting
intention of the provision was to compensate the employees for that the denial was due to the two employees' failure to notify it of the
occurrences which are beyond their control, and power outage is one of pregnancy of their respective spouses. It maintained that the notification
such occurrences. It insisted that the list of emergencies is not an requirement runs counter to the spirit of the law. Respondent averred
exhaustive list but merely gives an idea as to what constitutes an actual that, on grounds of social justice, the oversight to notify petitioner should
emergency that is beyond the control of the employee.[25] not be dealt with severely by denying the two claimants this benefit.[32]

H. Dismissal of Diosdado Madayag J. Discrimination and

harassment
Diosdado Madayag was employed as welder by petitioner. He was served
a Notice of Termination dated March 14, 2005 which read: According to respondent, petitioner was contemptuous over union officers
Please consider this as a Notice of Termination of employment effective for protecting the rights of union members. In an affidavit executed by
March 14, 2005 under Art. 284 of the Labor Code and its Implementing Chito Guadaña, union secretary, he narrated that Alfred Navarro,
Rules. Officer-in-Charge of the Packing Department, had been harsh in dealing
with his fellow employees and would even challenge some workers to a
This is based on the medical certificate submitted by your attending fight. He averred that Navarro had an overbearing attitude during work
and grievance meetings. In November 2004, Navarro removed
Guadaña, a foreman, from his position and installed another foreman disbursement clerk and hiring staff, and Romeo T. Sy, Assistant
from another section. The action was allegedly brought about by earlier Personnel Manager. Aguilar explained that she did not mean to harass
grievances against Navarro's abuse. Petitioner confirmed his transfer to Masangcay, but she merely wanted to make sure that he would receive
another section in violation of Article VI, Section 6 of the CBA,[33] which his salary. Affiant Sy admitted that he refused to release Masangcay's
states in part: salary to a woman who presented herself as his (Masangcay's) wife since
Section 6. Transfer of Employment. - No permanent positional nobody could attest to it. He claimed that such is not an act of
transfer outside can be effected by the COMPANY without discussing the harassment but a precautionary measure to protect Masangcay's
grounds before the Grievance Committee. All transfer shall be with interest.[39]
advance notice of two (2) weeks. No transfer shall interfere with the
employee's exercise of the right to self-organization.[34] K. Non-implementation of COLA in
Wage Order Nos. RBIII-10 and 11
Respondent also alleged that Ariel Marigondon, union president, was also
penalized for working for his fellow employees. One time, Marigondon Respondent posited that any form of wage increase granted through the
inquired from management about matters concerning tax discrepancies CBA should not be treated as compliance with the wage increase given
because it appeared that non-taxable items were included as part of through the wage boards. Respondent claimed that, for a number of
taxable income. Thereafter, Marigondon was transferred from one area of years, petitioner has complied with Article XII, Section 2 of the CBA
operation to another until he was allegedly forced to accept menial jobs which provides:
of putting control tags on steel pipes, a kind of job which did not require Section 2. All salary increase granted by the COMPANY shall not be
his 16 years of expertise in examining steel pipes.[35] credited to any future contractual or legislated wage increases. Both
increases shall be implemented separate and distinct from the increases
Edgardo Masangcay, respondent's Second Vice President, executed an stated in this Agreement. It should be understood by both parties that
affidavit wherein he cited three instances when his salary was withheld contractual salary increase are separate and distinct from legislated wage
by petitioner. The first incident happened on May 28, 2005 when increases, thus the increase brought by the latter shall be enjoyed also
petitioner refused to give his salary to his wife despite presentation of a by all covered employees.[40]
proof of identification (ID) and letter of authorization. On June 18, 2005,
petitioner also refused to release his salary to Pascual Lazaro despite Respondent maintained that for every wage order that was issued in
submission of a letter of authority and his ID and, as a result, he was Region 3, petitioner never hesitated to comply and grant a similar
unable to buy medicine for his child who was suffering from asthma increase. Specifically, respondent cited petitioner's compliance with Wage
attack. The third instance happened on June 25, 2005 when his salary Order No. RBIII-10 and grant of the mandated P15.00 cost of living
was short of P450.00; this amount was however released the following allowance (COLA) to all its employees. Petitioner, however, stopped
week.[36] implementing it to non-minimum wage earners on July 24, 2005. It
contended that this violates Article 100 of the Labor Code which prohibits
Petitioner explained that the transfer of the employee from one the diminution of benefits already enjoyed by the workers and that such
department to another was the result of downsizing the Warehouse grant of benefits had already ripened into a company practice.[41]
Department, which is a valid exercise of management prerogative. In
Guadaña's case, Navarro denied that he was being harsh but claimed Petitioner explained that the COLA provided under Wage Order No. RBIII-
that he merely wanted to stress some points. Petitioner explained that 10 applies to minimum wage earners only and that, by mistake, it
Guadaña was transferred when the section where he was assigned was implemented the same across the board or to all its employees. After
phased out due to the installation of new machines. Petitioner pointed realizing its mistake, it stopped integrating the COLA to the basic pay of
out that the other workers assigned in said section were also the workers who were earning above the minimum wage.[42]
transferred.[37] The NLRC's Ruling
Out of the eleven issues raised by respondent, eight were decided in its
For the petitioner, Emmanuel Mendiola, Production Superintendent, also favor; two (denial of paternity leave benefit and discrimination of union
executed an affidavit attesting that the allegation of Ariel Marigondon, members) were decided in favor of petitioner; while the issue on visitor's
that he was harassed and was a victim of discrimination for being free access to company premises was deemed settled during the
respondent's President, had no basis. Marigondon pointed out that after mandatory conference. The dispositive portion of the NLRC Decision
the job order was completed, he was reassigned to his original shift and dated March 30, 2007 reads:
group.[38] WHEREFORE, Supreme Steel Pipe Corporation (the Company) is hereby
ordered to:
Petitioner also submitted the affidavits of Elizabeth Llaneta Aguilar,
1) implement general wage increase to Juan Niño, Eddie Dalagon and 14) Sacmar, Roberto - P108.9375
Rommel Talavera pursuant to the CBA in June 2003, 2004 and 2005; 15) Tagle, Farian - P129.3375
16) Villavicencio, Victor - P126.015
2) regularize workers Dindo Buella and 60 other workers and to respect 17) Agra, Romale - P126.015
CBA provision on contracting-out labor; 18) Basabe, Luis - P128.5575
19) Bornasal, Joel - P127.53
3) recondition the company vehicle pursuant to the CBA; 20) Casitas, Santiago - P128.5575
21) Celajes, Bonifacio - P128.1825
4) answer for expenses involved in providing first aid services including 22) Avenido, Jerry - P133.2487
transportation expenses for this purpose, as well as to reimburse Rodrigo 23) Gagarin, Alfredo - P108.9375
Solitario the sum of P2,113.00; 24) Layson, Paulo - P131.745
25) Lledo, Asalem - P128.5575
5) pay wages of union members/officers who attended grievance 26) Marigondon, Ariel - P131.745
meetings as follows: 27) Orcena, Sonnie - P126.015
1) D. Serenilla - P115.24375 28) Servano, Fernando - P126.015
2) D. Miralpes - P115.80625 29) Versola, Rodrigo - P126.015
3) E. Mallari - P108.7625
4) C. Cruz - P114.65313 7) reinstate Diosdado Madayag to his former position without loss of
5) J. Patalbo - P161.0625 seniority rights and to pay full backwages and other benefits from 14
6) J.J. Muñoz - P111.19375 March 2005, date of dismissal, until the date of this Decision; if
7) C. Guadaña - P56.94375 reinstatement is impossible[,] to pay separation pay of one month pay
8) J. Patalbo - P161.0625 for every year of service in addition to backwages;
9) E. Mallari - P108.7625 8) dismiss the claim for paternity leave for failure of claimants to observe
10) C. Guadaña - P113.8875 the requirements;
11) A. Marigondon - P170.30625 9) dismiss the charge of harassment and discrimination for lack of merit;
12) A. Marigondon - P181.66 and to
13) A. Marigondon - P181.66 10) continue to implement COLA under Wage Order Nos. [RBIII]-10 & 11
14) E. Masangcay - P175.75 across the board.
15) A. Marigondon - P181.66 The issue on Visitors' Free Access to Company Premises is dismissed for
16) E. Masangcay - P175.75 being moot and academic after it was settled during the scheduled
17) A. Marigondon - P181.66 conferences.
18) F. Servano - P174.02
19) R. Estrella - P181.50 SO ORDERED.
20) A. Marigondon - P181.66
Forthwith, petitioner elevated the case to the CA, reiterating its
6) pay workers their salary for the 3 hours of the 4 hour brownout as arguments on the eight issues resolved by the NLRC in respondent's
follows: favor.
