LABOR RELATIONS LAW

Case Digest Compilation for Midterms

Table of Contents
I. THE APPLICABLE LAWS............................................................................................................................10
II. GENERAL PRINCIPLES..............................................................................................................................10
Singer Sewing Machine vs. NLRC..................................................................................................................10
Manila Golf Club vs. IAC...............................................................................................................................10
Encyclopedia Britanica vs. NLRC...................................................................................................................11
Carungcong vs. Sunlife.................................................................................................................................11
Ramos vs. CA................................................................................................................................................12
Sonza vs. ABS-CBN.......................................................................................................................................12
Lazaro vs. Social Security Commission.........................................................................................................13
Phil. Global Comm. vs. De Vera....................................................................................................................13
ABS-CBN vs. Nazareno.................................................................................................................................14
Francisco vs. NLRC........................................................................................................................................15
Nogales et. al. vs. Capitol Medical Center et. al...........................................................................................16
Coca-Cola Bottlers Phils. vs. Dr. Climaco......................................................................................................16
Calamba Medical Center vs. NLRC et. al.......................................................................................................17
Escasinas et. al. vs. Shangri-la......................................................................................................................18
Tongko vs. The Manufacturer’s Life Insurance Co., Inc. November 7, 2008................................................18
Atok Big Wedge Company vs. Gison............................................................................................................19
Semblante et al., vs. Court of Appeals, et al.................................................................................................20
Jose Mel Bernarte vs. Philippine Basketball Association (PBA), Jose Emmanuel Eala, and Perry Martinez..21
Cesar Lirio vs. Wilmer Genovia.....................................................................................................................22
Charlie Jao vs BBC Products Sales Inc...........................................................................................................23
Legend Hotel (Manila) vs. Realuyo...............................................................................................................25
The New Philippine Skylanders, Inc. vs. Dakila.............................................................................................25
Tesoro et al. vs. Metro Manila Retreaders, Inc. et al...................................................................................26
III. RIGHT TO SECURITY OF TENURE............................................................................................................27
ALU-TUCP vs. NLRC......................................................................................................................................27
Cosmos Bottling Corp., vs NLRC...................................................................................................................28
Pure Foods Corporation vs. NLRC.................................................................................................................28
Phil. Fruit & Vegetable Industries vs. NLRC..................................................................................................29
Philips Semiconductor vs. Fardiquela...........................................................................................................30
Alcira vs. NLRC..............................................................................................................................................31

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 LABOR RELATIONS LAW
Case Digest Compilation for Midterms

Mitsubishi Motors Phils. vs. Chrysler Phil Labor Union................................................................................32

Pangilinan vs. General Milling Co.................................................................................................................33
Hacienda Bino/Hortencia Stark vs. Cuenca..................................................................................................34
Philippine Global Communications Inc. vs. De Vera.....................................................................................34
Lacuesta vs. Ateneo de Manila.....................................................................................................................35
Posedion Fishing/Terry De Jesus vs. NLRC...................................................................................................36
Cebu Metal Corp., vs. Saliling.......................................................................................................................37
Hermonias L. Liganza vs. RBL Shipyard Corporation....................................................................................38
Fabeza vs. San Miguel Corporation..............................................................................................................39
Soriano vs. NLRC..........................................................................................................................................40
Caseres vs. Universal Robina Sugar Milling Corp..........................................................................................40
Pier 8 Arrastre & Stevedoring Services, Inc. vs Boclot..................................................................................41
Pacquing vs. Coca-Cola Bottlers Phils., Inc.;.................................................................................................43
Agusan Del Norte Electronic vs. Cagampang................................................................................................44
William Uy Construction et. al vs. Trinidad..................................................................................................44
Dacuital et al, Vs. L.M. Camus Engineering Corp..........................................................................................45
Millennium Erectors Corporation vs. Magallanes........................................................................................46
Exodus International Construction Corp. vs. Biscocho et. Al........................................................................48
Leyte Geothermal Power Progressive Employees Union vs. Phil National Oil Co.........................................49
St. Paul College Quezon City vs. Spouses Ancheta.......................................................................................50
Lanvyl Fishing Enterprises, Inc. vs. Ariola et. al............................................................................................52
D.M. Consunji, Inc. vs. Jasmin......................................................................................................................53
Gapayao vs. Fulo..........................................................................................................................................54
Concrete Solutions, Inc. et al. vs. Cabusas...................................................................................................55
D.M. Consunji vs. Bello.................................................................................................................................56
Herrera-Manaois vs. St. Scholasticas College...............................................................................................57
Universal Robina Sugar Milling Corp. vs. Acibo et al....................................................................................58
Noblejas vs. Italian Maritime Academy Phils...............................................................................................59
Omni Hauling Services Inc v Tortoles...........................................................................................................60
Hacienda Ledd vs. Villegas...........................................................................................................................60
IV. MANAGEMENT PREROGATIVE..............................................................................................................61
Dosch vs. NLRC.............................................................................................................................................61
PT&T vs. Court of Appeals............................................................................................................................62

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Case Digest Compilation for Midterms

Mendoza vs. Rural Bank of Lucban..............................................................................................................62

Duncan Association of Detailman vs. Glaxo Wellcome Phils........................................................................63
PLDT vs. Paquio............................................................................................................................................64
Star Paper Corp., vs. Simbol.........................................................................................................................65
Rivera vs. Solidbank.....................................................................................................................................65
Daisy B. Tiu vs.Platinum Plans Phil., Inc........................................................................................................67
Duldulao vs. Court of Appeals......................................................................................................................68
Almario vs. Philippine Airlines......................................................................................................................69
Bisig Manggagawa sa Tryco vs. NLRC...........................................................................................................70
Manila Electric Co. vs. Lim............................................................................................................................70
Bello vs. Bonifacio Security Services, Inc......................................................................................................71
Manila Pavilion Hotel vs. Delada..................................................................................................................73
Barba vs. Liceo de Cagayan University.........................................................................................................74
Best Wear Garments vs. De Lemos..............................................................................................................75
Royal Plant Workers Union vs. Coca-Cola Bottlers Phils., Inc. -Cebu Plant...................................................76
Peckson vs. Robinsons Supermarket Corp...................................................................................................77
V. TERMINATION OF EMPLOYMENT...........................................................................................................77
Retuya vs. NLRC...........................................................................................................................................77
Agabon vs. NLRC..........................................................................................................................................78
Jaka Food Processing vs. Pacot....................................................................................................................79
Mauricio vs. NLRC........................................................................................................................................79
Industrial Timber Corp. vs. Ababon..............................................................................................................80
Equitable Bank vs. Sadac..............................................................................................................................81
Heirs of Sara Lee vs. Rey..............................................................................................................................81
Galaxie Steel Workers Union vs. NLRC.........................................................................................................82
Sy vs. Metrobank.........................................................................................................................................83
King of Kings Transport vs. NLRC..................................................................................................................83
Asian Terminal vs. NLRC...............................................................................................................................85
Smart Communications vs. Astorga.............................................................................................................86
RB Michael Press vs. Galit............................................................................................................................87
School of the Holy Spirit of Q.C. vs. Taguiam...............................................................................................88
John Hancock Life Insurance Corp. vs. Davis................................................................................................89
Yrasuegui vs. Phil. Airlines............................................................................................................................89

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 LABOR RELATIONS LAW
Case Digest Compilation for Midterms

Garcia vs. PAL...............................................................................................................................................90

Perez vs. PT&T Co........................................................................................................................................91
Martinez vs. B&B Fish Broker.......................................................................................................................92
Plantation Bay Resort and Spa vs. Dubrico..................................................................................................93
Fulache vs. ABS-CBN Broadcasting Corp......................................................................................................95
Ancheta vs. Destinay Financial Plans, Inc.....................................................................................................96
Javellana, Jr. vs. Belen..................................................................................................................................97
Nacague vs. Sulpicio Lines, Inc.....................................................................................................................98
St. Mary’s Academy of Dipolog City vs. Palacio............................................................................................99
Manila Mining Corp. Employees Assoc.-FFW vs. Manila Mining Corp.........................................................99
Robinsons Galleria/Robinsons Supermarket Corporation vs. Ranchez......................................................100
Morales vs. Harbour Centre Port Terminal................................................................................................101
Mansion Printing vs. Bitara........................................................................................................................103
Manila Electric Company vs. Beltran..........................................................................................................103
Bank Of Lubao, Inc. vs. Manabat................................................................................................................105
Canadian Opportunities Unlimited, Inc. vs. Dalangin, Jr............................................................................106
Manila Electric Company vs. Gala..............................................................................................................108
Aro vs. NLRC...............................................................................................................................................109
Ymbong VS ABS-CBN Broadcasting Corp....................................................................................................111
Blue Sky Trading Company vs. Blas............................................................................................................112
International Management Services vs. Logarta........................................................................................113
Jiao vs. NLRC..............................................................................................................................................114
Realda vs. New Age Graphics Inc...............................................................................................................115
Mirant vs Caro;...........................................................................................................................................116
Kakampi & Its Members, Panuelos, et al. vs. Kingspoint Express and Logistic...........................................117
Waterfront Cebu City Hotel vs. Jimenez....................................................................................................118
Ramirez vs. Mar Fishing Co., Inc.................................................................................................................119
Prudential Guarantee & Assurance Employee Labor Union vs. NLRC........................................................120
Paulino vs. NLRC.........................................................................................................................................121
Manila Electric Co. vs. Dejan......................................................................................................................122
Apo Cement Corporation vs. Baptisma......................................................................................................124
Cosmos Bottling vs. Fermin........................................................................................................................125
Reyes-Ravel vs. Philippine Luen Thai Holdings...........................................................................................126

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 LABOR RELATIONS LAW
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Omar Verdadero vs. Barney Autolines Group of Companies Transport, Inc..............................................126

Naranjo vs. Biomedica Health Care, Inc.....................................................................................................127
The New Philippine Skylanders, Inc. vs. Dakila...........................................................................................128
Morales Vs. Metropolitan Bank and Trust Company.................................................................................129
Kakampi & Its Members Panuelos et al. vs. Kingspoint Express And Logistics...........................................130
Sampaguita Auto Transport Corp. vs. NLRC...............................................................................................131
Philippine Holdings Inc. vs. Episcope..........................................................................................................132
The Orchard Golf And Country Club vs. Francisco......................................................................................133
Torres vs. Rural Bank of San Juan Inc. et al................................................................................................134
The Orchard Golf & Country Club vs. Francisco.........................................................................................135
Banares vs. Tabaco Womens Transport Service Cooperative....................................................................135
Reyes, et al., vs. RP Guardians security Agency Inc....................................................................................136
Celdran vs. Forza Integrated Services et al.................................................................................................136
Surigao Del Norte Electric Cooperative Inc. vs. Gonzaga...........................................................................137
Univac Developments Inc. vs. Soriano.......................................................................................................139
Unilever Phils vs. Rivera.............................................................................................................................140
Samar-med Distribution vs. NLRC, et al.....................................................................................................140
Naranjo et al, vs. Biomedica Health Care Inc.............................................................................................141
Manila Jockey Club Inc. vs. Trajano............................................................................................................142
Fianza vs. NLRC et al...................................................................................................................................143
Pasos vs. Phil National Construction Corp..................................................................................................144
Universal Robina Corp. vs. Castillo.............................................................................................................145
Martinez vs. Central Pangasinan Electric Cooperative...............................................................................145
Zuellig Pharma Corp vs. Sibal et al.............................................................................................................146
Zuellig Freight & Cargo System vs. NLRC,...................................................................................................147
Abbott Laboratrories Phils et al., Vs. Alcaraz..............................................................................................147
Manila Polo Club Employees Union vs. Manila Polo Club..........................................................................148
Canedo vs. Kampilan Security & Detective Agency Inc. et al......................................................................149
Sanoh Fulton Phils Inc. et al., vs. Bernardo et al........................................................................................150
Daabay vs.Coca-Cola Bottlers Phils............................................................................................................151
MZR Industries et al., vs. Colambot............................................................................................................152
Integrated Micorelctronics Inc. vs. Pionella...............................................................................................153
Asia Brewery Inc. vs. Tunay na Pagkakaisa ng Manggagawa sa Asia..........................................................153

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 LABOR RELATIONS LAW
Case Digest Compilation for Midterms

Hormillosa vs. Coca-Cola Bottlers Phils......................................................................................................154

Abbott Laboratories Phils. vs. Alcaraz........................................................................................................155
Gemina Jr vs. bankwise Inc. et al................................................................................................................156
Baguio Central University vs. Gallente,......................................................................................................157
International School Manila et al., vs. International School Alliance of Educators et al.............................158
Dreamland Hotel Resort vs. Johnson.........................................................................................................159
Castillo et al., vs. Prudentialife Plans Inc....................................................................................................161
Unibersidad De Sta Isabel vs. Sambajon, Jr................................................................................................162
Wenphil Corp., vs. Abing, et al...................................................................................................................164
Arabit et al., vs. Jardine Pacific Finance Inc................................................................................................166
Mirant (Philippines) Corp., et al., vs. Caro..................................................................................................168
Libcap Marketing Corp v Baquial................................................................................................................170
Ampeloquio vs. Jaka Distribution Inc.........................................................................................................170
LIM v HMR Phils Inc....................................................................................................................................171
BENSON INDUSTRIES EMPLOYEES UNION-ALU-TUCP AND/OR Vilma Genon et al., vs BENSON
INDUSTRIES, INC........................................................................................................................................172
Montinola vs. PAL,.....................................................................................................................................173
VI. SUSPENSION OF BUSINESS OPERATIONS.............................................................................................174
MINDANAO TERMINAL & BROKERAGE SERVICE, INC. VS. NAGKAHIUSANG MAMUMUO SA MINTERBRO-
SOUTHERN PHILS. FEDERATION OF LABOR................................................................................................174
LEOPARD SECURITY AND INVESTIGATION AGENCY VS. QUITOY................................................................175
SKM ART CRAFT CORP. VS. BAUCA.............................................................................................................175
NAVOTAS SHIPYARD CORP. VS. MONTALLANA..........................................................................................176
EMERITUS SECURITY & MAINTENANCE SYSTEMS, INC. VS. DAILIG............................................................177
Lopez v Irvine Construction Corp...............................................................................................................178
EXOCET SECURITY AND ALLIED SERVICES CORPORATION and/or MA. TERESA MARCELO, VS ARMANDO D.
SERRANO....................................................................................................................................................179
VII. DISEASE AS A GROUND FOR TERMINATION.......................................................................................180
Sy vs. Court of Appeals...............................................................................................................................180
Manly Express, Inc. vs. Payong...................................................................................................................181
Duterte vs. Kingswood Trading Co.............................................................................................................182
Villaruel vs. Yeo Han Guan.........................................................................................................................182
Deoferio vs. Intel Technology Phils.,..........................................................................................................184
VIII. OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION............................................................185

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 LABOR RELATIONS LAW
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Pantranco North Express, Inc. vs. NLRC.....................................................................................................185

Cainta Catholic School vs. Cainta Catholic School Employees Union.........................................................185
Alpha C. Jaculbe vs. Silliman University......................................................................................................186
Globe Telecom vs. Crisologo......................................................................................................................188
BMG Records Phils. vs. Aparecio................................................................................................................188
Cercado vs. UNIPROM, Inc.........................................................................................................................189
Skippers United Pacific vs. Doza et. al........................................................................................................190
Auza, Jr. et al. vs. Mol Phils., Inc.................................................................................................................191
Gan vs. Galderma Philippines, Inc..............................................................................................................192
Padillo vs. Rural bank of Nabunturan, Inc..................................................................................................193
Intel Technology Phils Inc. vs. NLRC et al...................................................................................................193
Sutherland & Global Services Phils Inc., vs. Labrador.................................................................................194
Chiang Kai Shek College et al., vs. Torres...................................................................................................195
IX. PRESCRIPTION OF CLAIMS...................................................................................................................196
Ludo & Luym vs. Saornido..........................................................................................................................196
Degamo vs. Avant Lard Shipping Lines.......................................................................................................197
Intercontinental Broadcasting Corp., vs. Panganiban................................................................................197
Far East Agricultural Supply, Inc. vs. Lebatique..........................................................................................198
Victory Liner vs. Race; G.R. No. 164820.....................................................................................................199
J.K. Mercado & Sons Agricultural Enterprises vs. Hon. Sto. Tomas............................................................199
Reyes vs. NLRC, CCBPI................................................................................................................................200
LWV Construction Corp. vs. Dupo..............................................................................................................201
PLDT vs. Roberto R. Pingol.........................................................................................................................202
Medline Management, Inc. vs. Roslinda....................................................................................................203
University of the East vs. University of the East Employees' Association...................................................204
X. JURISDICTION OF THE LABOR ARBITER.................................................................................................205
Tolosa vs. NLRC;.........................................................................................................................................205
Austria vs. NLRC;........................................................................................................................................205
Eviota vs. Court of Appeals;.......................................................................................................................207
Dynamic Signmaker Outdoor Advertising Services vs. Potongan;..............................................................208
Metromedia Times Corp. vs. Pastorin;.......................................................................................................209
Yusen Air & Sea Service Phils vs. Villamor;.................................................................................................210
Duty Free Philippines vs. Mojica;...............................................................................................................211

