a.

Security of tenure – Llosa-Tan’s right to due process and secure

employment was infringed upon, warranting not
only reinstatement but also compensation in the
Anita Llosa-Tan vs. Silahis International Hotel et al. form of backwages for up to three years from the
date of termination.
Facts:
The Supreme Court reversed the NLRC’s decision,
Anita Llosa-Tan, employed as a front office cashier
reinstated Llosa-Tan to her position without loss of
at Silahis International Hotel since November 2,
seniority, and awarded her full backwages for three
1976, was dismissed on October 30, 1982, following
years.
an incident involving the encashment of two US
dollar checks worth $1,200.00, against hotel policy Doctrine:
No. 014 prohibiting such transactions without
authorization. Despite her explanation and the The Supreme Court reiterated that the employer’s
circumstances leading to her decision, including right to dismiss employees must be exercised
assurances from the general cashier of a sister without abuse of discretion and must be grounded on
company and past ambiguities in policy just cause, respecting the employee’s right to due
enforcement, her termination was pursued. process and security of tenure guaranteed by the
Constitution. Findings of labor arbiters, when
Llosa-Tan filed a complaint for illegal dismissal supported by substantial evidence, are accorded
against the hotel and related individuals. The Labor great respect and finality.
Arbiter initially ruled in her favor, ordering
reinstatement without back wages, but this was Class Notes:
overturned by the National Labor Relations – Gross negligence is defined as a want of or
Commission (NLRC), which dismissed her exercise of slight care, indicating a disregard for the
complaint. Subsequent motions for reconsideration consequences of one’s actions.
by Llosa-Tan were denied by the NLRC, prompting
her to petition the Supreme Court for certiorari. – Dismissal must be justified and follow due
process; arbitrary dismissal violates constitutional
Issues: rights to security of tenure.
1. Whether Llosa-Tan’s act of encashing the checks – The discretion of employers to dismiss employees
constitutes gross negligence justifying her is tempered by the need for a legitimate cause and
termination. due process.
2. Whether the dismissal was disproportionate – Policies within an organization must be enforced
considering Llosa-Tan’s explanation and consistently; exceptions or past deviations can affect
circumstances, including policy exceptions and past disciplinary actions.
practice.
– In cases of illegal dismissal, reinstatement and
3. If Llosa-Tan’s dismissal violated her right to due backwages are standard remedies, highlighting the
process under the collective bargaining agreement. protection of labor rights under Philippine law.
Ruling: Historical Background:
The Supreme Court found in favor of Llosa-Tan. It This case underscores the tension between enforcing
established that: corporate policies and respecting labor rights within
– The policy No. 014 was not consistently enforced the Philippine legal framework, highlighting the
and had been relaxed previously. Supreme Court’s role in balancing employers’
disciplinary actions against the constitutional
– Llosa-Tan acted without bad faith, under pressure, protections for workers. It illustrates the continuing
and with a reasonable belief that she had clearance evolution of labor jurisprudence in the Philippines,
from her superiors. emphasizing the importance of fairness, due process,
and the protection of workers’ rights.
– The NLRC’s finding of gross negligence was
unfounded, and the dismissal, without considering
Llosa-Tan’s situation and the hotel’s policy
practices, was disproportionate.
City Service Corp. Workers Union vs. City Service reinstatement to their original positions due to the
Corporation passage of time, the Court nonetheless underscored
the feasibility of reassigning them to equivalent
Facts: positions within CSC’s vast operational scope.
The saga begins with the City Service Corporation The Court, therefore, overturned the NLRC’s award
(CSC), a company providing janitorial and allied of separation pay, ordering CSC to reinstate the
services, hiring a group of individuals across petitioners to their janitorial positions or similar
different years, notably Juanito Valencia in 1965 and roles if the original positions were unavailable, with
others in 1979, assigning them to the Army and three years’ worth of backwages, setting a clear
Navy Club. On February 4, 1974, CSC terminated precedent for the treatment of illegal dismissal cases.
their employment due to accusations of possible
theft, as reported by the Army and Navy Club, Doctrine:
without a formal investigation or prior clearance
from the Secretary of Labor, in violation of This case reinforces the constitutional doctrine of
prevailing laws. security of tenure, emphasizing that employees
unjustly dismissed are entitled to reinstatement
Challenging their dismissal, the affected individuals without loss of seniority rights and backwages. The
lodged an illegal dismissal case against CSC. This speculative nature of employment unavailability,
legal battle saw its initial victory at the Labor particularly in cases involving ongoing business
Arbiter’s level, where the termination was declared operations, cannot override the right to
illegal, mandating their reinstatement with reinstatement, with the court affirming the priority
backwages. However, upon CSC’s appeal, the of reinstating employees to similar positions if their
National Labor Relations Commission (NLRC) original positions are no longer available.
maintained the illegal dismissal verdict but opted for
compensation through separation pay instead of Class Notes:
reinstatement, citing the impracticality of – **Security of Tenure**: Art. II, Sec. 9 of the
reinstatement due to the time elapsed since their Philippine Constitution guarantees the security of
dismissal. tenure for workers, underlining its precedence over
Dissatisfied, the petitioners sought the Supreme speculative employment availability.
Court’s intervention, contending the NLRC’s refusal – **Illegal Dismissal**: Section 280 of the Labor
to reinstate despite acknowledging the dismissal’s Code mandates reinstatement and backwages for
illegality. They challenged the basis of this decision, unjustly dismissed employees, emphasizing the
highlighting CSC’s ongoing operations and the rehabilitation of employment rights over financial
general availability of janitorial positions, making compensation.
reinstatement viable.
– **Burden of Proof**: Employers bear the burden
Issues: of proving the impracticality of reinstatement, with
1. **Legality of Dismissal**: Whether the courts favoring the restoration of employment in
petitioners’ dismissal without prior clearance from cases of illegal dismissal.
the Secretary of Labor was illegal. Historical Background:
2. **Reinstatement vs. Separation Pay**: Whether The case underscores the progressive evolution of
petitioners are entitled to reinstatement with labor rights in the Philippines, reflecting the
backwages in lieu of separation pay despite the long judiciary’s active role in upholding constitutional
duration since their dismissal. guarantees amidst changing labor relations
Ruling: dynamics. It illustrates the balance between
employer’s operational discretion and the workers’
The Supreme Court delved into the essence of rights, with the Supreme Court setting a precedent
security of tenure, emphasizing its constitutional on the preferential option for reinstatement, even
guarantee and paramount importance. It criticized after a significant lapse of time since wrongful
the NLRC’s reliance on speculative reasoning for termination, thus fortifying the legal infrastructure
denying reinstatement, pointing out the lack of protecting labor rights in the Philippines.
evidence on the impracticality of re-employing the
petitioners given CSC’s ongoing business activities.
Acknowledging the potential challenge of direct
Woodridge School (Now Known as Woodridge – The award of moral and exemplary
College, Inc.) vs. Joanne C. Pe Benito and Randy T. damages was upheld, given the bad faith and
Balaguer damagingacts of the petitioner against the
respondents.
Facts:
Doctrine:
Woodridge School, an educational institution in
Cavite, engaged Joanne C. Pe Benito and Randy T. The case reiterates the principles governing
Balaguer as high school teachers on a probationary probationary employment under Philippine labor
basis starting June 1998 and June 1999, respectively. law, underscoring the employer’s duty to provide
Both were hired for a three-year probationary substantial evidence for dismissal and uphold
period. Issues began when the teachers raised procedural due process. It emphasizes that
concerns about school practices, including an allegations of misconduct must show a clear
NSAT/NEAT anomaly. The situation escalated to connection to work performance or behavior, with a
public media exposure of the said anomaly, after demonstration of wrongful intent for justification of
which the school issued memoranda accusing them termination.
of various infractions and suspended them for 30
days. Subsequently, their employment was Class Notes:
terminated for failure to meet performance standards 1. **Probationary Employment:** Security
and misconduct. An illegal suspension complaint of tenure for probationary employees is limited tothe
was filed by the respondents (teachers) with the period of their probation. They cannot be dismissed
NLRC, later amended to include illegal dismissal except for cause or failure to qualify as regular
after their termination. The Labor Arbiter dismissed employees based on known standards.
the complaint, a decision upheld by the NLRC.
However, the Court of Appeals (CA) reversed the 2. **Misconduct as Ground for Dismissal:**
NLRC ruling, finding the suspension and dismissal Misconduct justifying dismissal must be
illegal. The school appealed to the Supreme Court, serious,relate to the employee’s work, and be shown
questioning the CA’s ruling. to have been committed with wrongful intent.