1) Alagon, Jr., Pedro - P130.0875 The CA's Ruling
2) Aliwalas, Cristeto - P108.5625
3) Baltazar, Roderick - P 90.1875 On September 30, 2008, the CA rendered a decision dismissing the
4) Bañez, Oliver - P 90.9375 petition, thus:
5) Prucal, Eduardo - P126.015 WHEREFORE, premises considered, the present petition is hereby
6) Calimquin, Rodillo - P131.0362 DENIED DUE COURSE and accordingly DISMISSED, for lack of merit. The
7) Clave, Arturo - P125.64 assailed Decision dated March 30, 2007 and Resolution dated April 28,
8) Cadavero, Rey - P108.5625 2008 of the National Labor Relations Commission in NLRC NCR CC No.
9) De Leon, Romulo - P124.35 000305-05 are hereby AFFIRMED.
10) Lactao, Noli - P126.015
11) Layco, Jr., Dandino - P130.5375 With costs against the petitioner.
12) Legaspi, Melencio - P127.63
13) Quiachon, Rogelio - P130.5525 SO ORDERED.
According to the CA, petitioner failed to show that the NLRC committed Dissatisfied, petitioner filed this petition for review on certiorari,
grave abuse of discretion in finding that it violated certain provisions of contending that the CA erred in finding that it violated certain provisions
the CBA. The NLRC correctly held that every employee is entitled to the of the CBA.
wage increase under the CBA despite receipt of an anniversary The Court's Ruling
increase. The CA concluded that, based on the wording of the CBA, The petition is partly meritorious.
which uses the words "general increase" and "over and above," it cannot
be said that the parties have intended the anniversary increase to be It is a familiar and fundamental doctrine in labor law that the CBA is the
given in lieu of the CBA wage increase.[45] law between the parties and compliance therewith is mandated by the
express policy of the law. If the terms of a CBA are clear and there is no
The CA declared that the withdrawal of the COLA under Wage Order No. doubt as to the intention of the contracting parties, the literal meaning of
RBIII-10 from the employees who were not minimum wage earners its stipulation shall prevail.[54] Moreover, the CBA must be construed
amounted to a diminution of benefits because such grant has already liberally rather than narrowly and technically and the Court must place a
ripened into a company practice. It pointed out that there was no practical and realistic construction upon it.[55] Any doubt in the
ambiguity or doubt as to who were covered by the wage order. interpretation of any law or provision affecting labor should be resolved
Petitioner, therefore, may not invoke error or mistake in extending the in favor of labor.[56]
COLA to all employees and such act can only be construed as "as a
voluntary act on the part of the employer."[46] The CA opined that, Upon these well-established precepts, we sustain the CA's findings and
considering the foregoing, the ruling in Globe Mackay Cable and Radio conclusions on all the issues, except the issue pertaining to the denial of
Corp. v. NLRC[47] clearly did not apply as there was no doubtful or the COLA under Wage Order No. RBIII-10 and 11 to the employees who
difficult question involved in the present case.[48] are not minimum wage earners.

The CA sustained the NLRC's interpretation of Art. VIII, Section 4 of the The wording of the CBA on general wage increase cannot be interpreted
CBA as including the expenses for first aid medicine and transportation any other way: The CBA increase should be given to all employees "over
cost in going to the hospital. The CA stressed that the CBA should be and above" the amount they are receiving, even if that amount already
construed liberally rather than narrowly and technically, and the courts includes an anniversary increase. Stipulations in a contract must be read
must place a practical and realistic construction upon it, giving due together, not in isolation from one another.[57] Consideration of Article
consideration to the context in which it was negotiated and the purpose XIII, Section 2 (non-crediting provision), bolsters such interpretation.
which it intended to serve.[49] Section 2 states that "[a]ll salary increase granted by the company shall
not be credited to any future contractual or legislated wage increases."
Based on the principle of liberal construction of the CBA, the CA likewise Clearly then, even if petitioner had already awarded an anniversary
sustained the NLRC's rulings on the issues pertaining to the shuttle increase to its employees, such increase cannot be credited to the
service, time-off for attendance in grievance meetings/hearings, and "contractual" increase as provided in the CBA, which is considered
time-off due to brownouts.[50] "separate and distinct."

The CA further held that management prerogative is not unlimited: it is Petitioner claims that it has been the company practice to offset the
subject to limitations found in law, a CBA, or the general principles of fair anniversary increase with the CBA increase. It however failed to prove
play and justice. It stressed that the CBA provided such limitation on such material fact. Company practice, just like any other fact, habits,
management prerogative to contract-out labor, and compliance with the customs, usage or patterns of conduct must be proven. The offering
CBA is mandated by the express policy of the law. party must allege and prove specific, repetitive conduct that might
constitute evidence of habit,[58] or company practice. Evidently, the pay
Finally, the CA affirmed the NLRC's finding that Madayag's dismissal was slips of the four employees do not serve as sufficient proof.
illegal. It emphasized that the burden to prove that the employee's
disease is of such nature or at such stage that it cannot be cured within a Petitioner's excuse in not providing a shuttle service to its employees is
period of six months rests on the employer. Petitioner failed to submit a unacceptable. In fact, it can hardly be considered as an excuse.
certification from a competent public authority attesting to such fact; Petitioner simply says that it is difficult to implement the provision. It
hence, Madayag's dismissal is illegal.[52] relies on the fact that "no time element [is] explicitly stated [in the CBA]
within which to fulfill the undertaking." We cannot allow petitioner to
Petitioner moved for a reconsideration of the CA's decision. On December dillydally in complying with its obligation and take undue advantage of
4, 2008, the CA denied the motion for lack of merit.[53] the fact that no period is provided in the CBA. Petitioner should
recondition the company vehicle at once, lest it be charged with and Again, on the issue of contracting-out labor, we sustain the CA.
found guilty of unfair labor practice. Petitioner, in effect, admits having hired "temporary" employees, but it
maintains that it was an exercise of management prerogative,
Petitioner gave a narrow construction to the wording of the CBA when it necessitated by the increase in demand for its product.
denied (a) reimbursement for the first-aid medicines taken by Rodrigo
Solitario when he was injured during the company sportsfest and the Indeed, jurisprudence recognizes the right to exercise management
transportation cost incurred by Alberto Guevara and Job Canizares in prerogative. Labor laws also discourage interference with an employer's
going to the hospital, (b) payment of the wages of certain employees judgment in the conduct of its business. For this reason, the Court often
during the time they spent at the grievance meetings, and (c) payment declines to interfere in legitimate business decisions of employers. The
of the employees' wages during the brownout that occurred on July 25, law must protect not only the welfare of employees, but also the right of
2002. As previously stated, the CBA must be construed liberally rather employers.[63] However, the exercise of management prerogative is not
than narrowly and technically. It is the duty of the courts to place a unlimited. Managerial prerogatives are subject to limitations provided by
practical and realistic construction upon the CBA, giving due law, collective bargaining agreements, and general principles of fair play
consideration to the context in which it is negotiated and the purpose and justice.[64] The CBA is the norm of conduct between the parties and,
which it is intended to serve. Absurd and illogical interpretations should as previously stated, compliance therewith is mandated by the express
be avoided.[59] A CBA, like any other contract, must be interpreted policy of the law.[65]
according to the intention of the parties.[60]
The CBA is clear in providing that temporary employees will no longer be
The CA was correct in pointing out that the concerned employees were allowed in the company except in the Warehouse and Packing Section.
not seeking hospitalization benefits under Article VIII, Section 1 of the Petitioner is bound by this provision. It cannot exempt itself from
CBA, but under Section 4 thereof; hence, confinement in a hospital is not compliance by invoking management prerogative. Management
a prerequisite for the claim. Petitioner should reimburse Solitario for the prerogative must take a backseat when faced with a CBA provision. If
first aid medicines; after all, it is the duty of the employer to maintain petitioner needed additional personnel to meet the increase in demand, it
first- aid medicines in its premises.[61] Similarly, Guevara and Canizares could have taken measures without violating the CBA.
should also be reimbursed for the transportation cost incurred in going to
the hospital. The Omnibus Rules Implementing the Labor Code provides Respondent claims that the temporary employees were hired on five-
that, where the employer does not have an emergency hospital in its month contracts, renewable for another five months. After the expiration
premises, the employer is obliged to transport an employee to the of the contracts, petitioner would hire other persons for the same work,
nearest hospital or clinic in case of emergency.[62] with the same employment status.