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Easycall Communication Phils. vs. King;.....................................................................................................212

San Miguel Foods Inc. vs. San Miguel Corp Employees Union – PTGWO;..................................................213
Leyte IV Electric Cooperative, Inc. vs. LEYECO IV Employees Union-ALU;..................................................214
Atty. Garcia vs. Eastern Telecommunications Phils., et al.;........................................................................217
Halaguena et al., vs. Phil Airlines;..............................................................................................................218
Okol vs. Slimmer’s World International et al.;............................................................................................220
Hugo et al. vs. Light Rail Transit Authority;................................................................................................221
Matling Industrial and Commercial Corporation et. al. vs.  Coros;.............................................................222
Manila Electric Company et. al. vs. Rosario Gopez Lim;.............................................................................223
Hongkong and Shanghai Banking Corp. vs. Sps. Broqueza;........................................................................224
Real vs. Sangu Phils, Inc. et. al;...................................................................................................................225
Portillo vs. Rudolf Lietz, Inc. et al.;.............................................................................................................226
Ace Navigation Co., Inc. et al. vs. Fernandez;.............................................................................................227
Cosare vs. Broadcom Asia, Inc....................................................................................................................228
Amecos Innovators Inc. vs lopez................................................................................................................228
XI. 2011 NLRC RULES OF PROCEDURE.......................................................................................................230
ISLRIZ Trading/Lu vs. Capade;....................................................................................................................230
Panlilio et al. vs. RTC Br. 51, City of manila;...............................................................................................231
Ando vs. Campo;........................................................................................................................................232
Exodus International Construction Corp. vs. Biscocho;..............................................................................233
Pfizer, Inc. vs. Velasco;...............................................................................................................................234
Luna vs. Allado Construction Co., Inc.;.......................................................................................................237
Social Security Commission vs. Rizal Poultry et al.;....................................................................................239
University Plans, Inc. vs. Solano;................................................................................................................240
BPI Employees Union – Metro manila vs. Bank of the Phil. Islands;...........................................................241
Aujero vs. Phil. Communications Satellite Corp.;.......................................................................................242
Sarona vs. NLRC;........................................................................................................................................243
Salenga et al. vs. CA;..................................................................................................................................244
Lockheed Detective & Watchman Agency vs. University of the Phils.;......................................................244
3rd Alert Security and Detective Services, Inc. vs. Navia;............................................................................245
Radio Philippines Network, Inc. vs. Yap;....................................................................................................246
Gonzales vs. Solid Cement Corp.;...............................................................................................................247
Martos vs. new San Jose Builders;.............................................................................................................248

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 LABOR RELATIONS LAW
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Loon et al. vs. Power Masters, Inc.;............................................................................................................249

Lepanto Consolidated Mining Corp. vs. Icao;.............................................................................................252
Building Care Corp. vs. Macaraeg;.............................................................................................................253
CO SAY COCO PRODUCTS PHILS INC. vs BALTAZAR;...................................................................................254
OLORES vs MANILA DOCTORS COLLEGE;...................................................................................................257
Arabit vs Jardine Pacific Finance Inc.;.........................................................................................................262
Mirant vs Caro;...........................................................................................................................................263
Castro Jr. vs. Ateneo de Naga University et al.,..........................................................................................263
Phil. Touristers Inc et al., vs. Mas Transit Workers Union-ANGLO-KMU....................................................264

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 LABOR RELATIONS LAW
Case Digest Compilation for Midterms

I. THE APPLICABLE LAWS

II. GENERAL PRINCIPLES

Singer Sewing Machine vs. NLRC
G.R. No. 91307 January 24, 1991

FACTS:
Singer Machine Collectors Union-Baguio (SIMACUBA), the respondent union, filed a petition for direct certification as the sole and
exclusive bargaining agent of all collectors of the Singer Sewing Machine Company, Baguio City branch (hereinafter referred to as "the
Company").
The Company opposed the petition mainly on the ground that the union members are actually not employees but are independent
contractors as evidenced by the collection agency agreement which they signed. The respondent Med-Arbiter, finding that there exists
an employer-employee relationship between the union members and the Company, granted the petition for certification election. On
appeal, Secretary of Labor Franklin M. Drilon affirmed it.

ISSUE:
Whether or not there exists an employee-employer relationship between the parties.

RULING:
SC ruled in favor of petitioner. Private respondents are independent contractors, not employees. As such, they cannot enter into a
collective bargaining agreement with the petitioner.
The present case mainly calls for the application of the control test, which if not satisfied, would lead us to conclude that no employer-
employee relationship exists. Hence, if the union members are not employees, no right to organize for purposes of bargaining, nor to
be certified as such bargaining agent can ever be recognized. The following elements are generally considered in the determination of
the employer-employee relationship; "(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee's conduct — although the latter is the most important element".
The nature of the relationship between a company and its collecting agents depends on the circumstances of each particular
relationship. Not all collecting agents are employees and neither are all collecting agents independent contractors. The collectors
could fall under either category depending on the facts of each case.
A thorough examination of the facts of the case leads us to the conclusion that the existence of an employer-employee relationship
between the Company and the collection agents cannot be sustained. The plain language of the agreement reveals that the designation
as collection agent does not create an employment relationship and that the applicant is to be considered at all times as an
independent contractor.
The Court finds that since private respondents are not employees of the Company, they are not entitled to the constitutional right to
join or form a labor organization for purposes of collective bargaining. Accordingly, there is no constitutional and legal basis for their
"union" to be granted their petition for direct certification.

Manila Golf Club vs. IAC

G.R. No. 64948 September 27, 1994

FACTS:
This is originally filed with the Social Security Commission (SSC) via petition of 17 persons who styled themselves as “ Caddies of
Manila Golf and Country Club-PTCCEA” for the coverage and availment of benefits of the Social Security Act as amended, PTCCEA
(Philippine Technical, Clerical, Commercial Employees Association) a labor organization where which they claim for membership.
The same time two other proceedings were filed and pending. These are certification election case filed by PTCCEA on behalf of the
same caddies of Manila Golf and Country club which was in favor of the caddies and compulsory arbitration case involving PTCCEA
and Manila Golf and Country Club which was dismissed and ruled that there was no employer-employee relationship between the
caddies and the club.

ISSUE:
Whether or not persons rendering caddying services for members of golf clubs and their guests in said clubs' courses or premises are
the employees of such clubs and therefore within the compulsory coverage of the Social Security System (SSS).

RULING:
SC ruled in favor of the petitioner. Llamar is not an employee of the Manila Golf and Country Club, Inc. The club is under no obligation
to report him for compulsory coverage to the SSS.
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In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their
occupation within the premises and grounds of whatever club they do work in. They work for the club to which they attach
themselves on sufferance but, on the other hand, also without having to observe any working hours, free to leave anytime they please,
to stay away for as long they like.

Encyclopedia Britanica vs. NLRC

G.R. No. 87098 November 4, 1996

FACTS:
Private respondent Benjamin Limjoco was a Sales Division Manager of petitioner Encyclopaedia Britannica and was in charge of
selling petitioner's products through some sales representatives. As compensation, private respondent received commissions from
the products sold by his agents. He was also allowed to use petitioner's name, goodwill and logo. It was, however, agreed upon that
office expenses would be deducted from private respondent's commissions. Petitioner would also be informed about appointments,
promotions, and transfers of employees in private respondent's district. Limjoco resigned from office to pursue his private business.
Then on October 30, 1975, he filed a complaint against petitioner Encyclopaedia Britannica with the Department of Labor and
Employment, claiming for non-payment of separation pay and other benefits, and also illegal deduction from his sales commissions.

ISSUE:
Whether or not there exists an employer-employee relationship between the parties.

RULING:
SC ruled that Limjoco was not an employee of the petitioner company. He was merely an agent or an independent dealer of the
petitioner. The records of the case at bar showed that there was no such relationship. He was free to conduct his work and he was free
to engage in other means of livelihood. At the time he was connected with the petitioner company, private respondent was also a
director and later the president of the Farmers' Rural Bank. Had he been an employee of the company, he could not be employed
elsewhere and he would be required to devote full time for petitioner. If private respondent was indeed an employee, it was rather
unusual for him to wait for more than a year from his separation from work before he decided to file his claims.

Carungcong vs. Sunlife

G.R. No. 118086 December 15, 1997

FACTS:
Susan Carungcong began her career in the insurance industry in 1974 as an agent of Sun Life Assurance Company of Canada. She
signed an Agent Agreement with Sun Life. In virtue of which she was designated the latter’s agent to solicit applications for its
insurance and annuity policies.
This contract was superseded some five years later when she signed two (2) new agreements. The first, denominated Career Agent’s
or Unit Manager’s Agreement, dealt with such matters as the agent’s commissions, his obligations, limitations on his authority, and
termination of the agreement by death, or by written notice with or without cause. The second was titled, Manager’s Supplementary
Agreement. It explicitly described as a “further agreement”. Carungcong and Sun Life executed another Agreement named New
Business Manager with the function generally to manage a New Business Office established. This latest Agreement stressed that the
New Business Manager in performance of his duties defined herein, shall be considered an independent contractor and not an
employee of Sun Life, and that under no circumstance shall the New Business Manager and/or his employees be considered
employees of Sun Life.
Ms. Eleizer Sibayan, Manager of Sun Life’s Internal Audit Department, commenced an inquiry into the special fund availments of
Carungcong and other New Business Managers. Respondent Lance Kemp, had been receiving reports of anomalies in relation thereto
from unit managers and agents. Thereafter, on January 1990, Carungcong was confronted with and asked to explain the discrepancies
set out in Sibayan’s report. She was given a letter signed by Metron V. Deveza, CLU, Director, Marketing, which advised of the
termination of her relationship with Sun Life.
Carungcong promptly instituted proceedings for vindication in the Arbitration Branch of the National Labor Relations Commissions
on January 16, 1990. There she succeeded in obtaining a favorable judgment. Labor Arbiter found that there existed an employer-
employee relationship between her and Sun Life. On appeal, the National Labor Relations Commission reversed the Arbiter’s
judgment. It affirmed that no employment relationship existed between Carungcong and Sun Life.

ISSUE:
Whether or not there exists an employer-employee relationship between the parties.

RULING:
SC held that Carungcong is not an employee of Sun Life Co. She was an independent contractor.
Noteworthy is that this last agreement which emphasized, like the “Career Agent’s or Unit Manager’s Agreement” first signed by her,
that in performance of her duties defined herein. Carungcong would be considered an independent contractor and not an employee
of Sun Life, and that under no circumstance shall the New Business Manager and/or his employees be considered employees of Sun

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Life.
Carungcong is an independent contractor. It was indicated in the very face of the contract. The rules and regulations of the company is
not sufficient to establish an employer-employee relationship. It does not necessarily create any employer-employee relationship
where the employers’ controls have to interfere in the methods and means by which employee would like employ to arrive at the
desired results. Carungcong admitted that she was free to work as she pleases, at the place and time she felt convenient for her to do
so. She was not paid to a fixed salary and was mainly paid by commissions depending on the volume of her performance.
Ramos vs. CA
G.R. No. 124354; April 11, 2002

FACTS:
Petitioner Erlinda Ramos, after seeking professional medical help, was advised to undergo an operation for the removal of a
stone in her gall bladder (cholecystectomy). She was referred to Dr. Hosaka, a surgeon, who agreed to perform the operation on
her. The operation was scheduled for June 17, 1985 at 9:00 in the morning at private respondent De Los Santos Medical Center
(DLSMC). Since neither petitioner Erlinda nor her husband, petitioner Rogelio, knew of any anesthesiologist, Dr. Hosaka
recommended to them the services of Dr. Gutierrez. On the following day, she was ready for operation as early as 7:30 am.
Around 9:30, Dr. Hosaka has not yet arrived. By 10 am, Rogelio wanted to pull out his wife from the operating room. Dr. Hosaka
finally arrived at 12:10 pm more than 3 hours of the scheduled operation.
Dr. Guiterres tried to intubate Erlinda. The nail beds of Erlinda were bluish discoloration in her left hand. At 3 pm, Erlinda was
being wheeled to the Intensive care Unit and stayed there for a month. Since the ill-fated operation, Erlinda remained in
comatose condition until she died.
The family of Ramos sued them for damages.

ISSUE:
Whether or not there exists an employer-employee relationship between the medical center and Drs. Hosaka and Guiterrez.

RULING:
SC ruled that there was no employee-employer relationship between de Los Santos Medical Center and Drs. Hosaka and Gutierrez.
After a careful consideration of the arguments raised by DLSMC, the Court finds that respondent hospital’s position on this issue is
meritorious. There is no employer-employee relationship between DLSMC and Drs. Gutierrez and Hosaka which would hold DLSMC
solidarily liable for the injury suffered by petitioner Erlinda under Article 2180 of the Civil Code.
As explained by respondent hospital, that the admission of a physician to membership in DLSMC’s medical staff as active or visiting
consultant is first decided upon by the Credentials Committee. Neither is there any showing that it is DLSMC which pays any of its
consultants for medical services rendered by the latter to their respective patients. Moreover, the contract between the consultant in
respondent hospital and his patient is separate and distinct from the contract between respondent hospital and said patient. The first
has for its object the rendition of medical services by the consultant to the patient, while the second concerns the provision by the
hospital of facilities and services by its staff such as nurses and laboratory personnel necessary for the proper treatment of the
patient.
The hospital does not hire consultants but it accredits and grants him the privilege of maintaining a clinic and/or admitting patients. It
is the patient who pays the consultants. The hospital cannot dismiss the consultant but he may lose his privileges granted by the
hospital. The hospital’s obligation is limited to providing the patient with the preferred room accommodation and other things that
will ensure that the doctor’s orders are carried out.

Sonza vs. ABS-CBN

G.R. No. 138051; June 10, 2004

FACTS:
Respondent ABS-CBN Broadcasting Corporation ("ABS-CBN") signed an Agreement ("Agreement") with the Mel and Jay Management
and Development Corporation ("MJMDC"). ABS-CBN was represented by its corporate officers while MJMDC was represented by
SONZA, as President and General Manager, and Carmela Tiangco ("TIANGCO"), as EVP and Treasurer. Referred to in the Agreement as
"AGENT," MJMDC agreed to provide SONZA’s services exclusively to ABS-CBN as talent for radio and television.
ABS-CBN agreed to pay for SONZA’s services a monthly talent fee of P310,000 for the first year and P317,000 for the second and third
year of the Agreement. ABS-CBN would pay the talent fees on the 10th and 25th days of the month. SONZA filed a complaint against
ABS-CBN before the Department of Labor and Employment, National Capital Region in Quezon City. SONZA complained that ABS-CBN
did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due
under the Employees Stock Option Plan ("ESOP").

ISSUE:
Whether Jay Sonza is an employee of ABS-CBN or an independent contractor.

RULING:
SC ruled that Sonza is an independent contractor.
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Selection and Engagement of Employees. Independent contractors often present themselves to possess unique skills, expertise or
talent to distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique skills, talent
and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent
contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN would not have entered
into the Agreement with SONZA but would have hired him through its personnel department just like any other employee.
Payment of Wages. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA
were ABS-CBN’s employee, there would be no need for the parties to stipulate on benefits such as "SSS, Medicare, x x x and 13th
month pay"20 which the law automatically incorporates into every employer-employee contract. Whatever benefits SONZA enjoyed
arose from contract and not because of an employer-employee relationship. SONZA’s talent fees, amounting to P317,000 monthly in
the second and third year, are so huge and out of the ordinary that they indicate more an independent contractual relationship rather
than an employer-employee relationship.
Power of Dismissal. During the life of the Agreement, ABS-CBN agreed to pay SONZA’s talent fees as long as "AGENT and Jay Sonza shall
faithfully and completely perform each condition of this Agreement."24 Even if it suffered severe business losses, ABS-CBN could not
retrench SONZA because ABS-CBN remained obligated to pay SONZA’s talent fees during the life of the Agreement. This circumstance
indicates an independent contractual relationship between SONZA and ABS-CBN.
Power of Control. Applying the control test to the present case, we find that SONZA is not an employee but an independent contractor.
The control test is the most important test our courts apply in distinguishing an employee from an independent contractor.29 This
test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the
more likely the worker is deemed an employee. The converse holds true as well – the less control the hirer exercises, the more likely
the worker is considered an independent contractor.30

Lazaro vs. Social Security Commission

G.R. No. 138254; July 30, 2004

FACTS:
Private respondent Rosalina M. Laudato ("Laudato") filed a petition before the SSC for social security coverage and remittance of
unpaid monthly social security contributions against her three (3) employers. Among the respondents was herein petitioner Angelito
L. Lazaro ("Lazaro"), proprietor of Royal Star Marketing ("Royal Star"), which is engaged in the business of selling home appliances.
Laudato alleged that despite her employment as sales supervisor of the sales agents for Royal Star from April of 1979 to March of
1986, Lazaro had failed during the said period, to report her to the SSC for compulsory coverage or remit Laudato's social security
contributions.