Issues: 3. **Procedural Due Process in

Termination**: Employers must follow the twin
1. Whether the Court of Appeals erred in its requirementsof substantive (valid cause) and
reversal of the NLRC’s findings. procedural (notice and hearing) due process in
2. The legality of the preventive suspension terminating employment.
and eventual dismissal of the respondents basedon 4. **Preventive Suspension:** Can only be
the presented grounds. valid if the employee’s continued employmentposes
3. The propriety of awarding moral and a serious and imminent threat to the life or property
exemplary damages to the respondents. of the employer or co-workers.

Ruling: 5. **Moral and Exemplary Damages**:

Awarded in cases of dismissal where there’s
The Supreme Court denied the petitioner’s appeal, evidenceof bad faith, fraud, acts oppressive to labor,
affirming the CA’s decision. It ruled that: – The or acts contrary to morals, good customs, or public
procedural flaw regarding the certification against policy.
forum shopping was not fatal to the respondents’
cause. Substantial compliance under the Historical Background:
circumstances sufficed. This case is illustrative of disputes arising within the
– The respondents’ acts did not constitute educational sector in the Philippines, showcasing the
serious misconduct to warrant dismissal. TheCourt balance between upholding the rights of
noted that the school’s allegations were probationary employees and the authority of
unsubstantiated and found the dismissal to be done educational institutions to enforce standards. It
in bad faith, retaliatory for the respondents’ expose reflects the legal protections afforded to employees
of the NSAT/NEAT anomaly. – The probable cause under Philippine law, emphasizing the need for
for preventive suspension was improperly fairness, due process, and substantial evidence in
established; the alleged misconduct did not pose a employment termination decisions.
severe threat justifying such action.
 b. Termination by employee mandatorily stipulated for claiming benefits under
Virjen Shipping Corporation, Capt. Renato Morente the said contract.
& Odyssey Maritime PTE. Ltd. vs. Jesus B. Doctrine:
Barraquio
The case illustrates the doctrine on voluntary
Facts: resignation, highlighting that an employee’s
The case involves Jesus B. Barraquio (respondent) resignation is a voluntary act and disassociates him
against Virjen Shipping Corporation, Capt. Renato from entitled employment benefits unless compelled
Morente, and Odyssey Maritime PTE. Ltd. or under duress, which must be substantively
(petitioners), concerning claims for sickness proven. It also emphasizes the strict compliance
allowance, disability benefits, moral damages, required with post-employment medical
exemplary damages, and attorney’s fees. Barraquio, examination guidelines under the Standard
hired as chief cook aboard M/T Golden Progress Employment Contract for Seafarers, important for
under a 10-month contract initiated on February 29, entitlement to disability benefits.
2000, fell ill and eventually resigned citing poor Class Notes:
health. The procedural journey of this case saw a
complaint filed by Barraquio on August 1, 2001, – **Voluntary Resignation:** The act must stem
after his resignation and repatriation. The Labor from the employee’s own volition without force,
Arbiter ruled in favor of Barraquio, a decision threat, or undue influence from the employer.
reversed by the National Labor Relations
Commission (NLRC). However, the Court of – **Standard Employment Contract for Seafarers
Appeals later reinstated the Labor Arbiter’s (POEA):** Compliance with post-employment
decision, prompting the petitioners to bring the medical examination is crucial for claims relating to
matter before the Supreme Court. medical repatriation benefits, with the examination
to be conducted within three working days upon
Issues: return.

1. Whether Barraquio’s resignation was voluntary – **Doctrine of Compensability for Work-Related

and thus disentitles him from claiming monetary Illness:** For an illness to be compensable, it must
benefits. be shown that the employment contributed
significantly to the development of the illness or that
2. Whether hypertension and the suspected ischemic the risk of contracting the illness is increased by the
heart disease Barraquio suffered from were working conditions.
developed while onboard, making it compensable
under the Standard Employment Contract. Historical Background:

3. Whether Barraquio complied with the post- This case reflects the complexities and the legal
employment medical examination required under intricacies involved in labor disputes within the
the Standard Employment Contract for Seafarers. maritime industry, particularly concerning issues
around health and safety, employment contracts, and
Ruling: repatriation of seafarers. It also delineates the
The Supreme Court reversed the Decision of the judicial scrutiny applied to claims of work-related
Court of Appeals, reinstating the NLRC’s ruling. illnesses in the adjudication of employee benefits.
The Court found that Barraquio’s resignation was
voluntary, based on the unequivocal terms of his
resignation letter and lack of evidence of
compulsion. It was determined that ischemic heart
disease, a condition mentioned in Barraquio’s
medical records, does not develop in a significantly
short time, noting Barraquio’s service on the vessel
was too brief for such a condition to have been
caused by his employment. Lastly, the Court
highlighted Barraquio’s failure to undergo a post-
employment medical examination by a company-
designated physician within the required three-
working-day period post-repatriation, which is
Casa Cebuana Incorporada and Angela Figueroa Doctrine:
Paulin vs. Ireneo P. Leuterio
The Court reiterated the doctrine that to constitute
Facts: resignation, there must be clear evidence of an intent
to relinquish a position, coupled with acts of
This case involves the alleged illegal dismissal of abandonment, which was not present in this case. It
Ireneo P. Leuterio by Casa Cebuana Incorporada, also reinforced principles regarding the due process
where Angela Figueroa Paulin serves as the of law in the termination of employment, stating that
president. Leuterio was hired on September 15, an employee must be provided with two notices:
1999, as the Human Resources Development one, of the charges against them, and the second, of
Manager with various benefits. On February 24, the decision to terminate, allowing them the
2003, a disagreement arose regarding a loan opportunity to defend themselves.
provided to Leuterio by the company, leading to
several contentious meetings and eventually to Class Notes:
Leuterio being barred from entering company
premises. – **Illegal Dismissal**: Requires proof of intent to
resign and acts of abandonment.
Leuterio filed a complaint with the NLRC Regional
Arbitration Branch No. VII in Cebu City for illegal – **Due Process in Termination**: Necessitates (a)
dismissal and other related claims. The Labor a notice detailing the charges against the employee,
Arbiter initially found no illegal dismissal, a and (b) a notice of termination, combined with an
decision which was overturned by the NLRC upon opportunity for the employee to respond and defend
appeal, recognizing Leuterio’s illegal dismissal. The themselves.
NLRC’s decision was later reversed upon – **Labor Laws and Technicalities**: Emphasizes
reconsideration, leading Leuterio to appeal to the the preference for substantial justice over procedural
Court of Appeals, which found in his favor. The lapses, especially in labor cases.
petitioners’ motion for reconsideration was denied,
prompting the appeal to the Supreme Court. – **Substantial Evidence**: In labor disputes, the
employer bears the burden of proof to demonstrate
Issues: just cause for termination.
1. Whether the Court of Appeals erred in taking Historical Background:
cognizance of the petition for certiorari despite
allegedly being filed late. This case reflects on the broader issues surrounding
labor disputes in the Philippines, particularly
2. Whether the appellate court erred in finding that concerning managerial or key employees who, while
Leuterio was illegally dismissed. holding positions of trust and authority, also warrant
Ruling: protection under labor laws, including due process
and safeguards against wrongful dismissal. It
The Supreme Court affirmed the decision of the underscores the judiciary’s balancing act between
Court of Appeals, rejecting the technical procedural enforcing strict procedural requirements and
issue of the late filing as a basis for dismissing the ensuring equitable resolutions in labor relations.
petition and emphasizing the importance of
substantial justice over procedural technicalities.