We likewise agree with the CA on the issue of nonpayment of the time-off Plainly, petitioner's scheme seeks to prevent employees from acquiring
for attending grievance meetings. The intention of the parties is the status of regular employees. But the Court has already held that,
obviously to compensate the employees for the time that they spend in a where from the circumstances it is apparent that the periods of
grievance meeting as the CBA provision categorically states that the employment have been imposed to preclude acquisition of security of
company will pay the employee "a paid time-off for handling of tenure by the employee, they should be struck down or disregarded as
grievances, investigations, labor-management conferences." It does not contrary to public policy and morals.[66] The primary standard to
make a qualification that such meeting should be held during office hours determine a regular employment is the reasonable connection between
or within the company premises. the particular activity performed by the employee in relation to the
business or trade of the employer. The test is whether the former is
The employees should also be compensated for the time they were usually necessary or desirable in the usual business or trade of the
prevented from working due to the brownout. The CBA enumerates some employer. If the employee has been performing the job for at least one
of the instances considered as "emergencies" and these are "typhoons, year, even if the performance is not continuous or merely intermittent,
flood earthquake, transportation strike." As correctly argued by the law deems the repeated and continuing need for its performance as
respondent, the CBA does not exclusively enumerate the situations which sufficient evidence of the necessity, if not indispensability, of that activity
are considered "emergencies." Obviously, the key element of the to the business of the employer. Hence, the employment is also
provision is that employees "who have reported for work are unable to considered regular, but only with respect to such activity and while such
continue working" because of the incident. It is therefore reasonable to activity exists.
conclude that brownout or power outage is considered an "emergency"
situation. We also uphold the CA's finding that Madayag's dismissal was illegal. It is
already settled that the burden to prove the validity of the dismissal rests
upon the employer. Dismissal based on Article 284 of the Labor Code is the board, which only lasted for less than a year, cannot be considered
no different, thus: as having been practiced "over a long period of time." While it is true
The law is unequivocal: the employer, before it can legally dismiss its that jurisprudence has not laid down any rule requiring a specific
employee on the ground of disease, must adduce a certification from a minimum number of years in order for a practice to be considered as a
competent public authority that the disease of which its employee is voluntary act of the employer, under existing jurisprudence on this
suffering is of such nature or at such a stage that it cannot be cured matter, an act carried out within less than a year would certainly not
within a period of six months even with proper treatment. qualify as such. Hence, the withdrawal of the COLA Wage Order No.
RBIII-10 from the salaries of non-minimum wage earners did not amount
xxxx to a "diminution of benefits" under the law.

In Triple Eight Integrated Services, Inc. v. NLRC, the Court explains why There is also no basis in enjoining petitioner to implement Wage Order
the submission of the requisite medical certificate is for the employer's No. RBIII-11 across the board. Similarly, no proof was presented
compliance, thus: showing that the implementation of wage orders across the board has
The requirement for a medical certificate under Article 284 of the Labor ripened into a company practice. In the same way that we required
Code cannot be dispensed with; otherwise, it would sanction the petitioner to prove the existence of a company practice when it alleged
unilateral and arbitrary determination by the employer of the gravity or the same as defense, at this instance, we also require respondent to
extent of the employee's illness and thus defeat the public policy on the show proof of the company practice as it is now the party claiming its
protection of labor. existence. Absent any proof of specific, repetitive conduct that might
xxxx constitute evidence of the practice, we cannot give credence to
However, with respect to the issue of whether the COLA under Wage respondent's claim. The isolated act of implementing a wage order
Order Nos. RBIII-10 and 11 should be implemented across the board, we across the board can hardly be considered a company practice,[71] more
hold a different view from that of the CA. No diminution of benefits would so when such implementation was erroneously made.
result if the wage orders are not implemented across the board, as no
such company practice has been established. WHEREFORE, premises considered, the petition is PARTIALLY
GRANTED. The CA Decision September 30, 2008 and Resolution dated
Diminution of benefits is the unilateral withdrawal by the employer of December 4, 2008 are AFFIRMED with MODIFICATION that the order
benefits already enjoyed by the employees. There is diminution of for petitioner to continue implementing Wage Order No. RBIII-10 and 11
benefits when it is shown that: (1) the grant or benefit is founded on a across the board is SET ASIDE. Accordingly, item 10 of the NLRC
policy or has ripened into a practice over a long period of time; (2) the Decision dated March 30, 2007 is modified to read "dismiss the claim for
practice is consistent and deliberate; (3) the practice is not due to error implementation of Wage Order Nos. RBIII-10 and 11 to the employees
in the construction or application of a doubtful or difficult question of law; who are not minimum wage earners."
and (4) the diminution or discontinuance is done unilaterally by the
employer. SO ORDERED.
Case Digest: Central azucarerra vs. Central azucarerra union-nlu
To recall, the CA arrived at its ruling by relying on the fact that there was CENTRAL AZUCARERA DE TARLAC,
no ambiguity in the wording of the wage order as to the employees vs. CENTRAL AZUCARERA DE TARLAC LABOR UNION-NLU,
covered by it. From this, the CA concluded that petitioner actually made
no error or mistake, but acted voluntarily, in granting the COLA to all its G.R. No. 188949, July 26, 2010
employees. It therefore took exception to the Globe Mackay case which,
according to it, applies only when there is a doubtful or difficult question Justice Nachura
involved.
Labor Law; Labor Standard; 13 month pay;
The CA failed to note that Globe Mackay primarily emphasized that, for
the grant of the benefit to be considered voluntary, "it should have been FACTS:
practiced over a long period of time, and must be shown to have been The formula used by petitioner in computing the 13th-month pay
consistent and deliberate." The fact that the practice must not have been was: Total Basic Annual Salary divided by twelve (12). Included in
due to error in the construction or application of a doubtful or difficult petitioner’s computation of the Total Basic Annual Salary were the
question of law is a distinct requirement. following: basic monthly salary; first eight (8) hours overtime pay on
Sunday and legal/special holiday; night premium pay; and vacation and
The implementation of the COLA under Wage Order No. RBIII-10 across
sick leaves for each year. Throughout the years, petitioner used this unilaterally by the employer because the benefit has become part of the
computation until 2006 from 1975. employment contract, written or unwritten.
After the strike and temporary cessation of operations in
2005, all the striking union was allowed to return to work. Subsequently, SC: company practice shall justify by the benefit of the
petitioner declared another temporary cessation of operations for the employees.
months of April and May 2006. After the suspension was lifted on June
2006, the workers were allowed to report for work on a fifteen day-per- [G.R. NO. 177705 : September 18, 2009] (NO DIGEST)
month rotation basis until September 2005. In December 2006, KIMBERLY-CLARK PHILIPPINES, INC. Petitioner, v. NORA
petitioner gave the employees their 13th-month pay based on the DIMAYUGA, ROSEMARIE C. GLORIA, and MARICAR C. DE
employee’s total earnings during the year divided by 12. In December GUIA, Respondents.
2006, petitioner gave the employees their 13th-month pay based on the Respondents were employees of Kimberly-Clark Philippines, Inc.
employee’s total earnings during the year divided by 12. (petitioner). Nora Dimayuga (Nora) was Cost Accounting Supervisor,
Respondent objected to this computation. It claimed that the Rosemarie Gloria (Rosemarie) was Business Analyst, and Maricar de Guia
divisor should have been eight (8) instead of 12, because the employees (Maricar) was General Accounting Manager.
worked for only 8 months in 2006. On September 19, 2002, Nora tendered her resignation effective October
Petitioner and respondent tried to thresh out their differences in 21, 2002.
accordance with the grievance procedure as provided in their collective On October 7, 2002, Rosemarie tendered her resignation, also effective
bargaining agreement. Despite four (4) conciliatory meetings, the parties October 21, 2002.
still failed to settle the dispute, hence a complaint by for money claims As petitioner had been experiencing a downward trend in its sales, it
based on the alleged diminution/erroneous computation of 13 th month created a tax-free early retirement package for its employees as a cost-
pay before the Labor arbiter (LA). cutting and streamlining measure. Twenty-four of its employees availed
The LA dismissed the complaint. NLRC reversed. MR denied. of the offer that was made available from November 10-30, 2002.
Petitioner then filed a petition for certiorari under Rule 65 of the Rules of Despite their resignation before the early retirement package was
Court before the CA. CA dismissed the petition and affirm the NLRC. offered, Nora and Rosemarie pleaded with petitioner that they be
Hence petition before the SC (R45) retroactively extended the benefits thereunder, to which petitioner
ISSUE: acceded. Hence, Nora received a total of P1,025,113.73 while Rosemarie
Whether the computation of 13th month pay by the petitioner is received a total of P1,006,493.94, in consideration of which they
correct. executed release and quitclaim deeds dated January 17, 2003 and
HELD: January 16, 2003, respectively.