ISSUE:
Whether or not there exists an employee-employer relationship between Laudato and Royal Star Marketing.

RULING:
SC ruled that there exists such relationship between the parties.
It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the determination of employer-employee
relationship warrants the application of the "control test," that is, whether the employer controls or has reserved the right to control
the employee, not only as to the result of the work done, but also as to the means and methods by which the same is accomplished.
Suffice it to say, the fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee
relationship. The relevant factor remains, as stated earlier, whether the "employer" controls or has reserved the right to control the
"employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be
accomplished.

Phil. Global Comm. vs. De Vera

G.R. No. 157214; June 7, 2005

FACTS:
Philippine Global Communications inc. is a corporation engaged in the business of communication services and allied activities while
Ricardo de Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. The
controversy rose when petitioner terminated his engagement.
In 1981, Dr. de Vera offered his services to petitioner. The parties agreed and formalized the respondent’s proposal in a document
denominated as retainership contract which will be for a period of one year, subject to renewal and clearly stated that respondent will
cover the retainership the company previously with Dr. Eulau. The agreement went until 1994, in the years 1995-1996, it was
renewed verbally. The turning point of the parties’ relationship was when petitioner, thru a letter bearing the subject TERMINATION
– RETAINERSHIP CONTRACT, informed Dr. de Vera of its decision to discontinue the latter’s retainer contract because the
management has decided that it would be more practical to provide medical services to its employees through accredited hospitals
near the company premises.
On January 1997, de Vera fileda complaint for illegal dismissal before the NLRC, alleging that he had been actually employed by the
company as its company physician since 1991. The commission rendered decision in favor of Philcom and dismissed the complaint
saying that de Vera was an independent contractor. On appeal to NLRC, it reversed the decision of the Labor Arbiter stating that de
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Vera is a regular employee and directed the company to reinstate him. Philcom appealed to the CA where it rendered decision
deleting the award but reinstating de Vera. Philcom filed this petition involving the difference of a job contracting agreements from
employee-employer relationship.

ISSUE:
Whether or not there exists an employee-employer relationship between the parties.

RULING:
SC ruled that there was no such relationship existing between Dr. de Vera and Phil. Com.
The elements of an employer-employee relationship are wanting in this case. The record are replete with evidence showing that
respondent had to bill petitioner for his monthly professional fees. It simply runs against the grain of common experience to imagine
that an ordinary employee has yet to bill his employer to receive his salary.
The power to terminate the parties’ relationship was mutually vested on both. Either may terminate the arrangement at will, with or
without cause.
Remarkably absent is the element of control whereby the employer has reserved the right to control the employee not only as to the
result of the work done but also as to the means and methods by which the same is to be accomplished.
Petitioner had no control over the means and methods by which respondent went about performing his work at the company
premises. In fine, the parties themselves practically agreed on every terms and conditions of the engagement, which thereby negates
the element of control in their relationship.

ABS-CBN vs. Nazareno

G.R. No. 164156; September 26, 2006

FACTS:
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting business and owns a network of television
and radio stations, whose operations revolve around the broadcast, transmission, and relay of telecommunication signals. It sells and
deals in or otherwise utilizes the airtime it generates from its radio and television operations. It has a franchise as a broadcasting
company, and was likewise issued a license and authority to operate by the National Telecommunications Commission.
Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. They
were assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station. On December 19, 1996,
petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the
period from December 11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining
unit, respondents were not included to the CBA.
In October 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay,
Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the
NLRC. The Labor Arbiter rendered judgment in favor of the respondents, and declared that they were regular employees of petitioner
as such, they were awarded monetary benefits. NLRC affirmed the decision of the Labor Arbiter. Petitioner filed a motion for
reconsideration but CA dismissed it.

ISSUE:
Whether or not the respondents were considered regular employees of ABS-CBN.

RULING:
SC ruled that Production Assistants (Pas) are regular workers. Thus, they are entitled to the benefits in the CBA between ABS-CBN and
its rank-and-file employees.
It was held that where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where
the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason being that a
customary appointment is not indispensable before one may be formally declared as having attained regular status.
The Court states that the primary standard, therefore, of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by
considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the
employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law
deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity
to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists.
Additionally, respondents cannot be considered as project or program employees because no evidence was presented to show that
the duration and scope of the project were determined or specified at the time of their engagement. In the case at bar, however, the
employer-employee relationship between petitioner and respondents has been proven. In the selection and engagement of
respondents, no peculiar or unique skill, talent or celebrity status was required from them because they were merely hired through

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petitioner’s personnel department just like any ordinary employee. Respondents did not have the power to bargain for huge talent
fees, a circumstance negating independent contractual relationship. Respondents are highly dependent on the petitioner for
continued work. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the
allegation that respondents are independent contractors.
The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative
to the employer, does not furnish an independent business or professional service, such work is a regular employment of such
employee and not an independent contractor. As regular employees, respondents are entitled to the benefits granted to all other
regular employees of petitioner under the CBA . Besides, only talent-artists were excluded from the CBA and not production assistants
who are regular employees of the respondents. Moreover, under Article 1702 of the New Civil Code: “In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer.”

Francisco vs. NLRC

G.R. No. 170087; August 31, 2006

FACTS:
Angelina Francisco was hired by Kasei Corporation during the incorporation stage. She was designated as accountant and corporate
secretary and was assigned to handle all the accounting needs of the company. She was also designated as Liason Officer to the City of
Manila to secure permits for the operation of the company.
In 1996, Petitioner was designated as Acting Manager. She was assigned to handle recruitment of all employees and perform
management administration functions. In 2001, she was replaced by Liza Fuentes as Manager. Kasei Corporation reduced her salary
to P2,500 per month which was until September. She asked for her salary but was informed that she was no longer connected to the
company. She did not anymore report to work since she was not paid for her salary. She filed an action for constructive dismissal
with the Labor Arbiter.

ISSUE:
Whether or not there was an employer-employee relationship.

RULING:
SC held that there was such relationship. Francisco was constructively dismissed. To ascertain if such relationship exists, the Court
used two-tiered test—control test and economic reality test.
The court held that in this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation.
Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a
right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of
right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls,
can help in determining the existence of an employer-employee relationship.
The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s power to control the
employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities
of the activity or relationship.
The court observed the need to consider the existing economic conditions prevailing between the parties, in addition to the standard
of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining the existence of an
employer-employee relationship based on an analysis of the totality of economic circumstances of the worker.
Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic
activity, such as: (1) the extent to which the services performed are an integral part of the employer’s business; (2) the extent of the
worker’s investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the worker’s
opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the
degree of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of
economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of
business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct
control and supervision of Seiji Kamura, the corporation’s Technical Consultant. It is therefore apparent that petitioner is
economically dependent on respondent corporation for her continued employment in the latter’s line of business.
There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged by
the company for compensation, and is economically dependent upon respondent for her continued employment in that line of
business. Her main job function involved accounting and tax services rendered to Respondent Corporation on a regular basis over an
indefinite period of engagement. Respondent Corporation hired and engaged petitioner for compensation, with the power to dismiss
her for cause. More importantly, Respondent Corporation had the power to control petitioner with the means and methods by which
the work is to be accomplished.

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Nogales et. al. vs. Capitol Medical Center et. al.

G.R. No. 142625; December 19, 2006

FACTS:
Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years old, was under the exclusive prenatal care of Dr.
Oscar Estrada ("Dr. Estrada") beginning on her fourth month of pregnancy or as early as December 1975. Around midnight of 25 May
1976, Corazon started to experience mild labor pains prompting Corazon and Rogelio Nogales ("Spouses Nogales") to see Dr. Estrada
at his home. After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center ("CMC"). t 6:13 a.m.,
Corazon started to experience convulsionsAt 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor, applied low forceps to extract Corazon's
baby. In the process, a 1.0 x 2.5 cm. piece of cervical tissue was allegedly torn.At 6:27 a.m., Corazon began to manifest moderate vaginal
bleeding which rapidly became profuse. Corazon died at 9:15 a.m. The cause of death was "hemorrhage, post partum.

ISSUE:
Whether or not the Capitol Medical Center is solidarily liable.

RULING:
SC held CMC solidarily liable together with Dr. Estrada. The “doctrine of apparent authority” was used to make CMC vicariously liable
even if Dr. Estrada is an independent contractor.
Private hospitals, hire, fire and exercise real control over their attending and visiting "consultant" staff. The basis for holding an
employer solidarily responsible for the negligence of its employee is found in Article 2180 of the Civil Code which considers a person
accountable not only for his own acts but also for those of others based on the former's responsibility under a relationship of patria
potestas.
In general, a hospital is not liable for the negligence of an independent contractor-physician. There is, however, an exception to this
principle. The hospital may be liable if the physician is the "ostensible" agent of the hospital. This exception is also known as the
"doctrine of apparent authority”.
For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent, acted in a
manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or
agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital
had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent,
consistent with ordinary care and prudence. In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff.
Through CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leading the Spouses Nogales to believe that Dr. Estrada
was an employee or agent of CMC.

Coca-Cola Bottlers Phils. vs. Dr. Climaco

G.R. No. 146881; February 5, 2007

FACTS:
Dr. Climaco is a medical doctor who was hired by the petitioner by virtue of retainer agreement. The agreement states that there is no
employer-employee relationship between the parties. The retainer agreement was renewed annually. The last one expired on Dec. 31,
1993. Despite of the non-renewal of the agreement, respondent continued to perform his functions as company doctor until he
received a letter in March 1995 concluding their retainer agreement.
Respondent filed a complaint before the NLRC seeking recognition as a regular employee of the petitioner company and prayed for
the payment of all benefits of a regular employee. In the decision of the Labor Arbiter, the company lacked control over the
respondent’s performance of his duties. Respondent appealed where it rendered that no employer-employee relationship existed
between the parties.
The CA ruled that an employer-employee relationship existed.

ISSUE:
Whether or not there exists an employer-employee relationship between the parties.

RULING:
SC ruled that there is no such relationship between the parties.
The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct, or the so-called “control test,” considered to be the most important element.
The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show that no employer-
employee relationship exists between the parties. The Comprehensive Medical Plan, provided guidelines merely to ensure that the
end result was achieved, but did not control the means and methods by which respondent performed his assigned tasks. In addition,

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the Court finds that the schedule of work and the requirement to be on call for emergency cases do not amount to such control, but
are necessary incidents to the Retainership Agreement.
Considering that there is no employer-employee relationship between the parties, the termination of the Retainership Agreement,
which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of respondent.

Calamba Medical Center vs. NLRC et. al.

G.R. No. 176484; November 25, 2008

FACTS:
The Calamba Medical Center (petitioner), a privately-owned hospital, engaged the services of medical doctors-spouses Ronaldo
Lanzanas (Dr. Lanzanas) and Merceditha Lanzanas (Dr. Merceditha) in March 1992 and August 1995, respectively, as part of its team
of resident physicians. Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents were paid a monthly "retainer"
of P4,800.00 each. It appears that resident physicians were also given a percentage share out of fees charged for out-patient
treatments, operating room assistance and discharge billings, in addition to their fixed monthly retainer.
The work schedules of the members of the team of resident physicians were fixed by petitioner's medical director Dr. Raul Desipeda
(Dr. Desipeda). And they were issued identification cards by petitioner and were enrolled in the Social Security System (SSS). Income
taxes were withheld from them.
Dr. Meluz Trinidad (Dr. Trinidad), also a resident physician at the hospital, inadvertently overheard a telephone conversation of
respondent Dr. Lanzanas with a fellow employee, Diosdado Miscala, through an extension telephone line. Apparently, Dr. Lanzanas
and Miscala were discussing the low "census" or admission of patients to the hospital.
Dr. Trinidad issued to Dr. Lanzanas a memorandum asking her to explain within 24 hours why no disciplinary action should be taken
against him. Pending investigation, he was placed under a 30-day preventive suspension.
Inexplicably, petitioner did not give respondent Dr. Merceditha, who was not involved in the said incident, any work schedule after
sending her husband Dr. Lanzanas the memorandum, nor inform her the reason therefor, albeit she was later informed by the Human
Resource Department (HRD) officer that that was part of petitioner's cost-cutting measures.
Dr. Lanzanas filed a complaint for illegal suspension before the National Labor Relations Commission (NLRC)-Regional Arbitration
Board (RAB) IV. Dr. Merceditha subsequently filed a complaint for illegal dismissal.

ISSUE:
Whether or not there exists an employer-employee relationship between petitioner and the spouses-respondents.
Whether or not the spouses-respondents were legally dismissed.

RULING:
SC held that there exists such relationship. The spouses-respondents were illegally dismissed.
On the first issue
Under the "control test," an employment relationship exists between a physician and a hospital if the hospital controls both the means
and the details of the process by which the physician is to accomplish his task.
As priorly stated, private respondents maintained specific work-schedules, as determined by petitioner through its medical director,
which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed under pain of
administrative sanctions.
That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating
room, or any department or ward for that matter, respondents' work is monitored through its nursing supervisors, charge nurses and
orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. For
control test to apply, it is not essential for the employer to actually supervise the performance of duties of the employee, it being
enough that it has the right to wield the power.
On the second issue
Petitioner thus failed to observe the two requirements,before dismissal can be effected ─ notice and hearing ─ which constitute
essential elements of the statutory process; the first to apprise the employee of the particular acts or omissions for which his
dismissal is sought, and the second to inform the employee of the employer's decision to dismiss him. Non-observance of these
requirements runs afoul of the procedural mandate.
The termination notice sent to and received by Dr. Lanzanas on April 25, 1998 was the first and only time that he was apprised of the
reason for his dismissal. He was not afforded, however, even the slightest opportunity to explain his side. His was a "termination upon
receipt" situation. While he was priorly made to explain on his telephone conversation with Miscala, he was not with respect to his
supposed participation in the strike and failure to heed the return-to-work order.
As for the case of Dr. Merceditha, her dismissal was worse, it having been effected without any just or authorized cause and without
observance of due process. In fact, petitioner never proferred any valid cause for her dismissal except its view that "her marriage to
[Dr. Lanzanas] has given rise to the presumption that her sympath[y] [is] with her husband; [and that when [Dr. Lanzanas] declared
that he was going to boycott the scheduling of their workload by the medical doctor, he was presumed to be speaking for himself
[and] for his wife Merceditha."

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Escasinas et. al. vs. Shangri-la

G.R. No. 178827; March 4, 2009

FACTS:
Registered nurses Jeromie D. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and 1996, respectively, by Dr.
Jessica Joyce R. Pepito (respondent doctor) to work in her clinic at respondent Shangri-la’s Mactan Island Resort (Shangri-la) in Cebu
of which she was a retained physician.
In late 2002, petitioners filed with the NLRC a complaint for regularization, underpayment of wages, non-payment of holiday pay,
night shift differential and 13th month pay differential against respondents, claiming that they are regular employees of Shangri-la.
Shangri-la claimed, however, that petitioners were not its employees but of respondent doctor whom it retained via Memorandum of
Agreement (MOA) pursuant to Article 157 of the Labor Code, as amended. Respondent doctor for her part claimed that petitioners
were already working for the previous retained physicians of Shangri-la before she was retained by Shangri-la; and that she
maintained petitioners’ services upon their request.

ISSUE:
Whether or not there was an employee-employer relationship between Shangri-La and the petitioners.
Whether or not Dr. Pepito is an independent contractor

RULING:
SC ruled that there no such relationship. The petitioners are under the direct supervision of Dr. Pepito, an independent contractor.
On the first issue
The resolution of the case hinges, in the main, on the correct interpretation of Art. 157 vis a vis Art. 280 and the provisions on
permissible job contracting of the Labor Code, as amended. Under the foregoing provision, Shangri-la, which employs more than 200
workers, is mandated to “furnish” its employees with the services of a full-time registered nurse, a part-time physician and dentist,
and an emergency clinic which means that it should provide or make available such medical and allied services to its employees, not
necessarily to hire or employ a service provider. The term “full-time” in Art. 157 cannot be construed as referring to the type of
employment of the person engaged to provide the services, for Article 157 must not be read alongside Art. 280[9] in order to vest
employer-employee relationship on the employer and the person so engaged. The phrase “services of a full-time registered nurse”
should thus be taken to refer to the kind of services that the nurse will render in the company’s premises and to its employees, not the
manner of his engagement.
On the second issue
The existence of an independent and permissible contractor relationship is generally established by considering the following
determinants: whether the contractor is carrying on an independent business; the nature and extent of the work; the skill required;
the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision
of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of
the premises; the duty to supply the premises, tools, appliances, materials and labor; and the mode, manner and terms of payment.
Against the above-listed determinants, the Court holds that respondent doctor is a legitimate independent contractor. That Shangri-
la provides the clinic premises and medical supplies for use of its employees and guests do not necessarily prove that respondent
doctor lacks substantial capital and investment. Besides, the maintenance of a clinic and provision of medical services to its
employees is required under Art. 157, which are not directly related to Shangri-la’s principal business – operation of hotels and
restaurants.