The Court thoroughly analyzed the evidence and

circumstances of the case, finding no substantial
proof that Leuterio voluntarily resigned but rather
that he was forced to leave, which constitutes illegal
dismissal. The Court noted the absence of a formal
resignation letter from Leuterio, the subsequent
issuance of a memorandum asking him to resign,
and Leuterio’s immediate action to file a complaint
for illegal dismissal as indicating that he did not
intend to voluntarily relinquish his position.
Ma. Joy Teresa O. Bilbao vs. Saudi Arabian Airlines Doctrine:

Facts: The SC reaffirmed the principles surrounding

voluntary resignation, emphasizing that for a
Ma. Joy Teresa O. Bilbao filed a case against her resignation to be valid, the intent to resign must be
former employer, Saudi Arabian Airlines (Saudia), clear and done without coercion. Moreover, the case
claiming illegal dismissal after she resigned underscored the legitimacy of waivers and
following a transfer order to Jeddah. Hired in 1986, quitclaims when they are voluntarily entered into
Bilbao had been working as a Flight Attendant, and represent a reasonable settlement between
regularly flying between Manila and Jeddah. In employer and employee.
August 2004, due to “operational requirements,”
Saudia decided to transfer Bilbao and nine other Class Notes:
flight attendants to Jeddah effective September 1,
2004. Bilbao complied but resigned on September 7, 1. **Resignation** is voluntary and must be free
2004, believing the transfer was tantamount to from any form of coercion or intimidation.
constructive dismissal, given her age and 2. **Constructive Dismissal** occurs when an
implications on her employment stability. employee resigns due to unjustifiable actions by the
She later executed an Undertaking, acknowledging employer, making continued employment
receipt of a sum as full settlement, waiving any untenable.
future claims against Saudia. However, she filed a 3. **Waivers and Quitclaims** can be valid if they
complaint with the NLRC in July 2005 for illegal are entered into voluntarily, knowingly, and
dismissal, demanding reinstatement and represent a reasonable settlement.
compensation. The Labor Arbiter ruled in her favor,
but the NLRC reversed this decision, finding her 4. **Time of Filing Complaints**: Delay in filing
resignation to be voluntary. The Court of Appeals can influence the determination of voluntariness in
affirmed the NLRC’s ruling, leading Bilbao to resignation cases.
elevate her case to the Supreme Court (SC) through
5. **Burden of Proof**: The employee must
a petition for review.
demonstrate with concrete evidence that the
Issues: resignation was involuntary or coerced.

1. Whether the Court of Appeals erred in affirming Historical Background:

the NLRC’s decision regarding Bilbao’s voluntary
This case reflects the complex dynamics of labor
resignation.
disputes involving overseas Filipino workers and
2. Whether the transfer to Jeddah constituted international employers. It delves into the
constructive dismissal. protections afforded to employees under Philippine
Labor Law, particularly concerning resignation and
3. The validity of Bilbao’s resignation and dismissal. The decision represents a balancing act
subsequent undertaking/quitclaim. between ensuring workers’ rights and recognizing
Ruling: valid employment practices, setting a precedent for
similar future disputes.
The SC affirmed the ruling of the Court of Appeals
and the NLRC, concluding that Bilbao’s resignation
was voluntary and not a result of illegal dismissal.
The SC underscored that resignation is a voluntary
act and highlighted Bilbao’s education and
experience as factors that negated any notion of
coercion. The Court found significant proof in her
action post-resignation, including her execution of
the Undertaking, and delay in filing her complaint,
which supported Saudia’s assertion of her voluntary
resignation. Furthermore, the Court reiterated that
not all waivers and quitclaims are void against
public policy, especially when entered voluntarily
and represent a reasonable settlement.
 Ruling:
c. Just causes for
termination 1. **Serious Misconduct Justifying Dismissal:**
Imasen Philippine Manufacturing Corporation vs. Ramonchito T.
– The Supreme Court ruled that engaging in sexual intercourse at
Alcon and Joann S. Papa, G.R. No. 194884, December 3, 2014
the workplace during work hours is punitive misconduct.
Facts:
– The act was determined to be of grave and aggravated character,
1. **Initial Employment and Incident:** reflective of serious misconduct. The intimacy was public enough
to affect workplace ethics and morale directly, making it a valid
– **2001:** Imasen Philippine Manufacturing Corporation hired reason for dismissal.
Ramonchito T. Alcon and Joann S. Papa as manual welders.
2. **Employer’s Management Prerogative:**
– **October 5, 2002:** The respondents reported to work for the
second shift. Around 12:40 am, security guard Cyrus A. Altiche – The CA improperly substituted its judgment for that of Imasen’s
conducted a patrol and discovered them engaging in sexual management. The imposition of dismissal was within the
intercourse in the “Tool and Die” section. reasonable exercise of management prerogative.

2. **Discovery and Reporting of the Incident:** – Imasen’s interest in maintaining high ethical standards justified
its decision to impose dismissal.
– Altiche reported the incident to his fellow security guard,
Danilo S. Ogana, who then conducted a follow-up inspection and 3. **Reinstatement of NLRC Decision:**
observed Alcon picking up a carton used during the act.
– Supreme Court reinstated the NLRC’s decision, confirming that
– Altiche submitted a handwritten report about the incident to the respondents’ dismissal was valid and did not amount to grave
Imasen’s Finance and Administration Manager. abuse of discretion by the NLRC.