YES. "Thirteenth-month pay" shall mean one twelfth (1/12) of On November 4, 2002, Maricar tendered her resignation effective
the basic salary of an employee within a calendar year; the term "basic December 1, 2002, citing career advancement as the reason therefor. As
salary" of an employee for the purpose of computing the 13th-month pay at the time of her resignation the early retirement package was still
was interpreted to include all remuneration or earnings paid by the effective, she received a total of P523,540.13 for which she signed a
employer for services rendered, but does not include allowances and release and quitclaim.
monetary benefits which are not integrated as part of the regular or basic On November 28, 2002, petitioner announced that in lieu of the merit
salary, such as the cash equivalent of unused vacation and sick leave increase which it did not give that year, it would provide economic
credits, overtime, premium, night differential and holiday pay, and cost- assistance, to be released the following day, to all monthly-paid
of-living allowances. However, these salary-related benefits should be employees on regular status as of November 16, 2002.
included as part of the basic salary in the computation of the 13th-month Still later or on January 16, 2003, petitioner announced that it would the
pay if, by individual or collective agreement, company practice or policy, grant a lump sum retirement pay in the amount of P200,000, in addition
the same are treated as part of the basic salary of the employees. to the early retirement package benefit, to those who signed up for early
As correctly ruled by the CA, the practice of petitioner in giving retirement and who would sign up until January 22, 2003.
13th-month pay based on the employees’ gross annual earnings which On May 23, 2003, respondents filed a Complaint, docketed as NLRC Case
included the basic monthly salary, premium pay for work on rest days No. RAB-IV 5-17522-03-L, before the National Labor Relations
and special holidays, night shift differential pay and holiday pay Commission (NLRC) Regional Arbitration Branch No. IV against petitioner
continued for almost thirty (30) years and has ripened into a company and its Finance Manager Fernando B. Gomez (Gomez) whom respondents
policy or practice which cannot be unilaterally withdrawn. Article 100 of alleged to be "responsible for the withholding of [their] additional
the Labor Code, otherwise known as the Non-Diminution Rule, mandates retirement benefits," claiming entitlement to the P200,000 lump sum
that benefits given to employees cannot be taken back or reduced retirement pay. Respondents Nora and Rosemarie additionally claimed
entitlement to the economic assistance.
By Decision of August 31, 2004, Labor Arbiter Generoso V. Santos And petitioner questions the application to the present case by the
dismissed the claims of Nora and Rosemarie, holding that they were not appellate court of the doctrine laid down in Businessday.
entitled to the P200,000 lump sum retirement pay, they having ceased to The petition is impressed with merit.
be employees of petitioner at the time it was offered or made effective on It is settled that entitlement of employees to retirement benefits must
January 16, 2003. He, however, granted Maricar's claim for the same specifically be granted under existing laws, a collective bargaining
pay, holding that she was entitled to it because at the time she resigned agreement or employment contract, or an established employer policy.
from the company effective December 1, 2002, such pay was already No law or collective bargaining agreement or other applicable contract, or
offered. Besides, the Labor Arbiter ruled, Maricar had a vested right to it an established company policy was existing during respondents'
as she was given a formal notice of her entitlement to it by petitioner, employment entitling them to the P200,000 lump-sum retirement pay.
through its Human Resources Director. Petitioner was not thus obliged to grant them such pay.
On appeal by both parties, the NLRC, by Decision of November 22, 2005, Respondents nevertheless argue that since other employees who
modified the Labor Arbiters Decision by ordering petitioner to pay resigned before the announcement of the grant of the lump sum
Nora P200,000 additional bonus and P2,880 economic assistance, and to retirement pay received the same, they (respondents) should also
pay Rosemarie P200,000 additional bonus and P2,656 economic receive it, citing the pronouncement in Businessday that:
assistance. It affirmed Maricar's entitlement to the lump sum retirement x x x The law requires an employer to extend equal treatment to its
pay. employees. It may not, in the guise of exercising management
Applying the ruling in Businessday Information Systems and Services, prerogatives, grant greater benefits to some and less to others.
Inc. v. NLRC (Businessday), the NLRC ratiocinated that petitioner's Management prerogatives are not absolute prerogatives but are subject
refusal to give Nora and Rosemarie the lump sum retirement pay was an to legal limits, collective bargaining agreements, or general principles of
act of discrimination, more so because a certain Oscar Diokno, another fair play and justice. (Underscoring supplied)
employee who presumably resigned also prior to January 16, 2003, was Respondents' reliance on Businessday is misplaced. The factual milieu in
given said benefit. Businessday is markedly different from that of the present case. That
As to the award of economic assistance, the NLRC held that Nora and case involved the retrenched employees' separation pay to which they
Rosemarie were also entitled to it as the same was given in lieu of the are entitled under Article 283 of the Labor Code. In the present case,
annual performance-based salary increase that was not given in 2002 Nora and Rosemarie resigned prior to petitioner's offer of the lump sum
and, therefore, already earned by them when they resigned. Petitioner's retirement pay as an incentive to those employees who would voluntarily
Motion for Reconsideration15 having been denied, it filed a Petition for avail of its early retirement scheme as a cost-cutting and streamlining
Certiorari17 before the Court of Appeals. measure. That respondents resigned, and not retrenched, is clear from
By Decision of January 19, 2007, the appellate court affirmed the NLRC their respective letters to petitioner. And nowhere in the letters is there
Decision. It held that, contrary to petitioner's assertion that the early any allegation that they resigned in view of the company's downward
retirement package was extended to respondents out of generosity, the trend in sales which necessitated downsizing or streamlining.
offer/grant thereof, as well as their inclusion in the termination report The appellate court's finding that petitioner's inclusion of Nora and
submitted to the Department of Labor and Employment, made them "full Rosemarie in the termination report submitted to the DOLE and its grant
retirees," hence, they must be given the other benefits extended to to them of the early retirement benefits made them "full retirees" to thus
petitioner's other employees, following the ruling in Businessday. entitle them to the same benefits offered to those who would voluntarily
The appellate court added that since respondents resigned from their resign after November 16, 2003 does not lie.
respective positions barely a month before the effectivity of the early Petitioner's claim that it allowed Nora and Rosemarie to avail of the early
retirement package, the general principles of fair play and justice dictate retirement package despite their previous separation from the company
that petitioner extend to them the same benefits in consideration of their out of pure generosity is well-taken in light of Nora's letter of September
long years of service. 15, 2002 asking if she could avail of the early retirement package as "it
The appellant court, noting that Nora and Rosemarie received would certainly be of great assistance to us financially." It is thus absurd
commendable ratings, upheld their entitlement to the economic to fault petitioner for acceding to such a request out of compassion by
assistance as their resignation before the grant of such benefit took directing it to pay additional benefits to resigned employees who are not
effect did not detract from the fact that it was in substitution of the entitled thereto.
traditional merit increase extended by petitioner to its employees with Petitioner's decision to extend the benefit to some former employees who
commendable or outstanding ratings which it failed to give in 2002. had already resigned before the offer of the lump sum pay incentive was
Petitioner's Motion for Reconsideration19 having been denied, it filed the thus an act of generosity which it is not obliged to extend to respondents.
present petition, insisting that Nora and Rosemarie are no longer entitled Apropos is this Court's ruling in Businessday:
to the economic assistance and lump sum pay considering that they were With regard to the private respondents' claim for the mid-year bonus, it
already retired and have in fact executed quitclaims and waivers. is settled doctrine that the grant of a bonus is a prerogative, not an
obligation, of the employer. The matter of giving a bonus over and above alleged having been compelled to sign the quitclaims, nor that the
the worker's lawful salaries and allowances is entirely dependent on the considerations thereof (P1,024,113.73 for Nora and P682,721.24 for
financial capability of the employer to give it. The fact that the company's Rosemarie) are unconscionable.
business was no longer profitable (it was in fact moribund) plus the fact As for Maricar's claim to the lump sum retirement pay, the Court finds
that the private respondents did not work up to the middle of the year that, like Nora and Rosemarie, she is not entitled to it. Although the
(they were discharged in May 1998) were valid reasons for not granting incentive was offered when she was still connected with petitioner,
them a mid-year bonus. Requiring the company to pay a mid-year bonus she resigned from employment, citing career advancement as the reason
to them also would in effect penalize the company for its generosity to therefor. Indubitably, the incentive was addressed to those employees
those workers who remained with the company "till the end" of its who, without prior plans of resigning, opted to terminate their
days. (Citations omitted) (Emphasis and underscoring supplied) employment in light of the downsizing being undertaken by petitioner. In
Neither are Nora and Rosemarie entitled to the economic assistance other words, Maricar resigned from petitioner in order to find gainful
which petitioner awarded to "all monthly employees who are under employment elsewhere - a reason which has no bearing on the financial
regular status as of November 16, 2002," they having resigned earlier or viability of petitioner.