Tongko vs. The Manufacturer’s Life Insurance Co., Inc. November 7, 2008

G.R. No. 167622, November 07, 2008

FACTS:
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life insurance business.Renato A. Vergel
De Dios was, during the period material, its President and Chief Executive Officer. Gregorio V.  Tongko started his professional
relationship with Manulife on July 1, 1977 by virtue of a Career Agent's Agreement (Agreement) he executed with Manulife. In the
Agreement, it is provided that: It is understood and agreed that the Agent is an independent contractor and nothing contained herein
shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. The Company
may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by giving written notice to the
Agent within fifteen (15) days from the time of the discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or
cancellation of the right to terminate this Agreement by the Company shall be construed for any previous failure to exercise its right
under any provision of this Agreement.
Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party fifteen (15)
days notice in writing. In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he became a
Branch Manager. As the CA found, Tongko's gross earnings from his work at Manulife, consisting of commissions, persistency income,
and management overrides. The problem started sometime in 2001, when Manulife instituted manpower development programs in
the regional sales management level. Relative thereto, De Dios addressed a letter dated November 6, 2001 to  Tongko regarding an
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October 18, 2001 Metro North Sales Managers Meeting. Stating that Tongko’s Region was the lowest performer (on a per Manager
basis) in terms of recruiting in 2000 and, as of today, continues to remain one of the laggards in this area.
Other issues were:"Some Managers are unhappy with their earnings and would want to revert to the position of agents." And "Sales
Managers are doing what the company asks them to do but, in the process, they earn less." Tongko  was then terminated.
Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against Manulife for illegal dismissal in the Complaint.
In a Decision dated April 15, 2004, Labor Arbiter dismissed the complaint for lack of an employer-employee relationship. The NLRC's
First Division, while finding an employer-employee relationship between Manulife and Tongko applying the four-fold test, held
Manulife liable for illegal dismissal. Thus, Manulife filed an appeal with the CA. Thereafter, the CA issued the assailed Decision dated
March 29, 2005, finding the absence of an employer-employee relationship between the parties and deeming the NLRC with no
jurisdiction over the case.Hence, Tongko filed this petition.

ISSUES:
1.WON Tongko was an employee of Manulife
2.WON Tongko was illegally dismissed.

RULING:
1. Yes
In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to
this conclusion. In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that: The Agent hereby
agrees to comply with all regulations and requirements of the Company as herein provided as well as maintain a standard of
knowledge and competency in the sale of the Company's products which satisfies those set by the Company and sufficiently meets the
volume of new business required of Production Club membership.Under this provision, an agent of Manulife must comply with three
(3) requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of
the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. Among the company
regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and
Manulife Financial Code of Conduct Agreement, which demonstrate the power of control exercised by the company over Tongko. The
fact that Tongko was obliged to obey and comply with the codes of conduct was not disowned by respondents. Thus, with the
company regulations and requirements alone, the fact that Tongko was an employee of Manulife may already be established.
Certainly, these requirements controlled the means and methods by which Tongko was to achieve the company's goals.
More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes
his employment with Manulife. Additionally, it must be pointed out that the fact that  Tongko was tasked with recruiting a certain
number of agents, in addition to his other administrative functions, leads to no other conclusion that he was an employee of Manulife.
2. Yes
In its Petition for Certiorari dated January 7, 2005[26] filed before the CA, Manulife argued that even if Tongko is considered as its
employee, his employment was validly terminated on the ground of gross and habitual neglect of duties, inefficiency, as well as willful
disobedience of the lawful orders of Manulife. Manulife stated: In the instant case, private respondent, despite the written reminder
from Mr. De Dios refused to shape up and altogether disregarded the latter's advice resulting in his laggard performance clearly
indicative of his willful disobedience of the lawful orders of his superior. As private respondent has patently failed to perform a very
fundamental duty, and that is to yield obedience to all reasonable rules, orders and instructions of the Company, as well as gross
failure to reach at least minimum quota, the termination of his engagement from Manulife is highly warranted and therefore, there is
no illegal dismissal to speak of. It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single
iota of evidence to support its claims. Manulife did not even point out which order or rule that  Tongko disobeyed. More importantly,
Manulife did not point out the specific acts that Tongko was guilty of that would constitute gross and habitual neglect of duty or
disobedience. Manulife merely cited Tongko's alleged "laggard performance," without substantiating such claim, and equated the
same to disobedience and neglect of duty. Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the
burden of proving the validity of the termination of employment rests on the employer. Failure to discharge this evidential burden
would necessarily mean that the dismissal was not justified, and, therefore, illegal. The Labor Code provides that an employer may
terminate the services of an employee for just cause and this must be supported by substantial evidence. The settled rule in
administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an
employer's dismissal of an employee, and not even a preponderance of evidence is necessary as substantial evidence is considered
sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. Here, Manulife failed to
overcome such burden of proof. It must be reiterated that Manulife even failed to identify the specific acts by which  Tongko's
employment was terminated much less support the same with substantial evidence.To repeat, mere conjectures cannot work to
deprive employees of their means of livelihood. Thus, it must be concluded that Tongko was illegally dismissed. Moreover, as to
Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its employee is not entitled to such notices.
Since we have ruled that Tongko is its employee, however, Manulife clearly failed to afford Tongko said notices. Thus, on this ground
too, Manulife is guilty of illegal dismissal.

Atok Big Wedge Company vs. Gison

G.R. No. 169510 August 8, 2011

FACTS:

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Sometime in February 1992, respondent Jesus P. Gison was engaged as part-time consultant on retainer basis by petitioner Atok Big
Wedge Company, Inc. through its then Asst. Vice-President and Acting Resident Manager, Rutillo A. Torres. As a consultant on retainer
basis, respondent assisted petitioner's retained legal counsel with matters pertaining to the prosecution of cases against illegal
surface occupants within the area covered by the company's mineral claims. Respondent was likewise tasked to perform liaison work
with several government agencies, which he said was his expertise.
Sometime thereafter, since respondent was getting old, he requested that petitioner cause his registration with the Social Security
System (SSS), but petitioner did not accede to his request. He later reiterated his request but it was ignored by respondent
considering that he was only a retainer/consultant. On February 4, 2003, respondent filed a Complaint with the SSS against petitioner
for the latter's refusal to cause his registration with the SSS.
On the same date, Mario D. Cera, in his capacity as resident manager of petitioner, issued a Memorandum advising respondent that
within 30 days from receipt thereof, petitioner is terminating his retainer contract with the company since his services are no longer
necessary.
On September 26, 2003, after the parties have submitted their respective pleadings, Labor Arbiter Rolando D. Gambito rendered a
Decision ruling in favor of the petitioner. Finding no employer-employee relationship between petitioner and respondent, the Labor
Arbiter dismissed the complaint for lack of merit.
On July 30, 2004, the NLRC, Second Division, issued a Resolution affirming the decision of the Labor Arbiter. Respondent filed a
Motion for Reconsideration, but it was denied in the Resolution dated September 30, 2004.

ISSUES:
Whether or not there was an employer-employee relationship.

HELD:
To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1)
the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct, or the so-called "control test." Of these four, the last one is the most important. The so-called "control test" is
commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee
relationship. Under the control test, an employer-employee relationship exists where the person for whom the services are performed
reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.
Applying the aforementioned test, an employer-employee relationship is apparently absent in the case at bar. Among other things,
respondent was not required to report everyday during regular office hours of petitioner. Respondent's monthly retainer fees were
paid to him either at his residence or a local restaurant. More importantly, petitioner did not prescribe the manner in which
respondent would accomplish any of the tasks in which his expertise as a liaison officer was needed; respondent was left alone and
given the freedom to accomplish the tasks using his own means and method. Respondent was assigned tasks to perform, but
petitioner did not control the manner and methods by which respondent performed these tasks. Verily, the absence of the element of
control on the part of the petitioner engenders a conclusion that he is not an employee of the petitioner.
Contrary to the conclusion of the CA, respondent is not an employee, much more a regular employee of petitioner. The appellate
court's premise that regular employees are those who perform activities which are desirable and necessary for the business of the
employer is not determinative in this case. In fact, any agreement may provide that one party shall render services for and in behalf of
another, no matter how necessary for the latter's business, even without being hired as an employee. Hence, respondent's length of
service and petitioner's repeated act of assigning respondent some tasks to be performed did not result to respondent's entitlement
to the rights and privileges of a regular employee.
Furthermore, despite the fact that petitioner made use of the services of respondent for eleven years, he still cannot be considered as
a regular employee of petitioner. Article 280 of the Labor Code, in which the lower court used to buttress its findings that respondent
became a regular employee of the petitioner, is not applicable in the case at bar. Indeed, the Court has ruled that said provision is not
the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of
employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to
join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute. It is,
therefore, erroneous on the part of the Court of Appeals to rely on Article 280 in determining whether an employer-employee
relationship exists between respondent and the petitioner.
Considering that there is no employer-employee relationship between the parties, the termination of respondent's services by the
petitioner after due notice did not constitute illegal dismissal warranting his reinstatement and the payment of full backwages,
allowances and other benefits.

Semblante et al., vs. Court of Appeals, et al.

G.R. No. 196426 August 15, 2011

FACTS:
Petitioners Marticio Semblante (Semblante) and Dubrick Pilar (Pilar) assert that they were hired by respondents-spouses Vicente and
Maria Luisa Loot, the owners of Gallera de Mandaue (the cockpit), as the official masiador and sentenciador, respectively, of the
cockpit sometime in 1993.
As the masiador, Semblante calls and takes the bets from the gamecock owners and other bettors and orders the start of the cockfight.
He also distributes the winnings after deducting the arriba, or the commission for the cockpit. Meanwhile, as the sentenciador, Pilar
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oversees the proper gaffing of fighting cocks, determines the fighting cocks' physical condition and capabilities to continue the
cockfight, and eventually declares the result of the cockfight.
They work every Tuesday, Wednesday, Saturday, and Sunday every week, excluding monthly derbies and cockfights held on special
holidays. Their working days start at 1:00 p.m. and last until 12:00 midnight, or until the early hours of the morning depending on the
needs of the cockpit. Petitioners had both been issued employees' identification cards that they wear every time they report for duty.
They alleged never having incurred any infraction and/or violation of the cockpit rules and regulations.
On November 14, 2003, however, petitioners were denied entry into the cockpit upon the instructions of respondents, and were
informed of the termination of their services effective that date. This prompted petitioners to file a complaint for illegal dismissal
against respondents.
Labor Arbiter Julie C. Rendoque found petitioners to be regular employees of respondents as they performed work that was necessary
and indispensable to the usual trade or business of respondents for a number of years. The Labor Arbiter also ruled that petitioners
were illegally dismissed, and so ordered respondents to pay petitioners their backwages and separation pay.
The respondents filed an Appeal during the 10-day appeal period but was unable to post a cash or surety bond. Thus for an
unperfected appeal the NLRC dismissed the same. It was only on October 11, 2006 they were able to post bond dated October 6, 2006.
The NLRC ruled on the Motion for Reconsideration although there was belated filing of the cash or surety bond. The NLRC held in its
Resolution of October 18, 2006 that there was no employer-employee relationship between petitioners and respondents, respondents
having no part in the selection and engagement of petitioners, and that no separate individual contract with respondents was ever
executed by petitioners.

ISSUES:
1. Whether or not the Appeal has been perfected even after a belated filing of the cash or surety bond.
2. Whether or not there was an employer-employee relationship between the petitioner and respondent.

HELD:
Time and again, however, this Court, considering the substantial merits of the case, has relaxed this rule on, and excused the late
posting of, the appeal bond when there are strong and compelling reasons for the liberality, such as the prevention of miscarriage of
justice extant in the case or the special circumstances in the case combined with its legal merits or the amount and the issue involved.
After all, technical rules cannot prevent courts from exercising their duties to determine and settle, equitably and completely, the
rights and obligations of the parties. This is one case where the exception to the general rule lies.
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 employees of respondents, since their relationship fails to pass muster the four-fold test of employment We have
repeatedly mentioned in countless decisions: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the employee's conduct, which is the most important element.
As found by both the NLRC and the CA, respondents had no part in petitioners' selection and management; petitioners' compensation
was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; and petitioners performed their
functions as masiador and sentenciador free from the direction and control of respondents. In the conduct of their work, petitioners
relied mainly on their "expertise that is characteristic of the cockfight gambling," and were never given by respondents any tool
needed for the performance of their work.
Respondents, therefore, could never have been illegally dismissed since they are not employees of the respondents.

Jose Mel Bernarte vs. Philippine Basketball Association (PBA), Jose Emmanuel Eala, and Perry Martinez
G.R. No. 192084. September 14, 2011

FACTS:
Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees. During the term of
Commissioner Eala, however, changes were made on the terms of their employment. Bernarte, for instance, was not made to sign a
contract during the first conference of the All-Filipino Cup which was from February 23, 2003 to June 2003. It was only during the
second conference when he was made to sign a one and a half month contract for the period July 1 to August 5, 2003. On January 15,
2004, Bernarte received a letter from the Office of the Commissioner advising him that his contract would not be renewed citing his
unsatisfactory performance on and off the court. On the other hand, complainant Guevarra alleges that he was invited to join the PBA
pool of referees in February 2001, and signed a contract as a trainee on March 1, 2001. Beginning 2002, he signed a yearly contract as
Regular Class C referee. On May 6, 2003, respondent Martinez issued a memorandum to Guevarra expressing dissatisfaction over his
questioning on the assignment of referees officiating out-of-town games. Beginning February 2004, he was no longer made to sign a
contract.
Respondents aver that complainants were not illegally dismissed because they were not employees of the PBA.
31 March 2005 Decision, the Labor Arbiter declared petitioner an employee whose dismissal by respondents was illegal, ordering
reinstatement of petitioner and the payment of backwages, moral and exemplary damages, and attorney’s fees.
28 January 2008 Decision, the NLRC affirmed the Labor Arbiter's judgment. The Court of Appeals found petitioner an independent
contractor since respondents did not exercise any form of control over the means and methods by which petitioner performed his
work as a basketball referee.

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ISSUES:
Whether petitioner is an employee of respondents, which in turn determines whether petitioner was illegally dismissed;
Whether the Labor Arbiter's decision has become final and executory for failure of respondents to appeal with the NLRC within the
reglementary period

RULING:
SC affirmed CA’s decision.
Petitioner failed to present any concrete proof as to how, when and to whom the delivery and receipt of the three notices issued by
the post office was made. The issuance of the notices by the post office is not equivalent to delivery to and receipt by the addressee of
the registered mail. There is no conclusive evidence showing that the post office notices were actually received by respondents,
negating petitioner's claim of constructive service of the Labor Arbiter's decision on respondents. The Postmaster's Certification does
not sufficiently prove that the three notices were delivered to and received by respondents; it only indicates that the post office issued
the three notices. The ends of justice will be better served if we resolve the instant case on the merits rather than allowing the
substantial issue of whether petitioner is an independent contractor or an employee linger and remain unsettled due to procedural
technicalities.
We agree with respondents that once in the playing court, the referees exercise their own independent judgment, based on the rules
of the game, as to when and how a call or decision is to be made. Respondents or any of the PBA officers cannot and do not determine
which calls to make or not to make and cannot control the referee when he blows the whistle because such authority exclusively
belongs to the referees. Petitioner is required to report for work only when PBA games are scheduled or three times a week at two
hours per game. In addition, there are no deductions for contributions to the Social Security System, Philhealth or Pag-Ibig, which are
the usual deductions from employees' salaries. These undisputed circumstances buttress the fact that petitioner is an independent
contractor, and not an employee of respondents. For a hired party to be considered an employee, the hiring party must have control
over the means and methods by which the hired party is to perform his work, which is absent in this case. The continuous rehiring by
PBA of petitioner simply signifies the renewal of the contract between PBA and petitioner, and highlights the satisfactory services
rendered by petitioner warranting such contract renewal. The non-renewal of the contract between the parties does not constitute
illegal dismissal of petitioner by respondents.