3. **Company’s Internal Proceedings:** Doctrine:

– **October 14, 2002:** Imasen issued memoranda to the – **Serious Misconduct:** Misconduct must be serious, related
respondents informing them of the charges and requesting their to the performance of the employee’s duties, and performed with
explanation. wrongful intent to justify dismissal under Article 282 of the Labor
Code. The misconduct, as in this case involving sexual acts on
– **October 22, 2002:** Another memorandum directed them to company premises, undermines workplace decorum and
attend a formal hearing, which occurred on October 30, 2002. employee respectability, warranting dismissal.
Both security guards reiterated their observations.
Class Notes:
– **December 4, 2002:** Imasen issued memoranda terminating
the respondents for “gross misconduct.” 1. **Key Elements or Concepts:**

4. **Filing and Adjudication of Illegal Dismissal Complaint:** – **Misconduct:** Improper conduct of a severe and grave
nature.
– **December 5, 2002:** Respondents filed a complaint for
illegal dismissal. – **Just Cause for Termination:** Serious misconduct under
Article 282(a) of the Labor Code.
– **December 10, 2004:** Labor Arbiter dismissed the
complaint, finding valid dismissal due to gross misconduct and – **Management Prerogative:** Allows employers to regulate all
compliance with due process. aspects of employment reasonably.

– **December 24, 2008:** NLRC affirmed the LA’s ruling upon – **Balancing Rights:** The need to protect employee tenure vs.
appeal by the respondents. the employer’s right to enforce disciplinary actions.

– Respondents filed a petition for certiorari to the CA after NLRC 2. **Legal Provisions:**
denied their motion for reconsideration.
– **Article 282 of the Labor Code:** Enumerates just causes for
5. **Court of Appeals Proceedings:** termination, including serious misconduct.

– **June 9, 2010:** CA nullified the NLRC’s decision, Historical Background:

concluding the act did not constitute serious misconduct, reducing
– Historically, this case examines the balance between protecting
penalty to three-month suspension, reinstatement without loss of
employees’ security of tenure and allowing employers reasonable
seniority and backwages (less wages corresponding to suspension
leeway to uphold company standards. This nuance has been
period).
pivotal in labor jurisprudence, signifying how evolving
– **December 22, 2010:** CA denied Imasen’s motion for workplace dynamics necessitate both protection of workers’
reconsideration. rights and recognition of managerial discretion in maintaining
workplace integrity and public morality.
Issues:

1. Is engaging in sexual intercourse inside company premises

during work hours serious misconduct justifying dismissal under
Article 282 of the Labor Code?

2. Did the CA err in substituting its judgment for that of the

employer and the NLRC?
Sterling Paper Products Enterprises, Inc. vs. KMM- The Court outlined the requisite elements for a
Katipunan and Raymond Z. Esponga: misconduct to justify termination: seriousness,
relation to work duties, and wrongful intent.
Facts: Esponga’s actions met these criteria, as they were
Sterling Paper Products Enterprises, Inc. (Sterling) disrespectful towards his supervisor, affected his
employed Raymond Z. Esponga in July 1998. In work duties, and demonstrated a clear intent to
June 2006, Sterling suspended Esponga for undermine authority.
participating in an unauthorized strike, warning him Doctrine:
against future misconduct. In June 2010, Esponga
was accused of disrespecting and failing to follow Misconduct justifying termination requires: (a)
the instructions of his supervisor, Mercy Vinoya, seriousness, (b) relation to the employee’s duties
and of not fulfilling his work duties adequately, showing unfitness to continue working, and (c)
leading to a disciplinary proceeding against him. wrongful intent. This reaffirms the established
principles governing disciplinary actions in the
Esponga was issued a notice requiring him to employer-employee relationship and underscores
explain his actions and attend a hearing. Despite the employer’s management prerogative, including
multiple rescheduling attempts, Esponga failed to imposing discipline.
attend the hearing, leading to his termination in
November 2010. Esponga, alongside KMM- Class Notes:
Katipunan, filed a complaint against Sterling for
illegal dismissal and related claims. 1. **Serious Misconduct**: Acts against a
superior that are offensive or disrespectful
The Labor Arbiter (LA) deemed the dismissal canconstitute serious misconduct, warranting
illegal, failing to find sufficient evidence supporting termination.
the cause for termination. Sterling appealed to the
National Labor Relations Commission (NLRC), 2. **Credibility of Evidence**: Initial
which reversed the LA’s decision, validating the testimonies hold more weight than
dismissal. Subsequently, the Court of Appeals (CA) subsequentretractions, especially if not proven to be
overturned the NLRC’s decision, reinstating the made under duress.
LA’s ruling that Esponga was illegally dismissed. 3. **Elements for Just Termination**: To
Sterling then appealed to the Philippine Supreme justify dismissal for misconduct, the act must
Court, challenging the CA’s decision. beserious, related to the employee’s duties, and
performed with wrongful intent.
Issues:
4. **Management Prerogative**: Employers
1. Whether Esponga’s act towards his have the right to enforce discipline within
supervisor constituted serious misconduct theworkplace, provided actions are taken in good
warrantingtermination. faith and for legitimate business interests.