on October 21, 2002. WHEREFORE, the petition is GRANTED. The Decision and Resolution of
Again, contrary to the appellate court's ruling that Nora and Rosemarie the Court of Appeals dated January 19, 2007 and April 30, 2007,
already earned the economic assistance, the same having been given in respectively, are REVERSED and SET ASIDE. NLRC Case No. RAB-IV-
lieu of the performance-based annual salary increase, the Court finds 17522-03-L is DISMISSED.
that the economic assistance was a bonus over and above the SO ORDERED.
employees' salaries and allowances. A perusal of the memorandum
regarding the grant of economic assistance shows that it was granted in ORLANDO FARM GROWERS ASSOCIATION/GLICERIO AÑOVER
lieu of salary increase (the grant of which depends on petitioner's vs.NLRC (5th Division) (by Cris Figueroa)
financial capability) and that it was not intended to be a counterpart of GR No. 129076
the Collective Bargaining Agreement grant to members of the K-CPI Facts:
union. The grant of economic assistance to all monthly employees under 1. Petitioner Orlando Farm Growers Association (Anover is the president) is
regular status as of November 16, 2002 was thus well within petitioner's an association of landowners engaged in the production of export quality
prerogatives. Moreover, petitioner's decision to give economic assistance bananas located in Kinamayan, Sto. Tomas, Davao del Norte, established
was arrived at more than a month after respondents' resignation and, for the sole purpose of dealing collectively with Stanfilco on matters
therefore, it was a benefit not yet existing at the time of their separation. concerning technical services, canal maintenance, irrigation and pest
In any event, assuming that Nora and Rosemarie are entitled to the control, among others.
economic assistance, they had signed release and quitclaim deeds upon 2. Respondents (about 20 complainants) were hired as farm workers by
their resignation in which they waived x x x any or manner of action or several member-landowners but, nonetheless, were made to perform
actions, course or courses of action, suits, debts, dues, sums of money, functions as packers and harvesters in the plantation of petitioner
accounts, reckonings, promises, damages (whether actual, moral, association.
nominal, temperate, liquidated or exemplary), claims and liabilities 3. January 8, 1993 – July 30, 1994 –respondents were dismissed on various
whatsoever, in law or equity, arising out or and in connection with, but dates. Thus, they filed against petitioner for illegal dismissal and
not limited to claims for salary, termination pay, vacation leave, monetary benefits.
overtime, night work, compensation for injuries or illness directly caused  Petitioner’s liabilities to complainants are joint and solidary, with its
by my employment or either aggravated by or the results of the nature of responsible officers.
my employment and claims for which I may or shall make, or may have 4. September 6, 1995 – LABOR ARBITER SANCHO: ordered
for or by any reason of any matter, cause or thing whatsoever, including reinstatement of respondents and payment of backwages and other
but not limited to my employment and to matters arising from my benefits
employment by KIMBERLY-CLARK PHILIPPINES, INC. over any period or o Note: 2 complainants eventually dropped their case (Loran Paquit and
periods in the past. LovillaDorlones) because they were able to amicably settle their claims.
While quitclaims executed by employees are commonly frowned upon as 5. December 26, 1996 - NLRC – affirmed decision of LA and denied the
being contrary to public policy and are ineffective to bar claims for the motion for reconsideration.
full measure of their legal rights, where the person making the waiver 6. Petitioner contends that being an unregistered association and having
has done so voluntarily, with a full understanding thereof, and the been formed solely to serve as an effective medium for dealing
consideration for the quitclaim is credible and reasonable, the transaction collectively with Stanfilco and not existing in law, it cannot be considered
must be recognized as being a valid and binding undertaking. In the case an employer.
at bar, Nora and Rosemarie are Accounting graduates. They have not
 Issue: Whether or not an unregistered association may be an employer separation pay, service incentive leave pay, 13th month pay, signing
independent of the respective members it represents bonus, travel allowance and amounts due under the Employees Stock
Held: YES. Petition is DISMISSED. NLRC judgment affirmed but Option Plan (“ESOP”).
remanded back to Labor Arbiter Sancho to specify the amount each On 10 July 1996, ABS-CBN filed a Motion to Dismiss on the ground that
respondent is entitled to. no employer-employee relationship existed between the parties. SONZA
Ratio: The law does not require an employer to be registered before he filed an Opposition to the motion on 19 July 1996.
may considered as one within the definition of the Labor Code. Issue: Whether Sonza was an employee or independent contractor.
o Art 212 (e) of the Labor Code defines an employer as any person acting Held: Applying the control test to the present case, we find that SONZA
in the interest of an employer, directly or indirectly is not an employee but an independent contractor.
- To determine the existence of employer – employee relationship First, SONZA contends that ABS-CBN exercised control over the means
(Filipinas Broadcasting Network v. NLRC): and methods of his work.
1. The manner of selection and engagement SONZA’s argument is misplaced. ABS-CBN engaged SONZA’s services
2. Payment of wages specifically to co-host the “Mel & Jay” programs. ABS-CBN did not assign
3. Presence or absence of the power of dismissal any other work to SONZA. To perform his work, SONZA only needed his
4. Presence or absence of the power of control (most important element skills and talent. How SONZA delivered his lines, appeared on television,
and sounded on radio were outside ABS-CBN’s control. SONZA did not
- Evidence to support existence of employer – employee relationship: have to render eight hours of work per day. The Agreement required
o During the subsistence of the association, several circulars and SONZA to attend only rehearsals and tapings of the shows, as well as
memoranda were issued concerning, among other things, absences pre- and post-production staff meetings. ABS-CBN could not dictate the
without formal request, loitering in the work area and disciplinary contents of SONZA’s script. However, the Agreement prohibited SONZA
measures with which every worker is enjoined to comply. from criticizing in his shows ABS-CBN or its interests. The clear
o The employees were issued IDs. implication is that SONZA had a free hand on what to say or discuss in
 In Domasig v. NLRC, the issuance of ID was held to be not only as a his shows provided he did not attack ABS-CBN or its interests.
security measure but mainly to identify the holder as a bonafide SONZA protests the Labor Arbiter’s finding that he is a talent of MJMDC,
employee of the firm which contracted out his services to ABS-CBN. The Labor Arbiter ruled
o The power of the petitioner to enter into compromise agreements that as a talent of MJMDC, SONZA is not an employee of ABS-
involving money claims filed by three employees, namely: Lorna Paquit, CBN. SONZA insists that MJMDC is a “labor-only” contractor and ABS-
LovellaDorlones and Jasmine Espanola. CBN is his employer.
o In a labor-only contract, there are three parties involved: (1) the “labor-
- The association exceeded the purpose it was initially established only” contractor; (2) the employee who is ostensibly under the employ of
for when it did the above mentioned acts. Thus, it is considered the “labor-only” contractor; and (3) the principal who is deemed the real
an employer. employer. Under this scheme, the “labor-only” contractor is the
agent of the principal. The law makes the principal responsible to the
Sonza vs. ABS-CBN employees of the “labor-only contractor” as if the principal itself directly
GR 138051 hired or employed the employees. These circumstances are not present
Facts: In May 1994, respondent ABS-CBN Broadcasting Corporation in this case.
(“ABS-CBN”) signed an Agreement (“Agreement”) with the Mel and Jay There are essentially only two parties involved under the Agreement,
Management and Development Corporation (“MJMDC”). ABS-CBN was namely, SONZA and ABS-CBN. MJMDC merely acted as SONZA’s
represented by its corporate officers while MJMDC was represented by agent. The Agreement expressly states that MJMDC acted as the
SONZA, as President and General Manager, and Carmela Tiangco “AGENT” of SONZA. The records do not show that MJMDC acted as ABS-
(“TIANGCO”), as EVP and Treasurer. Referred to in the Agreement as CBN’s agent. MJMDC, which stands for Mel and Jay Management and
“AGENT,” MJMDC agreed to provide SONZA’s services exclusively to ABS- Development Corporation, is a corporation organized and owned by
CBN as talent for radio and television. SONZA and TIANGCO. The President and General Manager of MJMDC is
On 1 April 1996, SONZA wrote a letter to ABS-CBN’s President, Eugenio SONZA himself. It is absurd to hold that MJMDC, which is owned,
Lopez III about the recent event concerning his program and career, and controlled, headed and managed by SONZA, acted as agent of ABS-CBN
that the said violation of the company has breached the agreement, thus, in entering into the Agreement with SONZA, who himself is represented
the notice of rescission of the Agreement was sent. by MJMDC. That would make MJMDC the agent of both ABS-CBN and
On 30 April 1996, SONZA filed a complaint against ABS-CBN before the SONZA.