Cesar Lirio vs. Wilmer Genovia

G.R. No. 169757. November 23, 2011

FACTS:
July 9, 2002, respondent Wilmer D. Genovia filed a complaint against petitioner Cesar Lirio and/or Celkor Ad Sonicmix Recording
Studio for illegal dismissal, non-payment of commission and award of moral and exemplary damages. He was employed to manage
and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other prospective clients. He
received a monthly salary of P7,000.00. They also agreed that he was entitled to an additional commission of P100.00 per hour as
recording technician whenever a client uses the studio for recording, editing or any related work. He was made to report for work
from Monday to Friday from 9:00 a.m. to 6 p.m. On Saturdays, he was required to work half-day only, but most of the time, he still
rendered eight hours of work or more.
Respondent stated that a few days after he started working as a studio manager, petitioner approached him and told him about his
project to produce an album for his 15-year-old daughter. Petitioner asked respondent to compose and arrange songs for Celine and
promised that he (Lirio) would draft a contract to assure respondent of his compensation for such services. Petitioner later informed
respondent that he was only entitled to the 20% of the net profit and that the salaries he received would be deducted from the said
20% net profit share. Respondent objected then petitioner verbally terminated the former’s services and instructed the same not to
report for work.
On October 31, 2003, Labor Arbiter Renaldo O. Hernandez rendered a decision, finding that an employer-employee relationship
existed between petitioner and respondent, and that respondent was illegally dismissed.
In a Resolution dated October 14, 2004, the NLRC reversed and set aside the decision of the Labor Arbiter. NLRC held that respondent
failed to proved with substantial evidence that he was selected and engaged by petitioner, that petitioner had the power to dismiss
him, and that they had the power to control him not only as to the result of his work, but also as to the means and methods of
accomplishing his work.
On August 4, 2005, the Court of Appeals rendered a decision reversing and setting aside the resolution of the NLRC, and reinstating
the decision of the Labor Arbiter, with modification in regard to the award of commission and damages. The Court of Appeals deleted
the award of commission and moral and exemplary damages as the same were not substantiated.

ISSUE:
Whether there existed an employer-employee relationship between petitioner and respondent, and whether dismissal of respondent
is illegal.

RULING:
SC affirmed CA’s decision.

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It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be admitted. In this case, the documentary evidence presented by
respondent to prove that he was an employee of petitioner are as follows: (a) a document denominated as "payroll" (dated July 31,
2001 to March 15, 2002) certified correct by petitioner, which showed that respondent received a monthly salary of P7,000.00
(P3,500.00 every 15th of the month and another P3,500.00 every 30th of the month) with the corresponding deductions due to
absences incurred by respondent; and (2) copies of petty cash vouchers, showing the amounts he received and signed for in the
payrolls. Petitioner failed to prove that his relationship with respondent was one of partnership. Such claim was not supported by any
written agreement.
The Court agrees with the Court of Appeals that the evidence presented by the parties showed that an employer-employee
relationship existed between petitioner and respondent.
In termination cases, the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and
validly made. Article 277 (b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or
authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an
employee's dismissal to be valid, (a) the dismissal must be for a valid cause, and (b) the employee must be afforded due process.
Procedural due process requires the employer to furnish an employee with two written notices before the latter is dismissed: (1) the
notice to apprise the employee of the particular acts or omissions for which his dismissal is sought, which is the equivalent of a
charge; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable
opportunity to answer and to be heard on his defense.
Petitioner failed to comply with these legal requirements; hence, the Court of Appeals correctly affirmed the Labor Arbiter's finding
that respondent was illegally dismissed.

Charlie Jao vs BBC Products Sales Inc.

G.R. No. 163700, April 18, 2012

FACTS:
Petitioner offered the following: (a) BCC Identification Card (ID) issued to him stating his name and his position as “comptroller,” and
bearing his picture, his signature, and the signature of Ty; (b) a payroll of BCC for the period of October 1-15, 1996 that petitioner
approved as comptroller; (c) various bills and receipts related to expenditures of BCC bearing the signature of petitioner; (d) various
checks carrying the signatures of petitioner and Ty, and, in some checks, the signature of petitioner alone; (e) a court order showing
that the issuing court considered petitioner’s ID as proof of his employment with BCC; (f) a letter of petitioner dated March 1, 1997 to
the Department of Justice on his filing of a criminal case for estafa against Ty for non-payment of wages; (g) affidavits of some
employees of BCC attesting that petitioner was their co-employee in BCC; and (h) a notice of raffle dated December 5, 1995 showing
that petitioner, being an employee of BCC, received the notice of raffle in behalf of BCC.
But respondent countered the evidences presented by the petitioner by proving that Charlie Jao is not their employee, as SFC had
installed petitioner as its comptroller in BCC to oversee and supervise SFC’s collections and the account of BCC to protect SFC’s
interest; that their issuance of the ID to petitioner was only for the purpose of facilitating his entry into the BCC premises in relation to
his work of overseeing the financial operations of BCC for SFC; that the ID should not be considered as evidence of petitioner’s
employment in BCC; that petitioner executed an affidavit in March 1996, stating, among others, that he is a CPA presently employed
at SFC.

ISSUE:
WON there exist an employee-employer relationship between the petitioner and respondent.

HELD:
The Supreme Court held that there exist no employee-employer relationship between the two based on the affidavits made by the
petitioner that he is an employee of SFC to oversee and supervise SFC's collection.
Moreover, in determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the
following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. The last
element, the so-called control test, is the most important element.
It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to
SFC. Considering that he contested respondents’ challenge by pointing to the existing arrangements between BCC and SFC, it should
be clear that respondents did not exercise the power of control over him, because he thereby acted for the benefit and in the interest
of SFC more than of BCC.
In addition, petitioner presented no document setting forth the terms of his employment by BCC. The failure to present such
agreement on terms of employment may be understandable and expected if he was a common or ordinary laborer who would not
jeopardize his employment by demanding such document from the employer, but may not square well with his actual status as a
highly educated professional.

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Legend Hotel (Manila) vs. Realuyo

GR. No. 153511, July 18, 2012

FACTS:
Respondent was employed in Petitioner’s hotel from September 1992 to August 9, 1999 as a pianist. On July 9, 1999,
Respondent was informed that his services would no longer be needed as a cost cutting measure of the company. Respondent filed a
complaint for alleged unfair labor practice, constructive illegal dismissal, and the underpayment/nonpayment of his premium pay for
holidays, separation pay, service incentive leave pay, and 13 th month pay. He prayed for attorney's fees, moral damages off
P100,000.00 and exemplary damages for P100,000.00. Petitioner contends that there was no employee-employer relationship
therefore it does not fall under the ambit of the Labour Code.
The labour arbiter dismissed Respondent’s complaint agreeing with Petitioner that there was no employee-employer
relationship. Respondent appealed with the NLRC which in turn affirmed the labor arbiter’s decision. Respondent filed a motion for
certiorari in the Court of Appeals which reversed the decision of the NLRC and granted respondent’s petition.

ISSUES:
Whether or not there was employee-employer relationship?
And if there was, was there a valid dismissal?

HELD:
a. Yes there was employee-employer relationship. All four requisites for the existence of employee- employer relationship
exist in this case. The petitioner selects the employee and paid him wages denominated as talent fees and most importantly
exercised control over what he wore and the songs he could play. He also had the power to dismiss as shown in the
memorandum given to the employee.
b. Retrenchment is one of the authorized causes for the dismissal of employees recognized by the Labor Code. It is a
management prerogative resorted to by employers to avoid or to minimize business losses. The Court has laid down the
following standards that an employer should meet to justify retrenchment and to foil abuse, namely:

(a)    The expected losses should be substantial and not merely de minimis in extent;
(b)   The substantial losses apprehended must be reasonably imminent;
(c)    The retrenchment must be reasonably necessary and likely to effectively prevent the expected losses; and
(d)   The alleged losses, if already incurred, and the expected imminent losses sought to be forestalled must be
proved by sufficient and convincing evidence

In termination cases, the burden of proving that the dismissal was for a valid or authorized cause rests upon the
employer. The petitioner did not submit evidence of the losses to its business operations and the economic havoc it would
thereby imminently sustain. It only claimed that respondent’s termination was due to its “present business/financial
condition”. This bare statement fell short of the norm to show a valid retrenchment. Indeed, not every loss incurred or
expected to be incurred by an employer can justify retrenchment. The employer must prove, among others, that the losses
are substantial and that the retrenchment is reasonably necessary to avert such losses. Thus, by its failure to present
sufficient and convincing evidence to prove that retrenchment was necessary, respondent’s termination due to
retrenchment is not allowed.

The New Philippine Skylanders, Inc. vs. Dakila

G.R. No. 199547; September 24, 2012

Facts:
Respondent Dakila was employed by petitioner corporation as early as 1987 and terminated for cause in April 1997 when the
corporation was sold. In May 1997, he was rehired as consultant by the petitioners under a Contract for Consultancy Services  dated
April 30, 1997.

Thereafter, in a letter dated April 19, 2007, respondent Dakila informed petitioners of his compulsory retirement effective May 2,
2007 and sought for the payment of his retirement benefits pursuant to the Collective Bargaining Agreement. His request, however,
was not acted upon. Instead, he was terminated from service effective May 1, 2007.

Consequently, respondent Dakila filed a complaint for constructive illegal dismissal, non-payment of retirement benefits, under/non-
payment of wages and other benefits of a regular employee, and damages against petitioners.

On the other hand, petitioners, in their position paper, asserted that respondent Dakila was a consultant and not their regular
employee. The latter was not included in petitioners' payroll and paid a fixed amount under the consultancy contract. He was not
required to observe regular working hours and was free to adopt means and methods to accomplish his task except as to the results of
the work required of him. Hence, no employer-employee relationship existed between them.

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The Labor Arbiter declared respondent Dakila to be a regular employee on the basis of the unrebutted documentary evidence
showing that he was under the petitioners' direct control and supervision and performed tasks that were either incidental or usually
desirable and necessary in the trade or business of petitioner corporation for a period of ten years.

Issue:
WON there was a valid dismissal.

Held:
The issue of illegal dismissal is premised on the existence of an employer-employee relationship between the parties herein.Records
reveal that both the LA and the NLRC, as affirmed by the CA, have found substantial evidence to show that respondent Dakila was a
regular employee who was dismissed without cause.

Following Article 279 of the Labor Code, an employee who is unjustly dismissed from work is entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages computed from the time he was illegally dismissed. However,
considering that respondent Dakila was terminated on May 1, 2007, or one (1) day prior to his compulsory retirement on May 2,
2007, his reinstatement is no longer feasible. Accordingly, the NLRC correctly held him entitled to the payment of his retirement
benefits pursuant to the CBA. On the other hand, his backwages should be computed only for days prior to his compulsory retirement
which in this case is only a day.

Tesoro et al. vs. Metro Manila Retreaders, Inc. et al.

G.R. No. 171482; March 12, 2014

Facts:
Petitioners used to work as salesmen for respondents Metro Manila Retreaders, Inc., Northern Luzon Retreaders, Inc., or Power Tire
and Rubber Corporation, apparently sister companies, collectively called “Bandag.” Bandag offered repair and retread services for
used tires. Bandag developed a franchising scheme that would enable others to operate tire and retreading businesses using its trade
name and service system.

Petitioners quit their jobs as salesmen and entered into separate Service Franchise Agreements (SFAs) with Bandag for the operation
of their respective franchises. Under the SFAs, Bandag would provide funding support to the petitioners subject to a regular or
periodic liquidation of their revolving funds. The expenses out of these funds would be deducted from petitioners’ sales to determine
their incomes.

At first, petitioners managed and operated their respective franchises without any problem. However, they began to default on their
obligations to submit periodic liquidations of their operational expenses in relation to the revolving funds Bandag provided them.
Consequently, Bandag terminated their respective SFA.

Aggrieved, petitioners filed a complaint for constructive dismissal, non–payment of wages, incentive pay, 13th month pay and
damages against Bandag with the National Labor Relations Commission (NLRC). Petitioners contend that, notwithstanding the
execution of the SFAs, they remained to be Bandag’s employees, the SFAs being but a circumvention of their status as regular
employees.

For its part, Bandag pointed out that petitioners freely resigned from their employment and decided to avail themselves of the
opportunity to be independent entrepreneurs under the franchise scheme that Bandag had. Thus, no employer–employee relationship
existed between petitioners and Bandag.

Issue: WON petitioners remained to be Bandag’s salesmen under the franchise scheme it entered into with them.

Held:
No.
When petitioners agreed to operate Bandag’s franchise branches in different parts of the country, they knew that this substantially
changed their former relationships. They were to cease working as Bandag’s salesmen, the positions they occupied before they
ventured into running separate Bandag branches.

The tests for determining employer–employee relationship are: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect to the means and methods by
which the work is to be accomplished. The last is called the “control test,” the most important element.

It is pointed out that Bandag continued, like an employer, to exercise control over petitioners’ work. It points out that Bandag: (a)
retained the right to adjust the price rates of products and services; (b) imposed minimum processed tire requirement (MPR); (c)
reviewed and regulated credit applications; and (d) retained the power to suspend petitioners’ services for failure to meet service
standards.

But uniformity in prices, quality of services, and good business practices are the essence of all franchises. These business constraints
are needed to maintain collective responsibility for faultless and reliable service to the same class of customers for the same prices.

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This is not the “control” contemplated in employer–employee relationships. Control in such relationships addresses the details of day
to day work like assigning the particular task that has to be done, monitoring the way tasks are done and their results, and
determining the time during which the employee must report for work or accomplish his assigned task.

Franchising involves the use of an established business expertise, trademark, knowledge, and training. As such, the franchisee is
required to follow a certain established system. Accordingly, the franchisors may impose guidelines that somehow restrict the
petitioners’ conduct which do not necessarily indicate “control.” The important factor to consider is still the element of control over
how the work itself is done, not just its end result.

III. RIGHT TO SECURITY OF TENURE

ALU-TUCP vs. NLRC

234 SCRA 678 [1994]

Facts:
National Steel Corporation (NSC) employed petitioners in connection with its Five Year Expansion Program. It undertook this
program with the end in view of expanding the volume and increasing the kinds of products that it may offer for sale to the public.
Petitioners were then terminated. They filed a complaint for unfair labor practice, regularization and monetary benefits. Their
contention was that they should be considered regular employees because their jobs are necessary, desirable and work related to
NSC’s main business which is steel making and that they have rendered service for more than six years.

Issue: Whether or not petitioners were properly characterized as regular employees rather than project employees.

Held:
Petitioners are project employees.
Project employees are those employed for a fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee. On the other hand, regular employees are legally entitled to remain
in the service of their employer until that service is terminated by one or another of the recognized modes or termination of service
under the Labor Code. The principal test for determining whether an employee is properly characterized as project employees is
whether or not the project employees were carrying out a specific project or undertaking, the duration and the scope of which were
specified at the time the employees were engaged for that project.

There are two types of project activities. First is that a project could refer to a particular job or undertaking that is within the regular
or usual business of the employer company, but which is distinct and separate and identifiable as such, from the other undertakings of
the company. Such job or undertaking begins and ends at determined or determinable times. Second is a particular job or undertaking
that is not within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and distinct
from the ordinary or regular business operations of the employer. It must also begin and end at determined or determinable times.

The case at bar falls on the second type of project activity. The carrying out of the Five Year Expansion Program constitutes a distinct
undertaking identifiable from the ordinary business and activity of NSC. Each component project, of course, begins and ends at
specified times which had already been determined by the time petitioners were engaged. During the time petitioners rendered
services to NSC, their work was limited to one or another of the specific component projects which made up the Five Year Expansion
Program. They were not hired or assigned to any other purpose.

The services of these project employees may be lawfully terminated at the completion of the project. It is dependent and coterminous
with the completion or termination of the specific undertaking or activity for which the employee was hired which has been pre-
determined at the time of the engagement. Furthermore, the length of service of a project employee is not the controlling test of
employment of tenure. The simple fact that the employment of petitioners as project employees had gone beyond one year does not
detract from or legally dissolve their status as project employees. Whichever type of project employment is found in a particular case,
a common basic requisite is that the designation of named employees as "project employees" and their assignment to a specific
project, are effected and implemented in good faith, and not merely as a means of evading otherwise applicable requirements of labor
laws.

Private respondent NSC was not in the business of constructing buildings and installing plant machinery for the general business
community, i.e., for unrelated, third party, corporations. NSC did not hold itself out to the public as a construction company or as an
engineering corporation.
The present case therefore strictly falls under definition of 'project employees' on paragraph one of Article 280 of the Labor Code, as
amended. Moreover, it has been held that the length of service of a project employee is not the controlling test of employment tenure
but whether or not 'the employment has been fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee'.