2. The effect of witness retractions on the Historical Background:

credibility of evidence in labor disputes.
The evolving jurisprudence around labor disputes in
3. The application of the doctrine of serious the Philippines often balances between an
misconduct in the context of employer- employer’s authority to manage its operations and
employeerelations. the protection of employee rights against unfair
dismissal. This case reinforces the principle that
Ruling: while employee rights are safeguarded, the
The Supreme Court granted Sterling’s petition, fundamental right of employers to discipline or
holding that Esponga’s acts indeed amounted to terminate employees for legitimate causes and
serious misconduct. The Court emphasized that following due process remains integral to
uttering offensive words and displaying obscene maintaining order and respect within the workplace.
gestures towards a superior can be considered gross
misconduct. The comparison between Pesimo’s
initial statement and her subsequent retraction led
the Court to regard the initial account as more
credible.
NORMAN YABUT vs. MANILA ELECTRIC First Dominion Resources Corp. vs. Peñaranda & Vidal:
COMPANY G.R. No. 190436, 16 January 2012 A Revisitation of Lawful Dismissal and Due Process in
Employment Law
FACTS:
Facts:
Meralco Inspection Office claimed discovering The case originated from First Dominion Resources
shunting wires installed on the meter base registered Corporation (the petitioner), a textile manufacturing
under petitioner Yabut’s name. These wires company, firing Mercurio Peñaranda and Romeo Vidal
(the respondents) for repeatedly violating a company rule
allegedly allowed power transmission to the
against sleeping on duty. The procedural journey began
petitioner’s residence despite the fact that Meralco with both individuals being terminated on June 20, 2001,
had earlier disconnected his electrical service due to after each had been caught sleeping during their shift on
his failure to pay his electric bills. LA said he was two separate occasions, despite previous warnings and
illegally dismissed since the act imputed upon Yabut penalties.
was not related to the performance of his duties as a
Peñaranda and Vidal then filed separate complaints for
Meralco employee, but as a customer of the
illegal dismissal, which were consolidated. The labor
company’s electric business.
arbiter initially sided with the petitioner, dismissing the
ISSUE: complaints. However, the National Labor Relations
Commission (NLRC) reversed this decision, finding no
Whether or not an employee is illegally dismissed just cause for dismissal but stopped short of ordering
when the act he has done which caused his dismissal reinstatement or backwages. The respondents sought
further redress with the Court of Appeals, which ruled the
benefited him as a customer and not as an employee.
dismissals were illegal due to lack of just cause and
RULING: procedural due process, thus awarding full backwages and
attorney’s fees.
No. While the installation of the shunted wires
The petitioner subsequently filed a petition for review
benefited the herein petitioner as a customer of
under Rule 45 with the Supreme Court, challenging the
Meralco, his act cannot be fully severed from his appellate court’s decision on grounds of error concerning
status as the respondent’s employee. just cause and procedural due process for dismissal.
The requirement for a just cause was satisfied in this Issues:
case for violation of Meralco’s Company Code on 1. Whether the Court of Appeals erred in finding the
Employee Discipline for his act is classified as an act dismissals lacked just cause.
of dishonesty, and for the existence of just cause 2. Whether the Court of Appeals erred in ruling the
under Article 282 (a), (c), (d) and (e) of the Labor dismissals violated procedural due process.
Code. Ruling:
The Supreme Court granted the petition, reversing the
The act clearly relates to the petitioner’s
decision of the Court of Appeals and reinstating the labor
performance of his duties given his position as arbiter’s original decision. It thoroughly analyzed the
branch field representative who is equipped with applicable laws and prior jurisprudence, affirming that:
knowledge on meter operations, and who has the
duty to test electric meters and handle customers’ – **On just cause for dismissal**: The Supreme Court
violations of contract. Instead of protecting the found that the respondents’ actions constituted willful
disobedience, a valid cause for dismissal under Article 282
company’s interest, the petitioner himself used his
of the Labor Code. The Court emphasized that for
knowledge to illegally obtain electric power from
disobedience to be a just cause for dismissal, the
Meralco. His involvement in this incident deems employer’s orders must be lawful, reasonable, made
him no longer fit to continue performing his known to the employee, and must pertain to duties related
functions for respondent-company. to the employee’s job, all of which were satisfied in this
case.
We emphasize that dismissal of a dishonest
employee is to the best interest not only of the – **On procedural due process**: The Court held that the
management but also of labor. As a measure of self- petitioner complied with procedural due process
protection against acts inimical to its interest, a requirements by issuing two written notices and providing
an opportunity for the respondents to explain their side.
company has the right to dismiss its erring
The refusal of Vidal to comply and Peñaranda’s
employees. An employer cannot be compelled to
inadequate response were highlighted as indicators that
continue employing an employee guilty of acts due process had been observed.
inimical to the employer’s interest, justifying loss of
confidence in him.
Juanito Talidano vs. Falcon Maritime & Allied Ruling:
Services, Inc.
The Supreme Court granted Talidano’s petition,
Facts: reversed the Court of Appeals’ decision, and
reinstated the NLRC’s decision with modifications.
Juanito Talidano was employed by Falcon The Court found Talidano’s dismissal invalid,
Maritime and Allied Services, Inc. as a second citing the fax messages as insufficient evidence of
marine officer and assigned to M/V Phoenix Seven. neglect of duty and questioning the absence of
His employment commenced on October 15, 1996, logbook evidence. It further stated that Falcon
for a year with stipulated wage and benefits. Maritime failed to comply with the procedural due
Talidano complained to the International Transport process required for dismissing an employee. The
Federation (ITF) about discrimination, leading to Court clarified the principles surrounding forum
his dismissal on January 21, 1997. He filed a shopping, res judicata, and the propriety of filing a
complaint for illegal dismissal on October 27, second petition for certiorari based on technical
1999. Falcon Maritime argued Talidano was grounds. It addressed the procedural errors made by
dismissed due to incompetence and Falcon Maritime in its petitions and emphasized the
insubordination, supported by fax messages importance of substantive justice over
reporting his neglect of duty. They also contended technicalities.
the complaint was filed out of time, citing a
prescriptive period from a Revised POEA Doctrine:
Memorandum Circular. The Labor Arbiter
1. An employer must establish a valid cause for
dismissed Talidano’s complaint, finding him dismissal and observe procedural dueprocess, including
validly dismissed for gross neglect of duties based notice and the opportunity for the employee to be heard.
on the fax messages.
2. The principle of res judicata does not bar filing
The NLRC reversed this decision, ruling the a second petition for certiorari if the firstpetition was
dismissal illegal and pointing out the lack of dismissed on technical grounds without reaching the
probative value in the fax messages and the merits of the case.
absence of compliance with due process. Falcon
3. Forum shopping occurs when parallel remedies
Maritime’s motion for reconsideration was denied are sought for the same issue in differentforums,
by the NLRC, which rejected the argument about contingent on receiving a favorable outcome.
the complaint’s prescription. Upon taking the
matter to the Court of Appeals, Falcon Maritime Class Notes:
faced dismissal on technical grounds on its first – **Gross and Habitual Neglect**: A single act
petition but successfully got its second petition of negligence does not constitute a validground for
heard, which led to the reinstatement of the Labor dismissal; there must be a pattern of repeated failure to
Arbiter’s decision. Talidano argued that the second perform duties.
petition constituted forum shopping and was barred
– **Procedural Due Process in Dismissal**:
by res judicata.
Requires two written notices – one to specify thegrounds
Issues: for dismissal and another to inform the employee of the
decision post-hearing. – **Res Judicata and Forum
1. Whether the dismissal of Talidano was Shopping**: The doctrine of res judicata applies when a
valid and based on justifiable grounds. case is adjudicated on its merits, preventing re-litigation
of the same issue. Forum shopping involves seeking
2. Whether the procedural due process was multiple venues to obtain favorable rulings, which is
observed in Talidano’s dismissal. prohibited.

3. Whether the filing of the second petition Historical Background:

by Falcon Maritime to the Court of The case illuminates the complexities of labor disputes in
Appealsconstituted forum shopping and was barred the context of overseas employment, specifically for
by res judicata. Filipino seafarers. It highlights procedural nuances in
Philippine labor law, especially regarding appeals in
4. Whether the Court of Appeals erred in labor disputes and the standards for legal dismissal of
adjudicating the matter given its proceduralhistory employees.
and the merits of the case.
 d. Authorized causes for Doctrine:
termination This case underscores the strict requirements for
lawful dismissal on the grounds of retrenchment
Lambert Pawnbrokers and Jewelry Corporation vs. and redundancy, including the necessity of
Helen Binamira adequate notice, proof of financial distress or
operational excess, and adherence to fair and
Facts: reasonable criteria for selecting employees for
termination.
Lambert Lim, a Malaysian national owning several
businesses including Lambert Pawnbrokers and Class Notes:
Jewelry Corporation in Cebu and Bohol, dismissed
Helen Binamira from her position as an appraiser – **Article 283 of the Labor Code**:
and Vault Custodian on September 14, 1998, citing Specifies conditions for lawful termination due
business losses due to retrenchment. Helen, being toretrenchment or redundancy, including notice and
related to Lim through marriage and represented by severance pay.
her father-in-law Atty. Boler Binamira, Sr., filed a
– **Evidence of Business Losses**:
case for illegal dismissal, asserting the absence of
Requires audited financial statements to
just cause and due process. The Labor Arbiter
substantiateclaims of economic reverses justifying
originally deemed the dismissal as valid
retrenchment.
retrenchment, a decision reversed by the NLRC
upon appeal, citing lack of proper notice and – **Procedural Due Process in Employee
authorizing Helen’s reinstatement with full Termination**: Mandates at least one
backwages. Subsequent motions saw the NLRC month’snotice to both the employee and DOLE
altering its basis for dismissal to redundancy, still before effecting termination due to retrenchment or
in violation due to lack of notice. The CA redundancy.
ultimately ruled the dismissal illegal, attributing it
to neither valid retrenchment nor redundancy, – **Standards for Lawful Redundancy**:
ordering compensation to Helen including Requires evidence of superfluity of positions
backwages, separation pay, and damages. andadherence to fair selection criteria.