Department of Labor and Employment, National Capital Region in Quezon Petition denied.
City. SONZA complained that ABS-CBN did not pay his salaries, NOTE:
1. Hindi dapat labor case ito, kundi civil case. Kasi ang basis ng claim ni Subsequently, however, the NLRC, acting on respondents Motion for
Sonza ay dun sa Agreement (contract) nila ng ABS-CBN. Reconsideration, reversed its Resolution on the postulate that their
SEMBLANTE V. CA (G.R. NO. 196426; AUGUST 15, 2011) appeal was meritorious and the filing of an appeal bond, albeit belated, is
CASE DIGEST: MARTICIO SEMBLANTE AND DUBRICK PILAR v. a substantial compliance with the rules.The NLRC held in its Resolution of
COURT OF APPEALS. (G.R. No. 196426; August 15, 2011). October 18, 2006 that there was no employer-employee relationship
between petitioners and respondents, respondents having no part in the
FACTS: Petitioners Marticio Semblante (Semblante) and Dubrick Pilar selection and engagement of petitioners, and that no separate individual
(Pilar) assert that they were hired by respondents-spouses Vicente and contract with respondents was ever executed by petitioners.
Maria Luisa Loot, the owners of Gallera de Mandaue (the cockpit), as the
official masiador and sentenciador, respectively, of the cockpit sometime The appellate court found for respondents, noting that referees and bet-
in 1993. takers in a cockfight need to have the kind of expertise that is
characteristic of the game to interpret messages conveyed by mere
As themasiador, Semblante calls and takes the bets from the gamecock gestures. Hence, petitioners are akin to independent contractors who
owners and other bettors and orders the start of the cockfight. He also possess unique skills, expertise, and talent to distinguish them from
distributes the winnings after deducting thearriba, or the commission for ordinary employees.
the cockpit. Meanwhile, as the sentenciador, Pilar oversees the proper
gaffing of fighting cocks, determines the fighting cocks physical condition The CA refused to reconsider its Decision. Hence, petitioners came to this
and capabilities to continue the cockfight, and eventually declares the Court, arguing in the main that the CA committed a reversible error in
result of the cockfight. entertaining an appeal, which was not perfected in the first place.

On November 14, 2003, however, petitioners were denied entry into the ISSUE: Did the CA err in entertaining an appeal which was not
cockpit upon the instructions of respondents, and were informed of the perfected?
termination of their services effective that date. This prompted
petitioners to file a complaint for illegal dismissal against respondents. HELD: Indeed, the posting of a bond is indispensable to the perfection of
an appeal in cases involving monetary awards from the Decision of the
In answer, respondents denied that petitioners were their employees and Labor Arbiter. Article 223 of the Labor Code provides:
alleged that they were associates of respondents independent contractor,
Tomas Vega. Respondents claimed that petitioners have no regular Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are
working time or day and they are free to decide for themselves whether final and executory unless appealed to the Commission by any or both
to report for work or not on any cockfighting day. In times when there partieswithin ten (10) calendar days from receipt of such decisions,
are few cockfights inGallera de Mandaue, petitioners go to other cockpits awards, or orders.Such appeal may be entertained only on any of the
in the vicinity. Lastly, petitioners, so respondents assert, were only following grounds:
issued identification cards to indicate that they were free from the normal In case of a judgment involving a monetary award,an appeal by the
entrance fee and to differentiate them from the general public. employer may be perfected only upon the posting of a cash or surety
bondissued by a reputable bonding company duly accredited by the
Labor Arbiter Julie C. Rendoque found petitioners to be regular Commission in the amount equivalent to the monetary award in the
employees of respondents as they performed work that was necessary judgment appealed from.
and indispensable to the usual trade or business of respondents for a
number of years. The Labor Arbiter also ruled that petitioners were Time and again, however, this Court, considering the substantial merits
illegally dismissed, and so ordered respondents to pay petitioners their of the case, has relaxed this rule on, and excused the late posting of, the
backwages and separation pay. appeal bond when there are strong and compelling reasons for the
liberality, such as the prevention of miscarriage of justice extant in the
Respondents counsel received the Labor Arbiters Decision on September caseor the special circumstances in the case combined with its legal
14, 2004. And within the 10-day appeal period, he filed the respondents merits or the amount and the issue involved.After all, technical rules
appeal with the NLRC on September 24, 2004, but without posting a cash cannot prevent courts from exercising their duties to determine and
or surety bond equivalent to the monetary award granted by the Labor settle, equitably and completely, the rights and obligations of the parties.
Arbiter. It was only on October 11, 2004 that respondents filed an appeal This is one case where the exception to the general rule lies.
bond dated October 6, 2004. Hence, in a Resolution dated August 25,
2005, the NLRC denied the appeal for its non-perfection. While respondents had failed to post their bond within the 10-day period
provided above, it is evident, on the other hand, that petitioners are NOT In a number of cases decided by this Court, we ruled that the
employees of respondents, since their relationship fails to pass muster relationship between jeepney owners/operators on one hand and jeepney
the four-fold test of employment We have repeatedly mentioned in drivers on the other under the boundary system is that of employer-
countless decisions: employee and not of lessor-lessee. In the case of jeepney
owners/operators and jeepney drivers, the former exercise supervision
(1) the selection and engagement of the employee; and control over the latter. The management of the business is in the
(2) the payment of wages; owner’s hands. The owner as holder of the certificate of public
(3) the power of dismissal; and convenience must see to it that the driver follows the route prescribed by
(4) the power to control the employees conduct, which is the most the franchising authority and the rules promulgated as regards its
important element. operation. Now, the fact that the drivers do not receive fixed wages but
get only that in excess of the so-called “boundary” they pay to the
As found by both the NLRC and the CA, respondents had no part in owner/operator is not sufficient to withdraw the relationship between
petitioners selection and management;petitioners compensation was paid them from that of employer and employee. We have applied by analogy
out of the arriba (which is a percentage deducted from the total bets), the doctrine to the relationships between bus owner/operator and bus
not by petitioners;and petitioners performed their functions as masiador conductor, auto-calesa owner/operator and driver, and recently between
and sentenciador from the direction and control of respondents. In the taxi owners/operators and taxi drivers. Hence, petitioners are
conduct of their work, petitioners relied mainly on their expertise that is undoubtedly employees of private respondent because as taxi drivers
characteristic of the cockfight gambling, and were never given by they perform activities which are usually necessary or desirable in the
respondents any tool needed for the performance of their work. usual business or trade of their employer.

Respondents, not being petitioners employers, could never have TENG V. PAHAGAC (G.R. NO. 169704; NOVEMBER 17, 2010)
dismissed, legally or illegally, petitioners, since respondents were without CASE DIGEST: ALBERT TENG, doing business under the firm name
power or prerogative to do so in the first place. The rule on the posting of ALBERT TENG FISH TRADING, and EMILIA TENG-CHUA v.
an appeal bond cannot defeat the substantive rights of respondents to be ALFREDO S. PAHAGAC,EDDIE D. NIPA,ORLANDOP. LAYESE,
free from an unwarranted burden of answering for an illegal dismissal for HERNAN Y. BADILLES and ROGER S. PAHAGAC. (G.R. No. 169704;
which they were never responsible. November 17, 2010)

Strict implementation of the rules on appeals must give way to the FACTS: Albert Teng (Petitioner) is engaged in the business of deep sea
factual and legal reality that is evident from the records of this case.After fishing, and he employs master fishermen to facilitate his fishing venture.
all, the primary objective of our laws is to dispense justice and equity, These master fishermen hire the Respondent workers as checkers of the
not the contrary. DENIED. volume of the fish caught in every voyage. Respondents filed a complaint
of illegal dismissalthey averred that there was no employment contract,
and sometime around Sept. 2002, Teng doubted the amounts that they
Jardin v. NLRC (G.R. No. 119268) were telling him regarding how much fish were caught. By December,
Teng told them their services were terminated.
Date: August 12, 2016
The VA dismissed the complaint because there was no employer-
Facts: Petitioners were drivers of private respondent’s taxicabs under the
employee relationship. Respondents received the decision on June 12,
boundary system whose earnings were regularly deducted washing fee
2003; They filed an MR which was denied and they received the order on
for the taxi units. Petitioners decided to form a labor union to protect
July 8, 2003. The Voluntary Arbitrator reasoned that the Procedural
their rights and interests on the belief that the deductions made were
Guidelines in the Conduct of Voluntary Arbitration Proceedings (1989
illegal. Upon learning, respondent refused to let petitioners drive their
Procedural Guidelines) does not provide the remedy of a motion for
taxicabs when they reported for work. Aggrieved, petitioners filed a
reconsideration to the party adversely affected by the VAs order or
complaint for illegal dismissal with the Labor Arbiter but the latter
decision.
dismissed said complaint. On appeal, the NLRC tribunal declared that
petitioners are employees of private respondent. On reconsideration
Respondents appealed to the CA, which ordered Petitioner to pay
however, the decision was reversed by the NLRC tribunal and held that
backwages and other monetary benefits. After denial of the MR,Teng files
no employer-employee relationship between the parties exists.
the case before the Supreme Court
Issue: Whether or not petitioner taxi drivers are employees of
respondent company.