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Cosmos Bottling Corp., vs NLRC

255 SCRA 358 [1996]

Facts:
Gil C. Castro was employed by Cosmos Bottling Corporation for a specific period. Having satisfactorily served the company for two (2)
terms, Castro was recommended for reemployment with the company’s Maintenance Team for the Davao Project, he was re-hired and
assigned to the Maintenance Division of the Davao Project tasked to install the private respondent’s annex plant machines in its Davao
plant. Castro’s employment was terminated due to the completion of the special project. Cosmos Bottling Corporation in valid exercise
of its management prerogative terminated the services of some 228 regular employees by reason of retrenchment. For obvious
reasons, Castro was not among the list of those regular employees whose services were terminated by reason of retrenchment or
those who voluntarily resigned. Castro filed a complaint for illegal dismissal against Cosmos Bottling Corporation with the Labor
Arbiter contending that being a regular employee, he could not be dismissed without a just and valid cause. The company alleged that
Castro was a mere project employee whose employment was co-terminous with the project for which he was hired.

Issue: WON Castro is a regular employee or was a mere project employee of petitioner Cosmos Bottling Corporation.

Held:
After a careful examination of the records of the case, we find merit in the petition and hold that respondent NLRC gravely abused its
discretion when it rendered the challenged decision finding private respondent a regular employee. Article 280 of the Labor Code
which defines regular, project and casual employment is applicable here. The same reads in full:

Article 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless
of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such actually exists.

The case at bar presents what appears, to our mind, as a typical example of the first type. Petitioner Cosmos Bottling Corporation is a
duly organized corporation engaged in the manufacture, production, bottling, sale and distribution of beverage. In the course of its
business, it undertakes distinct identifiable projects as it did in the instant case when it formed special teams assigned to install and
dismantle its annex plant machines in various plants all over the country. These projects are distinct and separate, and are identifiable
as such, from its usual business of bottling beverage.

Their duration and scope are made known prior to their undertaking and their specified goal and purpose are fulfilled once the
projects are completed. When private respondent was initially hired for a period of one month and re-hired for another five months,
and then subsequently re-hired for another five months, he was assigned to the petitioner's Maintenance Division tasked with the-
installation and dismantling of its annex plant machines. Evidently, these projects or undertakings, the duration and scope of which
had been determined and made known to private respondent at the time of his employment, can properly be treated as "projects"
within the meaning of the "first" kind. Considered as such, the services rendered by private respondent hired therein for the duration
of the projects may lawfully be terminated at the end or completion of the same.

Clearly, therefore, private respondent being a project employee, or to use the correct term, seasonal employee, considering that his
employment was limited to the installation and dismantling of petitioners annex plant machines after which there was no more work
to do, his employment legally ended upon completion of the project.

Pure Foods Corporation vs. NLRC

G.R. No. 122653. December 12, 1997

Facts:
Pure Foods Corporation hired workers numbering 906 (private respondents) to work for a fixed period of five months at its tuna
cannery plant. Their work consisted in the receiving, skinning, loining, packing, and casing-up of tuna fish which were then exported
by Pure Foods. Their services were terminated after the expiration of their respective contracts of employment. They filed before the
NLRC a complaint for illegal dismissal against the petitioner.

Labor Arbiter dismissed the complaint on the ground that the private respondents were mere contractual workers, and not regular
employees; hence, they could not avail of the law on security of tenure. The termination of their services by reason of the expiration of
their contracts of employment was, therefore, justified. The private respondents appealed from the decision to the NLRC. The NLRC
rendered a decision holding that the private respondents and their co-complainants were regular employees.

Issue: WON the employees hired for a definite period (five-month basis) and whose services are necessary and desirable in the usual
business or trade of the employer considered regular employees

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Held:
YES.
They are regular employees because they performed work usually necessary or desirable in petitioner's business or trade.

The private respondents could not be regarded as having been hired for a specific project or undertaking. The term "specific project
or undertaking" under Article 280 of the Labor Code contemplates an activity which is not commonly or habitually performed or such
type of work which is not done on a daily basis but only for a specific duration of time or until completion; the services employed are then
necessary and desirable in the employer's usual business only for the period of time it takes to complete the project.

The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that performed by
those whose contracts had expired negates petitioner's contention that those workers were hired for a specific project or
undertaking only.

On the validity of private respondents' five-month contracts of employment. In the leading case of Brent School, Inc. v. Zamora, which
was reaffirmed in numerous subsequent cases, this Court has upheld the legality of fixed-term employment. It ruled that the decisive
determinant in term employment should not be the activities that the employee is called upon to perform but the day certain agreed
upon by the parties for the commencement and termination of their employment relationship. But, this Court went on to say that
where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as contrary to public policy and morals.

Brent also laid down the criteria under which term employment cannot be said to be in circumvention of the law on security of
tenure:

1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or
improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less equal terms with no moral
dominance exercised by the former or the latter.

None of these criteria had been met in the present case. It was really the practice of the company to hire workers on a uniformly fixed
contract basis and replace them upon the expiration of their contracts with other workers on the same employment duration.

This scheme of the petitioner was apparently designed to prevent the private respondents and the other "casual" employees from
attaining the status of a regular employee. It was a clear circumvention of the employees' right to security of tenure and to other
benefits like minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay. Indeed, the petitioner succeeded in
evading the application of labor laws. Also, it saved itself from the trouble or burden of establishing a just cause for terminating
employees by the simple expedient of refusing to renew the employment contracts.

The five-month period specified in private respondents' employment contracts having been imposed precisely to circumvent the
constitutional guarantee on security of tenure should, therefore, be struck down or disregarded as contrary to public policy or
morals . To uphold the contractual arrangement between the petitioner and the private respondents would, in effect, permit the
former to avoid hiring permanent or regular employees by simply hiring them on a temporary or casual basis, thereby violating the
employees' security of tenure in their jobs.

Phil. Fruit & Vegetable Industries vs. NLRC

310 SCRA 680

Facts:
Private respondent Philippine Fruit and Vegetable Workers Union-Tupas Local Chapter, for and in behalf of 127 of its members, filed a
complaint for unfair labor practice and/or illegal dismissal with damages against petitioner corporation.   Private respondent alleged
that many of its complaining members started working for San Carlos Fruits Corporation which later incorporated into PFVII in
January or February 1983 until their dismissal on different dates in 1985, 1986, 1987 and 1988.  They further alleged that the
dismissals were due to complainants' involvement in union activities and were without just cause.

Petitioners argue that PFVII operates on a seasonal basis and the complainants who are members of respondent union are seasonal
workers because they work only during the period that the company is in operation.  According to petitioners, its operation starts
only in February with the processing of tomatoes into tomato paste and ceases by the end of the same month when the supply is
consumed.  It then resumes operations at the end of April or early May, depending on the availability of supply with the processing of
mangoes into purees and ceases operation in June. The severance of complainants' employment from petitioner corporation was a
necessary consequence of the nature of seasonal employment; and since complainants are seasonal workers as defined by the Labor
Code, they cannot invoke any tenurial benefit.

Issue: Whether or not complaining members of the union are regular employees or are seasonal workers whose employment ceased
during the off-season due to the non-availability of work.

Held:
Yes.
The complaining members of respondent union are regular employees of PFVII having performed functions which are necessary and
desirable in the usual business of PFVII as provided under the first paragraph of Art. 280 of the Labor Code.

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Article 280 of the Labor Code provides:

Regular and Casual Employment.- The provisions of written agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employers, except where the employment has been fixed
for a specific project. 

An employment shall be deemed to be casual if it is not covered by the preceeding paragraph; provided, that, any employee who has
rendered at least one year of service whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such actually exists.

Under above provision, an employment shall be deemed regular where the employee:  a) has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer; or b) has rendered at least one year of
service, whether such service is continuous or broken, with respect to the activity in which he is employed.

In the case at bar, the work of complainants as seeders, operators, sorters, slicers, janitors, drivers, truck helpers, mechanics and office
personnel is without doubt necessary in the usual business of a food processing company like petitioner PFVII. Complainants'
employment has not been fixed for a specific project or undertaking the completion or termination of which has been determined at
the time of their appointment or hiring. Neither is their employment seasonal in nature.  While it may be true that some phases of
petitioner company's processing operations is dependent on the supply of fruits for a particular season, the other equally important
aspects of its business, such as manufacturing and marketing are not seasonal.  The fact is that large-scale food processing companies
such as petitioner company continue to operate and do business throughout the year even if the availability of fruits and vegetables is
seasonal.

Having determined that private respondents are regular employees under the first paragraph, we need not dwell on the question of
whether or not they had rendered one year of service.   This Court has clearly stated in Mercado, Sr. vs. NLRC, that:
The second paragraph of Article 280 demarcates as “casual” employees, all other employees who do not fall under the definition of the
preceding paragraph.  The proviso, in said second paragraph, deems as regular employees those “casual” employees who have
rendered at least one year of service regardless of the fact that such service may be continuous or broken. Hence, the proviso is
applicable only to the employees who are deemed “casuals” but not to the “project” employees nor the regular employees treated in
paragraph one of Art. 280.

Philips Semiconductor vs. Fardiquela

G.R. No. 141717, April 14, 2004

Facts:
Aside from contractual employees, the petitioner employs 1,029 regular workers. The employees were subjected to periodic
performance appraisal based on output, quality, attendance and work attitude.  One was required to obtain a performance rating of at
least 3.0 for the period covered by the performance appraisal to maintain good standing as an employee.

On May 8, 1992, respondent Eloisa Fadriquela executed a Contract of Employment with the petitioner in which she was hired as a
production operator with a daily salary of P118. Her initial contract was for a period of three months up to August 8, 1992, but was
extended for two months when she garnered a performance rating of 3.15. Her contract was again renewed for two months or up to
December 16, 1992, when she received a performance rating of 3.8.After the expiration of her third contract, it was extended anew,
for three months, that is, from January 4, 1993 to April 4, 1993. After garnering a performance rating of 3.4, the respondent’s contract
was extended for another three months, that is, from April 5, 1993 to June 4, 1993. She, however, incurred five absences in the month
of April, three absences in the month of May and four absences in the month of June. Line supervisor Shirley F. Velayo asked the
respondent why she incurred the said absences, but the latter failed to explain her side.

The respondent was warned that if she offered no valid justification for her absences, Velayo would have no other recourse but to
recommend the non-renewal of her contract. The respondent still failed to respond, as a consequence of which her performance
rating declined to 2.8. Velayo recommended to the petitioner that the respondent’s employment be terminated due to habitual
absenteeism, in accordance with the Company Rules and Regulations. Thus, the respondent’s contract of employment was no longer
renewed.

Issue: Whether or not the respondent was still a contractual employee of the petitioner as of June 4, 1993.

Held:
The two kinds of regular employees under the law are (1) those engaged to perform activities which are necessary or desirable in the
usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activities in which they are employed. 

The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by
the employee in relation to the business or trade of the employer.   The test is whether the former is usually necessary or desirable in
the usual business or trade of the employer. If the employee has been performing the job for at least one year, even if the performance
is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence

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of the necessity, if not indispensability of that activity to the business of the employer.  Hence, the employment is also considered
regular, but only with respect to such activity and while such activity exists.

The law does not provide the qualification that the employee must first be issued a regular appointment or must be declared as such
before he can acquire a regular employee status.In this case, the respondent was employed by the petitioner on May 8, 1992 as
production operator. She was assigned to wirebuilding at the transistor division. There is no dispute that the work of the respondent
was necessary or desirable in the business or trade of the petitioner. She remained under the employ of the petitioner without any
interruption since May 8, 1992 to June 4, 1993 or for one (1) year and twenty-eight (28) days. The original contract of employment
had been extended or renewed for four times, to the same position, with the same chores.

Such a continuing need for the services of the respondent is sufficient evidence of the necessity and indispensability of her services to
the petitioner’s business. By operation of law, then, the respondent had attained the regular status of her employment with the
petitioner, and is thus entitled to security of tenure as provided for in Article 279 of the Labor Code which reads:

Alcira vs. NLRC

G.R. No. 149859, June 9, 2004

Facts:
Middleby Philippines Corp. hired petitioner as engineering support services supervisor on a probationary basis for six months. On 20
November 1996, a senior officer of Middleby withheld his time card and did not allow him to work. Alcira filed with the NLRC a
complaint for illegal dismissal on the contention that he had become a regular employee when he was illegally dismissed. In their
defense, respondents claim that, during petitioner’s probationary employment, he showed poor performance in his assigned tasks,
incurred ten absences, was late several times and violated company rules on the wearing of uniform. Since he failed to meet company
standards, petitioner’s application to become a regular employee was disapproved and his employment was terminated.

Issue: Whether petitioner was allowed to work beyond his probationary period and was therefore already a regular employee at the
time of his alleged dismissal.

Held:
Petitioner insists that he already attained the status of a regular employee when he was dismissed on November 20, 1996 because,
having started work on May 20, 1996, the six-month probationary period ended on November 16, 1996. According to petitioner’s
computation, since Article 13 of the Civil Code provides that one month is composed of thirty days, six months total one hundred
eighty days. As the appointment provided that petitioner’s status was “probationary (6 mos.)” without any specific date of
termination, the 180th day fell on November 16, 1996. Thus, when he was dismissed on November 20, 1996, he was already a regular
employee. Petitioner’s contention is incorrect. Our computation of the 6-month probationary period is reckoned from the date of
appointment up to the same calendar date of the 6th month following. In short, since the number of days in each particular month was
irrelevant, petitioner was still a probationary employee when respondent Middleby opted not to “regularize” him on November 20,
1996.

In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the standards that he must
satisfy in order to be converted into regular status. This runs counter to the agreement between the parties that after five months of
service the petitioner’s performance would be evaluated. It is only but natural that the evaluation should be made vis-à-vis the
performance standards for the job. Private respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the
fact that petitioner did not perform well in his assigned work and his attitude was below par compared to the company’s standard
required of him.

However, even if probationary employees do not enjoy permanent status, they are accorded the constitutional protection of security
of tenure.  This means they may only be terminated for just cause or when they otherwise fail to qualify as regular employees in
accordance with reasonable standards made known to them by the employer at the time of their engagement. But this constitutional
protection ends on the expiration of the probationary period. On that date, the parties are free to either renew or terminate their
contract of employment. This development has rendered moot the question of whether there was a just cause for the dismissal of the
petitioners. Middleby exercised its option not to renew the contract when it informed petitioner on the last day of his probationary
employment that it did not intend to grant him a regular status.

Although we can regard petitioner’s severance from work as dismissal, the same cannot be deemed illegal. As found by the labor
arbiter, the NLRC and the Court of Appeals, petitioner (1) incurred ten absences (2) was tardy several times (3) failed to wear the
proper uniform many times and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily refute these substantiated
allegations. Taking all this in its entirety, respondent Middleby was clearly justified to end its employment relationship with
petitioner.

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Mitsubishi Motors Phils. vs. Chrysler Phil Labor Union

G.R. No. 148738, June 29, 2004

Facts:
Nelson Paras first worked for Mitsubishi Motors Philippines Corporation (MMPC) as a shuttle bus driver from March 19, 1976 to June
16, 1982, when he resigned to work abroad. After working in Saudi Arabia, he was re-hired as a welder-fabricator at the MMPC
tooling shop from October 3, 1994 to October 31, 1994. On October 29, 1994, his contract was renewed from November 1, 1994 up to
March 3, 1995.

Sometime in May of 1996, Paras was re-hired on a probationary basis as a manufacturing trainee at the Plant Engineering
Maintenance Department. He and the new and re-hired employees were given an orientation on May 15, 1996 by Emma P. Aninipot,
respecting the company's history, corporate philosophy, organizational structure, and company rules and regulations, including the
company standards for regularization, code of conduct and company-provided benefits.

Paras started reporting for work on May 27, 1996. He was assigned at the paint ovens, air make-up and conveyors. As part of the
MMPC's policy, Paras was evaluated by his immediate supervisors Lito R. Lacambacal and Wilfredo J. Lopez after six (6) months, and
received an average rating. Later, Lacambacal informed Paras that based on his performance rating, he would be regularized.

However, the Department and Division Managers reviewed the performance evaluation made on Paras. They unanimously agreed,
along with Paras' immediate supervisors, that the performance of Paras was unsatisfactory. As a consequence, Paras was not
considered for regularization. On November 26, 1996, he received a Notice of Termination dated November 25, 1996, informing him
that his services were terminated effective the said date since he failed to meet the required company standards for regularization.

Issue: Whether or not Paras was already a regular employee when he was terminated.

Held:
Yes.
Indeed, an employer, in the exercise of its management prerogative, may hire an employee on a probationary basis in order to
determine his fitness to perform work. Under Article 281 of the Labor Code, the employer must inform the employee of the standards
for which his employment may be considered for regularization. Such probationary period, unless covered by an apprenticeship
agreement, shall not exceed six (6) months from the date the employee started working. The employee’s services may be terminated
for just cause or for his failure to qualify as a regular employee based on reasonable standards made known to him. Respondent Paras
was employed as a management trainee on a probationary basis. During the orientation conducted on May 15, 1996, he was apprised
of the standards upon which his regularization would be based. He reported for work on May 27, 1996. As per the company’s policy,
the probationary period was from three (3) months to a maximum of six (6) months.