Issues: – **Liability in Illegal Dismissal**:

Corporations are the primary entities liable unless
1. Whether the CA erred in using certiorari badfaith or malice is proven against individual
to reverse the labor tribunals’ factual findings. officers or owners.
2. Whether the dismissal of Helen Binamira Historical Background:
was undertaken with justifiable cause andthrough
due process. This case illustrates the complexities surrounding
labor disputes, especially concerning the interplay
3. Whether Lambert Lim’s actions indicated between employer’s management prerogatives and
bad faith or malice warranting solidary liabilityfor employee’s job security rights. In the Philippines,
the illegal dismissal. where family and business dealings often intersect,
such legal battles underscore the importance of
Ruling:
clear legal doctrines to navigate the intricacies of
The Philippine Supreme Court denied the petition employment relationships, wrongful terminations,
for review, affirming the CA’s decision that Helen and the boundaries of corporate vs. individual
Binamira’s dismissal was illegal due to lack of a liability.
valid cause and failure to observe due process. The
court examined the application of retrenchment and
redundancy as grounds for dismissal, finding
neither were executed with the requisite legal
standards nor substantiated with adequate evidence.
The SC clarified that only Lambert Pawnbrokers
and Jewelry Corporation was liable for the illegal
dismissal, absolving Lim of individual liability
absent proof of malice or bad faith.
Innodata Knowledge Services, Inc. v. Socorro distinctions between verification and certification
D’Marie T. Inting, et al. against forum shopping, were addressed, with the
court adopting a liberal stance to facilitate justice.
Facts:
Doctrine:
Innodata Knowledge Services, Inc. (IKSI) engaged
in data processing and related services, undertook a This case reiterates the doctrine that the nature of
project from Applied Computer Technologies employment is determined by the activities the
(ACT) requiring the recruitment of lawyers or law employee is called to perform and the continuity of
graduates as reviewers for litigation documents. the performance rather than parties’ agreements or
Consequently, IKSI engaged multiple individuals job titles. It also expounds on the impermissibility
for this project under a five-year contract. of disguising indefinite forced leaves and
However, due to purported changes in business subsequent dismissals as lawful management
conditions and client requirements, IKSI placed prerogatives without just or authorized cause.
these employees on indefinite forced leave starting
January 7, 2010. Subsequent notices of termination Class Notes:
were sent to the employees in May 2010, citing the – **Determination of Employment Type**:
absence of work as the reason. The employees Employment contracts must align with statutory
contested this move, initiating a legal battle for definitions and the genuine nature of employment
alleged illegal dismissal, which traversed the duties, not merely the titles or terms parties agree
institutional hierarchy from the Labor Arbiter (LA) upon.
to the National Labor Relations Commission
(NLRC), and then on appeal to the Court of – **Illegal Dismissal**: Employees’ rights against
Appeals (CA), arguing each time against their unjust termination are protected, with employers
dismissal’s validity. required to substantiate dismissals based on just or
authorized causes substantively and procedurally.
Issues:
– **Liberal Interpretation of Procedural
1. Whether respondents were project employees or Requirements**: In labor cases, the court may
regular employees and if their contracts genuinely adopt a lenient approach to technical requirements
reflected the nature of their employment. to uphold substantive justice, emphasizing outcome
2. Whether respondents were illegally dismissed over form.
due to their placement on forced leave followed by – **Verification vs. Certification Against Forum
termination. Shopping**: Verification ensures the pleading’s
3. Whether the CA erred in its reversal of the allegations are made in good faith, while
NLRC’s decision affirming the LA’s ruling. certification against forum shopping aims to
prevent multiple litigations for the same cause;
4. The applicability and fulfillment of procedural non-compliance with the latter is generally
requisites in the filing and consideration of the case incurable but may be relaxed under compelling
across various legal forums. circumstances.

Ruling: Historical Background:

The Supreme Court sided with the Appellate Court, This decision reflects the judiciary’s mandate to
emphasizing that respondents were the company’s protect labor rights, emphasizing the protection
regular employees and their dismissal was against unjust dismissal and the misuse of
unfounded. It underscored that the alleged project contractual terms to circumvent employment
employment lacked consistency with the security. It demonstrates the courts’ role in
employers’ actions, particularly involving the interpreting contractual and statutory provisions to
employees in tasks beyond the scope of the initially protect the substantive rights of workers within the
identified project without corresponding new historical context of safeguarding the labor force’s
contracts. The Multiplier declared that the forced welfare in the Philippines.
leave and eventual termination, cited as cost-saving
measures due to decreased workload, were
effectively a disguise for illegal dismissal,
compounded by the lack of proper notice and due
process. Further, procedural issues, including the
Sanoh Fulton Phils., Inc. and Mr. Eddie Jose vs. 2. The closure or cessation of a business operation
Emmanuel Bernardo and Samuel Taghoy: must be for bona fide reasons to uphold the rights
of employees against unlawful dismissal.
Facts:
Class Notes:
Sanoh Fulton Phils., Inc. (Sanoh), a manufacturer
of automotive parts and wire condensers, decided – **Elements of a Crime in Illegal Dismissal
to phase out its Wire Condenser Department due to Cases**: Substantial loss, Imminent loss, Necessity
job order cancellations. On 22 December 2003, 17 and effectiveness in preventing losses, Proof of
employees were informed of their retrenchment loss.
effective 22 January 2004. These employees, all
union members, soon filed complaints for illegal – **Essential Principles in Civil Cases:**
dismissal. Subsequent grievance and conciliation Management’s prerogative in retrenchment or
conferences failed to yield an amicable settlement, closure, Burden of proof on the employer, Good
leading to the lodging of separate complaints in the faith in business decisions.
National Labor Relations Commission (NLRC). – **Regulations**: Article 283 of the Philippine
The Labor Arbiter dismissed the claims of illegal Labor Code outlines the legal grounds and
dismissal, a decision affirmed by the NLRC on procedural requirements for valid retrenchment and
appeal. However, the Court of Appeals reversed closure of business.
these rulings, finding the dismissal illegal and
mandating reinstatement with full backwages, or – It specifies that employers must serve written
compensation in lieu thereof. notice to employees and the Department of Labor
and Employment at least one month before the
Issues: intended date of retrenchment or closure.
1. Whether the retrenchment of employees by – Employees affected by retrenchment due to
Sanoh was a valid exercise of management business losses are entitled to separation pay
prerogative due to serious business losses. equivalent to their one-month pay or at least one-
2. Whether Sanoh fulfilled the legal requirements half month pay for every year of service, whichever
for valid retrenchment. is higher.