ISSUES: Is the VA's decision not subject to a motion for reconsideration?
Ruling: YES.
Is there an employer-employee relationship? SAPS and Promm-Gem imposed disciplinary measures on erring
merchandisers for reasons such as habitual absenteeism, dishonesty or
HELD: Article 262-A deleted the word"unappealable"from Article 263. changing day-off without prior notice.
The deliberate selection of the language in the amendatory act differing To enhance consumer awareness and acceptance of the products, P&G
from that of the original act indicates that the legislature intended a entered into contracts with Promm-Gem and SAPS for the promotion and
change in the law, and the court should endeavor to give effect to such merchandising of its products.
intent. Presumably, the decision may still be reconsidered by the In December 1991, petitioners filed a complaint against P&G for
Voluntary Arbitrator on the basis of a motion for reconsideration duly regularization, service incentive leave pay and other benefits with
filed during that period. The seasonable filing of a motion for damages.
reconsideration is a mandatory requirement to forestall the finality of Issue: WON P&G is the employer of petitioners.
such decision. Held: In order to resolve the issue of whether P&G is the employer of
petitioners, it is necessary to first determine whether Promm-Gem and
The requirement that administrative remedies be exhausted is based on SAPS are labor-only contractors or legitimate job contractors
the doctrine that in providing for a remedy before an administrative .Clearly, the law and its implementing rules allow contracting
agency, every opportunity must be given to the agency to resolve the arrangements for the performance of specific jobs, works or services.
matter and to exhaust all opportunities for a resolution under the given However, in order for such outsourcing to be valid, it must be made to
remedy before bringing an action in, or resorting to, the courts of justice. an independent contractor because the current labor rules expressly
While Teng alleged that it was the maestros who hired the respondent prohibit labor-only contracting.
workers, it was his company that issued to the respondent workers To emphasize, there is labor-only contracting when the contractor or sub-
identification cards (IDs) bearing their names as employees and Tengs contractor merely recruits, supplies or places workers to perform a job,
signature as the employer. Generally, in a business establishment, IDs work or service for a principal and any of the following elements are
are issued to identify the holder as a bona fide employee of the issuing present:
entity. For the 13 years that the respondent workers worked for Teng, 1. i) The contractor or subcontractor does not have substantial capital or
they received wages on a regular basis, in addition to their shares in the investment which relates to the job, work or service to be
fish caught. performed andthe employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are directly
The element of controlis present in this case. Teng not only owned the related to the main business of the principal; or
tools and equipment, he directed how the respondent workers were to 1. ii) The contractor does not exercise the right to control over the
perform their job as checkers; they, in fact, acted as Tengs eyes and performance of the work of the contractual
ears in every fishing expedition. Under the circumstances, Promm-Gem cannot be considered as a labor-
only contractor. We find that it is a legitimate independent contractor.
The dismissal of an employee, which the employer must validate, has a Considering that SAPS has no substantial capital or investment and the
twofold requirement:one is substantive, the other is procedural.Not only workers it recruited are performing activities which are directly related to
must the dismissal be for a just or an authorized cause, as provided by the principal business of P&G, we find that the former is engaged in
law; the rudimentary requirements of due process the opportunity to be “labor-only contracting”.
heard and to defend oneself must be observed as well. The employer has Where labor-only contracting exists, the Labor Code itself establishes an
the burden of proving that the dismissal was for a just cause; failure to employer-employee relationship between the employer and the
show this, as in the present case, would necessarily mean that the employees of the labor-only contractor. The statute establishes this
dismissal was unjustified and, therefore, illegal. DENIED. relationship for a comprehensive purpose: to prevent a circumvention of
Aliviado vs. Procter and Gamble DIGEST labor laws. The contractor is considered merely an agent of the principal
DECEMBER 19, 2016 ~ VBDIAZ employer and the latter is responsible to the employees of the labor-only
Aliviado vs. Procter and Gamble contractor as if such employees had been directly employed by the
G.R. No. 160506 June 6, 2011 principal employer.
Facts: Petitioners worked as merchandisers of P&G. They all individually Petition Granted
signed employment contracts with either Promm-Gem or SAPS. They NOTE:
were assigned at different outlets, supermarkets and stores where they
handled all the products of P&G. They received their wages from Promm- 1. Respondent filed MR, which was denied.
Gem or SAPS. 2. In its resolution, the Court upheld its decision declaring SAPS has no
substantial capital, therefore, labor-only contractor.
3. Wack Wack Golf and Country club vs NLRC equipments, machineries, work premises and other materials which are
GR No. 149793; April 15, 2005 necessary in the conduct of the business.
Ponente: Callejo, Sr., J. There is indubitable evidence showing that BSMI is an independent
FACTS: A fire destroyed a large portion of the main clubhouse of the contractor, engaged in the management of projects, business operations,
Wack Wack Golf and Counrty Club (wack Wack)., including its kitchen. In functions, jobs and other kinds of business ventures, and has sufficient
view of the reconstruction of the whole clubhouse complex, Wack Wack capital and resources to undertake its principal business. It had provided
had to suspend the operations of the Food and Beverages Department management services to various industrial and commercial business
which required the suspension of 54 employees. The Wack Wack establishments. Its Articles of Incorporation proves its sufficient
Employee’s Union found the suspension arbitrary and constitutive of capitalization. In December 1993, Labor Secretary Bienvenido Laguesma,
union-busting, and went to strike. in the case of In re Petition for Certification Election Among the Regular
The parties soon entered into an agreement and formulated a “special Rank-and-File Employees Workers of Byron-Jackson (BJ) Services
separation benefir/remittance privilege” which contained, among other International Incorporated, Federation of Free Workers (FFW)-Byron
things, the following provision: Jackson Services Employees Chapter, recognized BSMI as an
“4. All qualified employees who may have been separated from the independent contractor. As a legitimate job contractor, there can be no
service under the above package shall be considered under a priority doubt as to the existence of an employer-employee relationship between
basis for employment by concessionaires and/or contractors, and even by the contractor and the workers.
the Club upon full resumption of operations, upon the recommendation of
the UNION. The Club may even persuade an employee-applicant for GSIS V. NLRC (G.R. NO. 180045; NOVEMBER 17, 2010)
availment under the package to remain on his/her job, or be assigned to
another position.” CASE DIGEST: GOVERNMENT SERVICE INSURANCE SYSTEM,
Three employees, namely: Martina B. Cagasan, Carmencita F. Petitioner v. NATIONAL LABOR RELATIONS COMMISSION (NLRC),
Dominguez, and Crisanto Baluyot, Sr. availed of the aforementioned DIONISIO BANLASAN, ALFREDO T. TAFALLA, TELESFORO D.
privilege. RUBIA, ROGELIO A. ALVAREZ, DOMINADOR A. ESCOBAL, and
Soon after, Wack Wack entered into a Management Contract with ROSAURO PANIS, Respondent
Business Staffing and Management, Inc. (BSMI) whereby the latter will
provide management services to Wack Wack. Cagasan, Dominguez, and FACTS: Private respondents were security guards hired by DNL Security,
Baluyot, Sr. were among those hired by BMSI. and they were assigned to Petitioners Tacloban office. In July 1989, GSIS
Wack Wack also engaged with several contractors which were assigned in voluntarily increased their salaries from 1400 to 3000 php. In February
various operating functions of the club. Due to these various 1993, DNL Security informed respondents that its service contract with
management service contracts, BSMI undertook an organizational petitioner was terminated. This notwithstanding, DNL Security instructed
analysis and manpower evaluation. In the course of the assessment, it respondents to continue reporting for work to petitioner. Respondents
was decided that the services of Cagasan, Domingues, and Baluyot, Sr. worked as instructed until April 20, 1993, but without receiving their
were no longer needed. They were then dismissed from service. Later, wages; after which, they were terminated from employment.