Applying Article 13 of the Civil Code, the probationary period of six (6) months consists of one hundred eighty (180) days.This is in
conformity with paragraph one, Article 13 of the Civil Code, which provides that the months which are not designated by their names
shall be understood as consisting of thirty (30) days each. The number of months in the probationary period, six (6), should then be
multiplied by the number of days within a month, thirty (30); hence, the period of one hundred eighty (180) days.

As clearly provided for in the last paragraph of Article 13, in computing a period, the first day shall be excluded and the last day
included. Thus, the one hundred eighty (180) days commenced on May 27, 1996, and ended on November 23, 1996. The termination
letter dated November 25, 1996 was served on respondent Paras only at 3:00 a.m. of November 26, 1996. He was, by then, already a
regular employee of the petitioner under Article 281 of the Labor Code.

The basis for which respondent Paras' services were terminated was his alleged unsatisfactory rating arising from poor performance.
It is a settled doctrine that the employer has the burden of proving the lawfulness of his employee's dismissal. The validity of the
charge must be clearly established in a manner consistent with due process.

Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual
neglect of duties. Gross negligence has been defined to be the want or absence of even slight care or diligence as to amount to a
reckless disregard of the safety of person or property. It evinces a thoughtless disregard of consequences without exerting any effort
to avoid them. A careful perusal of the records of this case does not show that respondent Paras was grossly negligent in the
performance of his duties.

In the present case, the immediate supervisor of respondent Paras gave him an average performance rating and found him fit for
regularization. Thereafter, his immediate supervisor and the department head reviewed the said rating, which was duly noted by the
personnel manager. However, in a complete turn around, the petitioner made it appear that after the performance evaluation of
respondent Paras was reviewed by the department and division heads, it was unanimously agreed that the respondent's performance
rating was unsatisfactory, making him unfit for regularization.

There is no showing that respondent Paras was informed of the basis for the volte face of the management group tasked to review his
performance rating. His immediate supervisor even told him that he had garnered a satisfactory rating and was qualified for
regularization, only to later receive a letter notifying him that his employment was being terminated.

Considering that respondent Paras was not dismissed for a just or authorized cause, his dismissal from employment was illegal.
Furthermore, the petitioner's failure to inform him of any charges against him deprived him of due process. Clearly, the termination of

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his employment based on his alleged unsatisfactory performance rating was effected merely to cover up and "deodorize" the illegality
of his dismissal.

Pangilinan vs. General Milling Co.

G.R. No. 149329, July 2, 2004

Facts:
General Milling Corporation is a domestic corporation engaged in the production and sale of livestock and poultry. It is, likewise, the
distributor of dressed chicken to various restaurants and establishments nationwide. As such, it employs hundreds of employees,
some on a regular basis and others on a casual basis, as "emergency workers."

The petitioners were employed by the respondent on different dates as emergency workers at its poultry plant under separate
"temporary/casual contracts of employment" for a period of five months. Most of them worked as chicken dressers, while the others
served as packers or helpers. Upon the expiration of their respective contracts, their services were terminated. They later filed
separate complaints for illegal dismissal and non-payment of holiday pay, 13 th month pay, night-shift differential and service incentive
leave pay against the respondent.

The petitioners alleged that their work as chicken dressers was necessary and desirable in the usual business of the respondent. They
stressed that based on the nature of their work, they were regular employees of the respondent; hence, could not be dismissed from
their employment unless for just cause and after due notice.

Issue: Whether or not petitioners are regular employees and, thus, cannot be dismissed without just cause and the required due
process.

Held:
Article 280 of the Labor Code comprehends three kinds of employees: (a) regular employees or those whose work is necessary or
desirable to the usual business of the employer; (b) project employees or those whose employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and the employment is for the duration of the season; and, (c) casual
employees or those who are neither regular nor project employees. A regular employee is one who is engaged to perform activities
which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific
project or are seasonal. There are two separate instances whereby it can be determined that an employment is regular: (1) if the
particular activity performed by the employee is necessary or desirable in the usual business or trade of the employer; and, (2) if the
employee has been performing the job for at least a year.

In the case of St. Theresa’s School of Novaliches Foundation vs. NLRC, 43 we held that Article 280 of the Labor Code does not
proscribe or prohibit an employment contract with a fixed period. We furthered that it does not necessarily follow that where the
duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are
forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory
between a definite period of employment and the nature of the employee’s duties.

Indeed, in the leading case of Brent School Inc. v. Zamora, 44 we laid down the guideline before a contract of employment may be held
as valid, to wit:

. . . [S]tipulations in employment contracts providing for term employment or fixed period employment are valid when the period
were agreed upon knowingly and voluntarily by the parties without force, duress or improper pressure, being brought to bear upon
the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over
the latter.

The records reveal that the stipulations in the employment contracts were knowingly and voluntarily agreed to by the petitioners
without force, duress or improper pressure, or any circumstances that vitiated their consent. Similarly, nothing therein shows that
these contracts were used as a subterfuge by the respondent GMC to evade the provisions of Articles 279 and 280 of the Labor Code.
The petitioners were hired as "emergency workers" and assigned as chicken dressers, packers and helpers at the Cainta Processing
Plant. The respondent GMC is a domestic corporation engaged in the production and sale of livestock and poultry, and is a distributor
of dressed chicken. While the petitioners' employment as chicken dressers is necessary and desirable in the usual business of the
respondent, they were employed on a mere temporary basis, since their employment was limited to a fixed period. As such, they
cannot be said to be regular employees, but are merely "contractual employees." Consequently, there was no illegal dismissal when
the petitioners' services were terminated by reason of the expiration of their contracts. Lack of notice of termination is of no
consequence, because when the contract specifies the period of its duration, it terminates on the expiration of such period. A contract
for employment for a definite period terminates by its own term at the end of such period.

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Hacienda Bino/Hortencia Stark vs. Cuenca

G.R. No. 150478, April 15, 2005, citing 2003 Hacienda Fatima

Facts:
Hortencia L. Starke, herein petitioner, is the owner and operator of the Hacienda Bino. During the off milling season of 1996 he issued
an Order or Notice which stated, that all Hacienda Employees who signed in favor of CARP are expressing their desire to get out of
employment on their own volition and wherefore, only those who did not sign for CARP will be given employment by the hacienda.

Herein respondents are employees of the hacienda performing various works, such as cultivation, planting of cane points, fertilization,
watering, weeding, harvesting and loading of harvested sugarcanes to cargo trucks are those who signed in favor of CARP. They allege
that they are regular and permanent workers of the hacienda and that they were dismissed without just and lawful cause. They
further alleged that they were dismissed because they applied as beneficiaries under the Comprehensive Agrarian Reform Program
(CARP) over the land owned by petitioner Starke. Petitioner Starke alleged that in there was little work in the plantation as it was off-
season; and so, on account of the seasonal nature of the work, she issued the order giving preference to those who supported the re-
classification. She pointed out that when the milling season began, the work was plentiful again and she issued notices to all workers,
including the respondents, informing them of the availability of work. However, the respondents refused to report back to work.

Issue: Whether or not the respondents are regular employee

Held:
Petitioner Starke contends that the established doctrine that seasonal employees are regular employees had been overturned and
abandoned by Mercado, Sr. v. NLRC. 18 She stresses that in that case, the Court held that petitioners therein who were sugar workers,
are seasonal employees and their employment legally ends upon completion of the project or the season.

On the substantial issue of whether the respondents are regular or seasonal employees, the petitioners contend that the CA violated
the doctrine of stare decisis by not applying the ruling in the Mercado case that sugar workers are seasonal employees. We hold
otherwise. Under the doctrine of stare decisis, when a court has laid down a principle of law as applicable to a certain state of facts, it
will adhere to that principle and apply it to all future cases in which the facts are substantially the same. 22 Where the facts are
essentially different, however, stare decisis does not apply, for a perfectly sound principle as applied to one set of facts might be
entirely inappropriate when a factual variance is introduced.

The disparity in facts between the Mercado case and the instant case is best exemplified by the fact that the former decision ruled on
the status of employment of farm laborers, who, as found by the labor arbiter, work only for a definite period for a farm worker, after
which they offer their services to other farm owners, considering the area in question being comparatively small, comprising of
seventeen and a half (17 1/2) hectares of land, such that the planting of rice and sugar cane thereon could not possibly entail a whole
year operation. The herein case presents a different factual condition as the enormity of the size of the sugar hacienda of petitioner,
with an area of two hundred thirty-six (236) hectares, simply do not allow for private respondents to render work only for a definite
period.
Indeed, in a number of cases, the Court has recognized the peculiar facts attendant in the Mercado case.

Primary standard for determining regular employment is the reasonable connection between the particular activity performed by the
employee in relation to the usual trade or business of the employer. 28 There is no doubt that the respondents were performing work
necessary and desirable in the usual trade or business of an employer. Hence, they can properly be classified as regular employees.

For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that
are seasonal in nature. They must have been employed only for the duration of one season. 29 While the records sufficiently show
that the respondents' work in the hacienda was seasonal in nature, there was, however, no proof that they were hired for the duration
of one season only. In fact, the payrolls, 30 submitted in evidence by the petitioners, show that they availed the services of the
respondents since 1991. Absent any proof to the contrary, the general rule of regular employment should, therefore, stand. It bears
stressing that the employer has the burden of proving the lawfulness of his employee's dismissal.

Philippine Global Communications Inc. vs. De Vera

G.R. No. 157214, June 7, 2005

Facts:
Ricardo De Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. At the crux of
the controversy is Dr. De Vera's status vis a vis petitioner when the latter terminated his engagement.

It appears that on 15 May 1981, De Vera, via a letter dated 15 May 1981, 3 offered his services to the petitioner, therein proposing his
plan of works required of a practitioner in industrial medicine, to include the following:
1. Application of preventive medicine including periodic check-up of employees;
2. Holding of clinic hours in the morning and afternoon for a total of five (5) hours daily for consultation services to
employees;
3. Management and treatment of employees that may necessitate hospitalization including emergency cases and accidents;
4. Conduct pre-employment physical check-up of prospective employees with no additional medical fee;
5. Conduct home visits whenever necessary;

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6. Attend to certain medical administrative function such as accomplishing medical forms, evaluating conditions of employees
applying for sick leave of absence and subsequently issuing proper certification, and all matters referred which are medical
in nature.

The parties agreed and formalized respondent's proposal in a document denominated as RETAINERSHIP CONTRACT 4 which will be
for a period of one year subject to renewal, it being made clear therein that respondent will cover "the retainership the Company
previously had with Dr. K. Eulau" and that respondent's "retainer fee" will be at P4,000.00 a month. Said contract was renewed yearly.
5 The retainership arrangement went on from 1981 to 1994 with changes in the retainer's fee. However, for the years 1995 and 1996,
renewal of the contract was only made verbally. However, in December 1996 when Philcom, thru a letter bearing on the subject
boldly written as "TERMINATION — RETAINERSHIP CONTRACT", informed De Vera of its decision to discontinue the latter's
"retainer's contract with the Company effective at the close of business hours of December 31, 1996" because management has
decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company
premises.

Issue: WON an employer-employee relationship exists between petitioner and respondent

Held:
Applying the four-fold test to this case, we initially find that it was respondent himself who sets the parameters of what his duties
would be in offering his services to petitioner. We note, too, that the power to terminate the parties' relationship was mutually vested
on both. Either may terminate the arrangement at will, with or without cause.

The tenor of this letter indicates that the complainant was proposing to extend his time with the respondent and seeking additional
compensation for said extension. This shows that the respondent PHILCOM did not have control over the schedule of the complainant
as it [is] the complainant who is proposing his own schedule and asking to be paid for the same. This is proof that the complainant
understood that his relationship with the respondent PHILCOM was a retained physician and not as an employee. If he were an
employee he could not negotiate as to his hours of work.

The labor arbiter added the indicia, not disputed by respondent, that from the time he started to work with petitioner, he never was
included in its payroll; was never deducted any contribution for remittance to the Social Security System (SSS); and was in fact
subjected by petitioner to the ten (10%) percent withholding tax for his professional fee, in accordance with the National Internal
Revenue Code, matters which are simply inconsistent with an employer-employee relationship. Clearly, the elements of an employer-
employee relationship are wanting in this case. We may add that the records are replete with evidence showing that respondent had
to bill petitioner for his monthly professional fees. 19 It simply runs against the grain of common experience to imagine that an
ordinary employee has yet to bill his employer to receive his salary.

Finally, remarkably absent from the parties' arrangement is the element of control, whereby the employer has reserved the right to
control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be
accomplished. Here, petitioner had no control over the means and methods by which respondent went about performing his work at
the company premises. He could even embark in the private practice of his profession, not to mention the fact that respondent's work
hours and the additional compensation therefor were negotiated upon by the parties.

Article 280 of the Labor Code, quoted by the appellate court, is not the yardstick for determining the existence of an employment
relationship. As it is, the provision merely distinguishes between two (2) kinds of employees, i.e., regular and casual. It does not
apply where, as here, the very existence of an employment relationship is in dispute.

Lacuesta vs. Ateneo de Manila

G.R. No. 152777, December 9, 2005

Facts:
Respondent Ateneo de Manila University (Ateneo) hired, on a contractual basis, petitioner Lolita R. Lacuesta as a part-time lecturer in
its English Department for the second semester of school year 1988-1989.   She was re-hired, still on a contractual basis, for the first
and second semesters of school year 1989-1990. On July 13, 1990, the petitioner was first appointed as full-time instructor on
probation, in the same department effective June 1, 1990 until March 31, 1991. Thereafter, her contract as faculty on probation was
renewed effective April 1, 1991 until March 31, 1992.  She was again hired for a third year effective April 1, 1992 until March 31,
1993.   During these three years she was on probation status. Respondent Dr. Leovino Ma. Garcia, Dean of Ateneo’s Graduate School
and College of Arts and Sciences, notified petitioner that her contract would no longer be renewed because she did not integrate well
with the English Department.Petitioner filed a complaint for illegal dismissal with prayer for reinstatement, back wages, and moral
and exemplary damages.  She contends that Articles 280 and 281 of the Labor Code, not the Manual of Regulations for Private Schools,
is the applicable law to determine whether or not an employee in an educational institution has acquired regular or permanent
status.  She argues that (1) under Article 281, probationary employment shall not exceed six (6) months from date of employment
unless a longer period had been stipulated by an apprenticeship agreement; (2) under Article 280, if the apprenticeship agreement
stipulates a period longer than one year and the employee rendered at least one year of service, whether continuous or broken, the
employee shall be considered as regular employee with respect to the activity in which he is employed while such activity exists; and
(3) it is with more reason that petitioner be made regular since she had rendered services as part-time and full-time English teacher
for four and a half years, services which are necessary and desirable to the usual business of Ateneo.

Issue:

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(1) Whether or not the Court of Appeals erred in ruling that it is the Manual of Regulations For Private Schools, not the Labor Code,
that determines the acquisition of regular or permanent status of faculty members in an educational institution;
(2) Whether or not after completing the three-year probation with an above-average performance, petitioner  already acquired
permanent status. 

Held:
(1) The Manual of Regulations for Private Schools, and not the Labor Code, determines whether or not a faculty member in an
educational institution has attained regular or permanent status.  Under Policy Instructions No. 11 issued by the Department of Labor
and Employment, “the probationary employment of professors, instructors and teachers shall be subject to the standards established
by the Department of Education and Culture.” 

Section 93 of the 1992 Manual of Regulations for Private Schools provides that full-time teachers who have satisfactorily completed
their probationary period shall be considered regular or permanent. Moreover, for those teaching in the tertiary level, the
probationary period shall not be more than six consecutive regular semesters of satisfactory service.The requisites to acquire
permanent employment, or security of tenure, are
(1) the teacher is a full-time teacher;
(2) the teacher must have rendered three consecutive years of service; and
(3) such service must have been satisfactory.

(2) A part-time teacher cannot acquire permanent status.

Only when one has served as a full-time teacher can he acquire permanent or regular status.  The petitioner was a part-time lecturer
before she was appointed as a full-time instructor on probation.  As a part-time lecturer, her employment as such had ended when her
contract expired.  Thus, the three semesters she served as part-time lecturer could not be credited to her in computing the number of
years she has served to qualify her for permanent status. And completing the probation period does not automatically qualify her to
become a permanent employee of the university.  Petitioner could only qualify to become a permanent employee upon fulfilling the
reasonable standards for permanent employment as faculty member. 

Consistent with academic freedom and constitutional autonomy, an institution of higher learning has the prerogative to provide
standards for its teachers and determine whether these standards have been met.At the end of the probation period, the decision to
re-hire an employee on probation, belongs to the university as the employer alone.