3. Whether the closure of the Wire Condenser Historical Background:

Department by Sanoh was conducted in good faith Retrenchment and closure are delicate employment
and for bona fide reasons. issues with significant implications for both
Ruling: employers and employees. In balancing these
interests, Philippine jurisprudence has continually
The Supreme Court denied Sanoh’s petition, evolved, emphasizing the protection of workers’
upholding the appellate court’s decision but with rights while recognizing the prerogatives of
modifications on the awarding of backwages and management. This case reaffirms the stringent
separation pay. The Court determined that Sanoh requirements and scrutiny applied in cases of
failed to substantiate its claims of serious business retrenchment and business closure, highlighting the
losses warranting the retrenchment. Sanoh also paramountcy of good faith and the substantiation of
didn’t satisfy the jurisprudential standards for claimed business losses.
losses to justify retrenchment. Furthermore,
contrary to Sanoh’s assertions, evidence showed
the Wire Condenser Department continued
operations and even engaged in overtime work,
negating claims of its closure due to business
losses.

Doctrine:

1. For retrenchment to be deemed valid, it must be

necessary to prevent losses or impending losses,
with the employer bearing the burden of proof.
 – The retirements were valid under the CBA, which
remained effective post-expiration until a new
Lopez Sugar Corporation vs. Federation of Free agreement was reached.
Workers and Others
– The petitioner could not justify the retrenchment
Facts: as a last resort to prevent losses, partly because
The Lopez Sugar Corporation (the “Petitioner”) alternative cost-saving measures were not
sought to retrench 27 of its employees as part of a sufficiently explored.
cost-reduction program, claiming economic Doctrine:
hardships necessitated such action. This
retrenchment was challenged by the Federation of The case confirmed that for retrenchment to be
Free Workers (“FFW”) and the Philippine Labor legally justified, substantial and imminent losses
Union Association (“PLUA-NACUSIP”), who must be demonstrated with convincing evidence.
argued that the terminations violated labor laws and Furthermore, it reiterated the principle that rights
were an attempt at union-busting. The petitioner and obligations under an expired CBA continue
had initially filed a combined report on retirement until a new agreement is negotiated.
and an application for clearance to retrench with
the Ministry of Labor and Employment, citing Class Notes:
declining sales and economic issues as justification. – **Substantial and Imminent Losses for
Concurrently, FFW filed a complaint against the Retrenchment**: Employers must show substantial
company for unfair labor practices. The Labor and reasonably imminent losses with convincing
Arbiter, and subsequently the National Labor evidence to justify retrenchment as a lawful action.
Relations Commission (NLRC), found that the
company failed to substantiate its claim of – **Effect of Expired CBA**: Rights and
economic duress with sufficient evidence and thus obligations under an expired CBA continue in
decided against allowing the retrenchment, effect until a new CBA is agreed upon.
ordering reinstatement and full backwages for
– **Economic Justification**: Mere anticipation of
affected employees.
losses without concrete evidence is insufficient to
Issues: validate retrenchment due to economic reasons.

1. Whether the retrenchment was justified under the – **Retirement Under CBA**: Employers’ right to
circumstances to prevent losses, as claimed by the retire employees must be clearly stipulated in the
petitioner. CBA and validly applied according to its terms
even after the CBA’s expiration.
2. The validity of retirements made under a
provision of a Collective Bargaining Agreement Historical Background:
(CBA) that had ostensibly expired.
This case emerged during a period of economic
3. The adequacy and credibility of the evidence uncertainty, reflecting the challenges of balancing
provided to justify retrenchment due to economic employers’ need for financial viability with
hardship. workers’ rights to job security. The decision
underscores the judiciary’s role in mediating such
4. The relevance and applicability of the claims of conflicts and enforcing labor rights protections.
having organized a pool of “extra workers” to
counter the argument of hiring casuals post-
retrenchment.

Ruling:

The Supreme Court partially granted the petition,

upholding the decision of the NLRC with
modifications regarding the retirees under the CBA
provision. It held:

– The petitioner failed to substantiate claims of

economic hardship with adequate evidence, making
the retrenchment legally ineffective.
Arabit et al. vs. Jardine Pacific Finance, Inc.: decision underscored the necessity for employers to
follow stringent guidelines before implementing
Facts: redundancy, ensuring actions are not arbitrary or in
The crux of this case involves the termination of bad faith.
employment of Eugene S. Arabit and six other Doctrine:
regular employees of Jardine Pacific Finance, Inc.
(previously MB Finance), under the pretext of a This case reinforces several legal principles:
redundancy program. These petitioners, actively
involved in their company’s union, were laid off on 1. The distinction between redundancy and
May 30, 1999, purportedly due to the company’s retrenchment as legitimate causes for dismissal,
financial losses leading to a restructuring process. necessitating specific criteria and justification for
In an interesting turn, Jardine subsequently the action.
employed contractual workers to perform the 2. The employer’s prerogative to reorganize or
functions previously held by the petitioners, restructure must adhere to fair and reasonable
leading to accusations of unfair labor practices and standards, ensuring no violation of employees’
illegal dismissal. rights to security of tenure and protection from
The dispute over the termination’s legality involved arbitrary dismissal.
several legal battles, beginning with the filing of a 3. Employers must provide clear, justifiable criteria
complaint by the petitioners alongside their union for selecting employees for redundancy to show
against Jardine with the National Labor Relations good faith, ensuring the process is not tainted by
Commission (NLRC) on June 1, 1999. Through the unfair labor practices.
layers of legal proceedings, the decisions
vacillated, with the Labor Arbiter ruling in favor of Class Notes:
the petitioners, which the NLRC upheld. However,
– **Redundancy vs. Retrenchment**: Understand
this decision was overturned by the Court of
the legal definitions, purposes, and requirements
Appeals (CA), prompting the petitioners to seek
for implementing either action justifiably.
redress from the Philippine Supreme Court.
– **Security of Tenure**: Employees have the
Issues:
right to be protected against unjust termination of
1. Whether the petitioners were illegally dismissed service.
under the guise of redundancy.
– **Management Prerogative**: While employers
2. Whether the employment of contractual workers have the right to reorganize for economic
following the petitioners’ dismissal constituted efficiency, this must not infringe on the employees’
unfair labor practice by Jardine. rights, necessitating transparency and fairness.