these employees individually filed an illegal dismissal complaint against
Wack Wack before the NLRC. Respondents filed before the NLRC a complaint against GSIS and DNL
The Labor Arbiter dismissed the complaints of Cagasan and Domingues Security for illegal dismissal, which they won. The LA found that
for lack of cause of action. As to Baluyot, Sr., the Arbiter found that his respondents were not illegally terminated from employment because the
dismissal was illegal. Upon appeal by Cagasan and Dominguez, the NLRC employment of security guards is dependent on the service contract
decided in their favor. It held that BMSI is only a labor-only contractor between the security agency and its client. However, considering that
and hence, had nothing to do with the grievance of the complainants. It respondents had been out of work for a long period, and consonant with
ordered Wack Wack to reinstate Cagasan and Dominguez. the principle of social justice, the LA awarded respondents with
ISSUE: WoN BSMI is a labor-only contractor. separation pay equivalent to one (1) month salary for every year of
HELD: NO. An independent contractor is one who undertakes job service, to be paid by DNL Security. DNL Security filed a motion for
contracting, i.e., a person who: (a) carries on an independent business reconsideration, while petitioner appealed to the NLRC.
and undertakes the contract work on his own account under his own
responsibility according to his own manner and method, free from the The NLRC treated DNL Securitys motion for reconsideration as an appeal,
control and direction of his employer or principal in all matters connected but dismissed the same, as it was not legally perfected. It likewise
with the performance of the work except as to the results thereof; and dismissed petitioners appeal, having been filed beyond the reglementary
(b) has substantial capital or investment in the form of tools, period. The CA likewise affirmed the decision of the NLRC upon petition
for certiorari, and GSIS institutes the instant action.
 agreement, Longest Force deployed its security guards, the private
ISSUES: Was GSIS appeal seasonably filed before the NLRC.? respondents herein, at the petitioner’s shipyard in Mariveles, Bataan.
Is GSIS liable as an indirect employer? According to petitioner, it religiously complied with the terms of the
security contract with Longest Force, promptly paying its bills and the
HELD: Under Section 3, Rule 13 of the Rules of Court, where the filing of contract rates of the latter. However, it found the services being
pleadings, appearances, motions, notices, orders, judgments, and all rendered by the assigned guards unsatisfactory and inadequate, causing
other papers with the court/tribunal is made by registered mail, the date it to terminate its contract with Longest Force on April 1995. Longest
of mailing, as shown by the post office stamp on the envelope or the Force, in turn, terminated the employment of the security guards it had
registry receipt, shall be considered as the date of filing. In any case, deployed at petitioner’s shipyard.
even if the appeal was filed one day late, the same should have been On September 1996, private respondents filed a case for illegal dismissal,
entertained by the NLRC. However, in exceptional cases, a belated appeal underpayment of wages pursuant to the PNPSOSIA-PADPAO rates, non-
may be given due course if greater injustice will be visited upon the party payment of overtime pay, premium pay for holiday and rest day, service
should the appeal be denied. The Court has allowed this extraordinary incentive leave pay, 13th month pay and attorney’s fees, against both
measure even at the expense of sacrificing order and efficiency if only to Longest Force and petitioner, before the Labor Arbiter. The case sought
serve the greater principles of substantial justice and equity. the guards’ reinstatement with full back wages and without loss of
seniority rights.
*** Longest Force admitted that it employed private respondents and
assigned them as security guards at the premises of petitioner rendering
The fact that there is no actual and direct employer-employee a 12 hours duty per shift for the said period. It likewise admitted its
relationship between petitioner and respondents does not absolve the liability as to the non-payment of the alleged wage differential in the total
former from liability for the latters monetary claims. When petitioner amount of P2,618,025 but passed on the liability to petitioner
contracted DNL Security's services, petitioner became an indirect The petitioner denied any liability on account of the alleged illegal
employer of respondents, pursuant to Article 107 of the Labor Code dismissal, stressing that no employer-employee relationship existed
which states: The provisions of the immediately preceding Article shall between it and the security guards. It further pointed out that it would be
likewise apply to any person, partnership, association or corporation the height of injustice to make it liable again for monetary claims which it
which, not being an employer, contracts with an independent contractor had already paid. Anent the cross-claim filed by Longest Force against it,
for the performance of any work, task, job or project. petitioner prayed that it be dismissed for lack of merit. Petitioner averred
that Longest Force had benefited from the contract; it was now estopped
Petitioners liability covers the payment of respondents salary differential from questioning said agreement on the ground that it had made a bad
and 13thmonth pay during the time they worked for petitioner. In deal.
addition, petitioner is solidarily liable with DNL Security for respondents The Labor Arbiter rendered judgment that Longest Force and Mariveles
unpaid wagesfrom February 1993 until April 20, 1993. While it is true Shipping be jointly and severally liable to pay the money claims of the
that respondents continued working for petitioner after the expiration of complainants. Petitioner appealed the foregoing to the NLRC. The labor
their contract, based on the instruction of DNL Security, petitioner did not tribunal, affirmed the decision of the Labor Arbiter. Petitioner moved for
object to such assignment and allowed respondents to render service. reconsideration, but this was denied by the NLRC.
Thus, petitioner impliedly approved the extension of respondents The petitioner then filed a special civil action for certiorari assailing the
services.Accordingly, petitioner is bound by the provisions of the Labor NLRC judgment for having been rendered with grave abuse of discretion
Code on indirect employment. with the Court of Appeals. The Court of Appeals denied due course to the
petition and dismissed it outright.
However, GSIS is exempt from paying separation pay because it Issue: WON Longest Force should be held solely and ultimately liable.
is punitive in character, and an indirect employer cannot be held Held: Petitioner’s liability is joint and several with that of Longest Force,
liable for this unless it conspired with the dismissal. pursuant to Articles 106, 107 and 109 of the Labor Code which provide
as follows:
PARTIALLY GRANTED. GSIS is solidarily liable with DNL Security. ART. 106. CONTRACTOR OR SUBCONTRACTOR. — Whenever an
employer enters into a contract with another person for the performance
Mariveles Shipyard V CA G.R. No. 144134; November 11, 2003; 415 of the former’s work, the employees of the contractor and of the latter’s
SCRA 573 December 8, 2010 subcontractor, if any, shall be paid in accordance with the provisions of
Facts: Sometime on October 1993, Mariveles Shipyard Corporation this Code.
engaged the services of Longest Force Investigation and Security Agency, In the event that the contractor or subcontractor fails to pay the wages
Inc. to render security services at its premises. Pursuant to their of his employees in accordance with this Code, the employer shall be
jointly and severally liable with his contractor or subcontractor to such held in Del Rosario & Sons Logging Enterprises, Inc. v. NLRC ,
employees to the extent of the work performed under the contract, in the the joint and several liability imposed on petitioner is without
same manner and extent that he is liable to employees directly employed prejudice to a claim for reimbursement by petitioner against
by him.
the security agency for such amounts as petitioner may have
ART. 107. INDIRECT EMPLOYER. — The provisions of the immediately
to pay to complainants, the private respondents herein. The
preceding Article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, security agency may not seek exculpation by claiming that the
contracts with an independent contractor for the performance of principal’s payments to it were inadequate for the guards’
any work, task, job or project. lawful compensation. As an employer, the security agency is
ART. 109. SOLIDARY LIABILITY. — The provisions of existing laws to the charged with knowledge of labor laws; and the adequacy of the
contrary notwithstanding, every employer or indirect employer shall be compensation that it demands for contractual services is its
held responsible with his contractor or subcontractor for any violation of principal concern and not any other’s
any provision of this Code. For purposes of determining the extent of
their civil liability under this Chapter, they shall be considered as direct
employers.
In this case, when petitioner contracted for security services with Longest
Force as the security agency that hired private respondents to work as
guards for the shipyard corporation, petitioner became an indirect
employer of private respondents pursuant to Article 107 above
cited. Following Article 106, when the agency as contractor failed
to pay the guards, the corporation as principal becomes jointly
and severally liable for the guards’ wages. This is mandated by
the Labor Code to ensure compliance with its provisions, including
payment of statutory minimum wage.
The security agency is held liable by virtue of its status as
direct employer, while the corporation is deemed the indirect
employer of the guards for the purpose of paying their
wages in the event of failure of the agency to pay them.
This statutory scheme gives the workers the ample
protection consonant with labor and social justice
provisions of the 1987 Constitution. Petitioner cannot evade
its liability by claiming that it had religiously paid the
compensation of guards as stipulated under the contract with
the security agency. Labor standards are enacted by the
legislature to alleviate the plight of workers whose wages
barely meet the spiraling costs of their basic needs. Labor
laws are considered written in every contract.
Stipulations in violation thereof are considered null.
Similarly, legislated wage increases are deemed
amendments to the contract. Thus, employers cannot hide
behind their contracts in order to evade their (or their
contractors’ or subcontractors’) liability for noncompliance with
the statutory minimum wage.
However, the court emphasizes that the solidary liability of
petitioner with that of Longest Force does not preclude the
application of the Civil Code provision on the right of
reimbursement from his co-debtor by the one who paid. As