3. Whether the Court of Appeals erred in reversing Historical Background:

the NLRC’s decision that supported the petitioners’
This legal battle highlights the complexities
claims of illegal dismissal.
surrounding labor practices in the Philippines,
Ruling: emphasizing the balance between management’s
prerogatives and worker rights. While economic
The Philippine Supreme Court granted the petition, downturns and operational efficiencies necessitate
reversing the CA’s decision and reinstating the tough decisions, this case reiterates the paramount
NLRC ruling in favor of the petitioners. The Court importance of adhering to legal standards and
highlighted the flawed understanding of ethical practices in labor relations.
redundancy and retrenchment by the respondent,
underscoring the specificities and necessities
behind each cause for dismissal. It criticized
Jardine for not providing a clear rationale for
singling out the petitioners’ positions as redundant
and failing to establish fair and reasonable criteria
in the selection process for redundancy. The hiring
of contractual workers post-dismissals contradicted
the claim of redundancy, thereby violating the
petitioners’ rights to security of tenure. The
Enrique Marco G. Yulo vs. Concentrix Daksh The Supreme Court reinstated the decisions of the
Services Philippines, Inc.: Labor Arbiter and the NLRC, finding Yulo to have
been illegally dismissed.
Facts:
Doctrine:
The case concerns Enrique Marco G. Yulo
(petitioner), who was employed by Concentrix The Supreme Court reiterated the doctrine
Daksh Services Philippines, Inc. (respondent), concerning termination due to redundancy,
initially working under the Amazon.com account. underscoring the requirements for lawful
On February 17, 2015, Yulo was informed about execution: written notice to the employees and the
his potential redundancy due to a business decision Department of Labor and Employment, payment of
to “right size” the Amazon account’s workforce. separation pay, demonstration of good faith, and
Despite promises of redeployment, Yulo was employment of fair and reasonable criteria in
eventually terminated on grounds of redundancy selecting positions for redundancy.
after failing to secure a position in another account.
Class Notes:
Yulo filed a complaint against the respondent for
illegal dismissal and other related claims. The – **Redundancy as a Ground for Termination**:
Labor Arbiter ruled in favor of Yulo, which was Redundancy occurs when an employee’s position
affirmed by the National Labor Relations becomes superfluous, emphasizing the need for a
Commission (NLRC). However, the Court of genuine business necessity.
Appeals (CA) reversed these decisions, finding – **Requirements for a Valid Redundancy
Yulo’s termination to be legal and in good faith. Program**:
Yulo then appealed to the Supreme Court, – Procedural: Proper notice to the employee and the
contesting the CA’s decision. DOLE, and payment of appropriate separation pay.
Issues: – Substantive: The demonstration of good faith in
1. Whether the CA erred in ruling that Yulo’s abolishing the redundant positions, and the use of
dismissal based on redundancy was legally fair and reasonable criteria in selecting which
executed. positions are redundant.

2. Whether the respondent demonstrated good faith **Critical Legal Provisions**:

and utilized fair and reasonable criteria in – **Article 298 (formerly 283) of the Philippine
executing the redundancy program leading to Labor Code**: Outlines the legal grounds and
Yulo’s termination. procedures for the termination of employment due
Ruling: to redundancy, including the entitlement to
separation pay and the necessity for a one-month
The Supreme Court sided with Yulo, ruling that his notice period.
dismissal was illegal. The Court found that the
respondent failed to prove the existence of a Historical Background:
genuine redundancy situation justifying Yulo’s This case highlights the intricate balance between
termination. The respondent’s lack of evidence to an employer’s management prerogative to
substantiate the redundancy claim, failure to exhibit restructure its workforce and the protection of
good faith, and the absence of fair and reasonable employee rights under Philippine labor law. It
criteria in selecting employees for termination were emphasizes the judiciary’s role in scrutinizing the
pivotal in the Court’s decision. genuine nature of redundancy claims to prevent the
The Court specifically criticized the respondent’s circumvention of labor protections.
reliance on an internal document, which was
deemed insufficient to demonstrate a bona fide
redundancy program. Additionally, the
respondent’s failure to present comprehensive
evidence, such as a new staffing pattern or
feasibility studies, further weakened their position.
Philippine National Bank vs. Jumelito T. Dalmacio PNB complied with procedural requirements and
that Dalmacio’s Deed of Quitclaim and Release
Facts: barred his claims for reinstatement. Regarding
Jumelito T. Dalmacio and Emma R. Martinez, Dalmacio’s GSIS Gratuity Pay, the Court affirmed
initially employed by the National Service the CA’s ruling that it should not have been
Corporation (a PNB subsidiary), eventually held deducted from his separation package, as it is
positions within the Philippine National Bank separate and distinct from any separation pay due
(PNB) as an Information Technology (IT) Officer to mandatory GSIS contributions by government
and a Junior IT Field Analyst, respectively. Their employees.
employment was terminated on September 15, Doctrine:
2005, following PNB’s implementation of a
redundancy program. This prompted Dalmacio and In redundancy cases, valid implementation requires
Martinez to file a complaint for illegal dismissal, compliance with procedural requisites such as
underpayment of separation pay and retirement notice to both employees and the Department of
benefits, illegal deduction, nonpayment of Labor and Employment (DOLE) and payment of
provident fund, and damages with attorney’s fees. separation pay, predicated on good faith and the
application of fair and reasonable criteria for
The Labor Arbiter (LA) Romelita N. Rioflorido determining redundancy. Additionally, quitclaims,
ruled on June 30, 2009, that PNB’s redundancy when voluntarily entered into with reasonable
program was valid, prompting an appeal by consideration, are generally upheld barring
Dalmacio and Martinez to the National Labor evidence of fraud or coercion. Lastly, benefits
Relations Commission (NLRC), which also mandated by law, such as GSIS Gratuity Pay,
affirmed the LA’s decision on March 30, 2010. The cannot be deducted unlawfully from an employee’s
NLRC found no evidence of bad faith in PNB’s separation package.
redundancy program. Unsuccessful in their Motion
for Reconsideration with the NLRC, Dalmacio Class Notes:
filed a Petition for Certiorari with the Court of
Appeals (CA), which on September 21, 2011, – **Redundancy as a Ground for Termination**:
affirmed in part the NLRC’s decision but modified Requires compliance with specific procedural
the separation package awarded to Dalmacio, requisites including adequate notice and fair criteria
notably regarding the GSIS Gratuity Pay’s for selection.
deduction. – **Management Prerogative in Redundancy**:
Both parties appealed the CA’s decision to the Courts accord respect to business judgments unless
Supreme Court, with Dalmacio contesting the shown to violate labor laws or general principles of
validity of the redundancy program and the fairness.
computation of his separation pay, and PNB – **Deed of Quitclaim and Release**: Effectively
challenging the CA’s equity jurisdiction and the bars further claims when entered into voluntarily,
decision to order the return of Dalmacio’s GSIS knowingly, and for reasonable consideration.
Gratuity Pay.
– **GSIS Gratuity Pay**: Distinct from separation
Issues: benefits and must not be deducted from the latter.
1. The validity of PNB’s implementation of its Historical Background:
redundancy program.
The case reflects the legal complexities
2. The correctness of the CA’s order for PNB to surrounding labor relations in the Philippines,
return Dalmacio’s GSIS Gratuity Pay. specifically regarding the rights and protections
Rling: afforded to employees vis-a-vis the operational
prerogatives of employers. It underscores the
The Supreme Court denied both appeals, affirming judiciary’s careful balancing act between
the decisions of the lower courts (LA, NLRC, and safeguarding employee rights and respecting
CA) that PNB validly implemented its redundancy business judgments under the country’s labor laws
program. The Court emphasized respect for the and jurisprudence.
business judgment in implementing redundancy
programs, barring evidence of violation of labor
laws or principles of fairness. It also confirmed that