Posedion Fishing/Terry De Jesus vs. NLRC

G.R. No. 168052, February 20, 2006

Facts:
Private respondent was employed by Poseidon Fishing in January 1988 as Chief Mate. After five years, he was promoted to Boat
Captain. In 1999, petitioners, without reason, demoted respondent from Boat Captain to Radio Operator of petitioner Poseidon. 4 As a
Radio Operator, he monitored the daily activities in their office and recorded in the duty logbook the names of the callers and time of
their calls.
On 3 July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks. However, he was able to record the same in
the other logbook. Consequently, when he reviewed the two logbooks, he noticed that he was not able to record the said call in one of
the logbooks so he immediately recorded the 7:25 a.m. call after the 7:30 a.m. entry. Around 9:00 o'clock in the morning of 4 July
2000, petitioner Terry de Jesus detected the error in the entry in the logbook. Subsequently, she asked private respondent to prepare
an incident report to explain the reason for the said oversight. At around 2:00 o'clock in the afternoon of that same day, petitioner
Poseidon's secretary, namely Nenita Laderas, summoned private respondent to get his separation pay amounting to Fifty-Five
Thousand Pesos (P55,000.00). However, he refused to accept the amount as he believed that he did nothing illegal to warrant his
immediate discharge from work.

Rising to the occasion, private respondent filed a complaint for illegal dismissal on 11 July 2000

Issue:
WON respondent was a contractual or regular employee at the time he was terminated

Held:
In the case under consideration, the agreement has such an objective — to frustrate the security of tenure of private respondent- and
fittingly, must be nullified. In this case, petitioners' intent to evade the application of Article 280 of the Labor Code is unmistakable. In
a span of 12 years, private respondent worked for petitioner company first as a Chief Mate, then Boat Captain, and later as Radio
Operator. His job was directly related to the deep-sea fishing business of petitioner Poseidon. His work was, therefore, necessary and
important to the business of his employer. Such being the scenario involved, private respondent is considered a regular employee of
petitioner under Article 280 of the Labor Code.

Ostensibly, in the case at bar, at different times, private respondent occupied the position of Chief Mate, Boat Captain, and Radio
Operator. In petitioners' interpretation, however, this act of hiring and re-hiring actually highlight private respondent's contractual
status saying that for every engagement, a fresh contract was entered into by the parties at the outset as the conditions of
employment changed when the private respondent filled in a different position. But to this Court, the act of hiring and re-hiring in
various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-

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hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners'
business or trade.

Petitioners next assert that deep-sea fishing is a seasonal industry because catching of fish could only be undertaken for a limited
duration or seasonal within a given year. Thus, according to petitioners, private respondent was a seasonal or project employee.

As correctly pointed out by the Court of Appeals, the "activity of catching fish is a continuous process and could hardly be considered
as seasonal in nature." In Philex Mining Corp. v. National Labor Relations Commission, 34 we defined project employees as those
workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project has been determined at
the time of the engagement of the employee. The principal test for determining whether particular employees are "project employees"
as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific project or
undertaking," the duration and scope of which were specified at the time the employees were engaged for that project. In this case,
petitioners have not shown that private respondent was informed that he will be assigned to a "specific project or undertaking." As
earlier noted, neither has it been established that he was informed of the duration and scope of such project or undertaking at the
time of their engagement.

More to the point, in Maraguinot, Jr. v. National Labor Relations Commission, 35 we ruled that once a project or work pool
employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of
tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee
must be deemed a regular employee.

Cebu Metal Corp., vs. Saliling

G.R. No. 154463, September 5, 2006

Facts:
Cebu Metal Corporation is a corporation engaged in buying and selling of scrap iron. In the Bacolod branch it has (3) regular
employees holding such positions as Officer-in-Charge, a scaler, and a yardman, whose salaries are paid directly by its main office in
Cebu. The complainants, Gregorio Saliling, Elias Bolido, Manuel Alquiza, Benjie Amparado are the one who undertakes pakiao work in
the unloading of scrap iron. The Bacolod buying station is mainly a stockyard where scrap metal delivered by its suppliers are
stockpiled. The supply of scrap metal is not steady as it depends upon many factors, such as availability of supplies, price, competition
and demand among others. There are weeks were there are no delivery while there are weeks were quite a number of trucks are
delivered to the stockyard. The arrivals of these trucks and the deliveries of scrap metal iron are not regular and the schedules of
deliveries to the stockyard are not known before hand by the respondent Cebu Metal Corporation. These trucks have their own driver
and truck boys employed by the different suppliers. Sometimes, these trucks do not have any truck boys, and in these instances, the
corporation hires the services of people for the unloading of the scrap metal from these trucks. It is for this reason that the unloaders
hired by the respondent to unload are basically seasonal workers. They are hired whenever there are trucks of suppliers do not have
any accompanying truck boys. Whoever is available and whoever are willing to help unload on a particular occasion are hired to
unload. Usually, there is a leader for a particular group who is tasked to unload the scrap metal from a particular truck. It is this leader
who distributes the individual takes of each member of the particular group unloading the scrap metal from a particular work The
complainants maintained that they are hired by Cebu Metal Corparation as employees and filed on January 10, 1997 a complaint with
the regional arbitration in Bacolod City for underpayment of wages and non-payment of the following benefits 1. 13 th month pay; 2.
holiday pay; 3. service incentive leave pay. On March 6, 1998 includes the claim for illegal dismissal because they were dismissed after
the filing of the complaint. The Labor Arbiter rendered a decision in favor of the complainants. Aggrieved, Cebu Metal Corporation
filed an appeal with the NLRC. The NLRC reversed and set aside the decision of the Labor Arbiter and held that the complainants were
not regular employees, thus, they could not have been illegally dismissed. The order of the reversal was based on the Commission’s
finding that the petty cash vouchers submitted by Cebu Metal Corporation confirmed the fact that unloaders were paid on “pakiao” or
task basis at Php 15.00 per metric ton. The Commission further rationalized that with the irregular nature of the work involved in the
stoppage and resumption of which depended solely on the availability or supply of scrap metal, it necessarily follows that after the job
of unloading was completed and unloaders are paid the contract price, the latter’s working relationship with Cebu Metal Corporation
legally ended. They were then free to offer their services to others.

The complainants challenged the decision of the NLRC with the Court of Appeals, and it rendered the decision annulling the decision
of the NLRC and reinstated the decision made by the Labor Arbiter. Hence, this petition.

Issue: Whether or not the complainant respondents are regular employees.

Held:
The above findings validate respondent's position as to the nature of complainants' work. Their services are needed only when scrap
metals are delivered which occurs only one or twice a week or sometimes no delivery at all in a given week. The irregular nature of
work, stoppage of work and then work again depending on the supply of scrap metal has not been denied by complainants. On the
contrary they even admitted the same in their Reply to respondent's Appeal. . . . . Indeed, it would be unjust to require respondent to
maintain complainants in the payroll even if there is no more work to be done. To do so would make complainants privileged
retainers who collect payment from their employer for work not done. This is extremely unfair and amount to cuddling of labor at the
expense of management.

The Supreme Court ruled there can be no illegal dismissal to speak of. Besides, the complainants cannot claim regularity in the hiring
every time a truck comes loaded with scrap metal. This is confirmed in the Petty Cash Vouchers which are in the names of different

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leaders who are apportion the amount earned among its members. And, quite telling is the fact that not every truck delivery of scrap
metal requires the services of respondent complainants when particular truck is accompanied by its own unloader. And whenever
required, respondent complainants were not always the ones contracted to undertake the unloading of the trucks since the work was
offered to whomever were available at a given time. It should be remembered that the Philippine Constitution, while inexorably
committed towards the protection of the working class from exploitation and unfair treatment, nevertheless mandates the policy of
social justice so as to strike a balance between an avowed predilection for labor, on the one hand, and the maintenance of the legal
rights of capital, the proverbial hen that lays the golden egg, on the other. Indeed we should not be mindful of the legal norm that
justice is in every case for the deserving, to be dispensed with in the light of established facts, the applicable law, an existing
jurisprudence.

Hermonias L. Liganza vs. RBL Shipyard Corporation

G.R. NO. 159862, October 17, 2006

Facts:
After working as a carpenter for respondent since August 1991, petitioner's employment was terminated on 30 October 1999. This
prompted petitioner to file a complaint for illegal dismissal, alleging that on said date he was verbally informed that he was already
terminated from employment and barred from entering the premises. On the same occasion, he was told to look for another job. Thus,
he claimed that he was unceremoniously terminated from employment without any valid or authorized cause. On the other hand,
respondent insisted that petitioner was a mere project employee who was terminated upon completion of the project for which he
was hired.

Issue: WON petitioner is a project employee and whether his termination was illegal.

Held:
Before an employee hired on a per project basis can be dismissed, a report must be made to the nearest employment office of the
termination of the services of the workers every time it completed a project, pursuant to Policy Instruction No. 20.

Petitioner claims he is a regular employee since he worked for respondent continuously and without interruption from 13 August
1991 up to 30 October 1999 and that his work as a carpenter was necessary and desirable to the latter's usual business of
shipbuilding and repair. He asserts that when he was hired by respondent in 1991, there was no employment contract fixing a definite
period or duration of his engagement, and save for the contract covering the period 20 September 1999 to 19 March 2000,
respondent had been unable to show the other project employment contracts ever since petitioner started working for the company.
Furthermore, respondent failed to file as many termination reports as there are completed projects involving petitioner, he adds.

On the other hand, respondent insists that petitioner is a project employee as evidenced by the project employment contracts it
signed with him and employee termination reports it submitted to the DOLE.

In the instant case, respondent seeks to prove the status of petitioner's employment through four (4) employment contracts covering
a period of only two (2) years to declare petitioner as a project employee.

Respondent failed to present the contracts purportedly covering petitioner's employment from 1991 to July 1997, spanning six (6)
years of the total eight (8) years of his employment. To explain its failure in this regard, respondent claims that the records and
contracts covering said period were destroyed by rains and flashfloods that hit the company's office.

The four employment contracts are not sufficient to reach the conclusion that petitioner was, and has been, a project employee earlier
since 1991. The Court is not satisfied with the explanation that the other employment contracts were destroyed by floods and rains.
Respondent could have used other evidence to prove project employment, but it did not do so, seemingly content with the convenient
excuse of "destroyed documents."

This Court has held that an employment ceases to be co-terminous with specific projects when the employee is continuously rehired
due to the demands of employer's business and re-engaged for many more projects without interruption. In Maraguinot, Jr. v. NLRC
(Second Division), 21 the Court ruled that "once a project or work pool employee has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and
indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant to
Article 280 of the Labor Code and jurisprudence."

All considered, there are serious doubts in the evidence on record that petitioner is a project employee, or that he was terminated for
just cause. These doubts shall be resolved in favor of petitioner, in line with the policy of the law to afford protection to labor and
construe doubts in favor of labor.

It is well-settled that the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause.
When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers the matter a case of
illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause. For failure to
prove otherwise, the Court has no recourse but to grant the petition.

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Fabeza vs. San Miguel Corporation

G.R. No. 150658, February 9, 2007

Facts:
Petitioners, along with Joselito de Lara and John Alovera, were hired by respondent San Miguel Corporation (SMC) as "Relief
Salesmen" for the Greater Manila Area (GMA) under separate but almost similarly worded "Contracts of Employment With Fixed
Period." After having entered into successive contracts of the same nature with SMC, the services of petitioners, as well as de Lara and
Alovera, were terminated after SMC no longer agreed to forge another contract with them.

Respondent SMC and its co-respondent Arman Hicarte, who was its Human Resources Manager, claimed that the hiring of petitioners
was not intended to be permanent, as the same was merely occasioned by the need to fill in a vacuum arising from SMC's gradual
transition to a new system of selling and delivering its products. Claiming that they were illegally dismissed, petitioners, as well as de
Lara and Alovera, filed separate complaints for illegal dismissal against respondents.

Issue: Whether they were hired for a fixed period, as claimed by respondents, or as regular employees who may not be dismissed
except for just or authorized causes.

Held:
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such activity actually exists.

Although Article 280 does not expressly recognize employment for a fixed period, which is distinct from employment which has been
fixed for a specific project or undertaking, Brent School, Inc. v. Zamora 11 has clarified that employment for a fixed period is not in
itself illegal.

Thus, even if the duties of an employee consist of activities usually necessary or desirable in the usual business of the employer, it
does not necessarily follow that the parties are forbidden from agreeing on a period of time for the performance of such activities
through a contract of employment for a fixed term.

Albeit the Court of Appeals ruled in respondents' favor on the basis of a finding that petitioners were validly hired as project
employees, respondents deny that petitioners were project employees, asserting that they were hired only as fixed-term employees.

Since respondents attribute the termination of petitioners' employment to the expiration of their respective contracts, a
determination of whether petitioners were hired as project or seasonal employees, or as fixed-term employees without any force,
duress or improper pressure having been exerted against them is in order. If petitioners fall under any of these categories, then
indeed their termination follows from the expiration of their contracts.

Since, as earlier stated, respondents themselves deny that petitioners were project employees, and they do not allege that they were
seasonal employees, what remains for determination is whether petitioners were fixed-term employees under the Brent doctrine.

Significantly, both the Labor Arbiter and the NLRC found that petitioners were all regular employees. The NLRC even explicitly stated
that the periods stated in petitioners' contracts were fixed not because of temporary exigencies but because of a scheme to preclude
petitioners from acquiring tenurial security.

Brent instructs that a contract of employment stipulating a fixed-term, even if clear as regards the existence of a period, is invalid if it
can be shown that the same was executed with the intention of circumventing security of tenure, and should thus be ignored.

Indeed, substantial evidence exists in the present case showing that the subject contracts were utilized to deprive petitioners of their
security of tenure.

As Brent pronounces, a fixed-term employment is valid only under certain circumstances, such as when the employee himself insists
upon the period, or where the nature of the engagement is such that, without being seasonal or for a specific project, a definite date of
termination is a sine qua non.

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Soriano vs. NLRC

G.R. No. 165594, April 23, 2007 citing 2005 Filipina Pre-fabricated Bldg. System (Filisystem)

Facts:
Petitioner and certain individuals namely Sergio Benjamin (Benjamin), Maximino Gonzales (Gonzales), and Noel Apostol (Apostol)
were employed by the respondent as Switchman Helpers in its Tondo Exchange Office (TEO). After participating in several trainings
and seminars, petitioner, Benjamin, and Gonzales were promoted as Switchmen. Apostol, on the other hand, was elevated to the
position of Frameman. One of their duties as Switchmen and Frameman was the manual operation and maintenance of the Electronic
Mechanical Device (EMD) of the TEO.

In November 1995, respondent PLDT implemented a company-wide redundancy program. Subsequently, the respondent PLDT gave
separate letters dated 15 July 1996 to petitioner, Benjamin, Gonzales, and Apostol informing them that their respective positions were
deemed redundant due to the above-cited reasons and that their services will be terminated on 16 August 1996. They requested the
respondent PLDT for transfer to some vacant positions but their requests were denied since all positions were already filled up.
Hence, on 16 August 1996, respondent PLDT dismissed the four from employment.

Held:
Redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the
business enterprise. A position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a
number of factors such as over-hiring of workers, decrease in volume of business, or dropping a particular product line or service
activity previously manufactured or undertaken by the enterprise.

The records show that respondent PLDT had sufficiently established the existence of redundancy in the position of Switchman.

Generally, deeds of release, waiver or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or
from contesting the legality of their dismissal since quitclaims are looked upon with disfavor and are frowned upon as contrary to
public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the
consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding
undertaking.

The requisites for a valid quitclaim are: 1) that there was no fraud or deceit on the part of any of the parties; 2) that the consideration
for the quitclaim is credible and reasonable; and 3) that the contract is not contrary to law, public order, public policy, morals or good
customs or prejudicial to a third person with a right recognized by law.

It cannot be gainfully said that the petitioner did not fully understand the consequences of signing the "Receipt, Release, and
Quitclaim" dated 15 August 1996. Petitioner is not an illiterate person who needs special protection. He held responsible positions in
the office of the respondent PLDT and had attended and passed various training courses for his position. It is thus assumed that he
comprehended the contents of the "Receipt, Release, and Quitclaim" which he signed on 15 August 1996. There is also no showing
that the execution thereof was tainted with deceit or coercion.

Given the foregoing circumstances, the "Receipt, Release, and Quitclaim" dated 15 August 1996 should be considered as legal and
binding on petitioner. It is settled that a legitimate waiver which represents a voluntary and reasonable settlement of a worker's claim
should be respected as the law between the parties.

Caseres vs. Universal Robina Sugar Milling Corp.

G.R. No. 159343, September 28, 2007

Facts:
Universal Robina Sugar Milling Corporation (respondent) is a corporation engaged in the cane sugar milling business. Pedy Caseres
(petitioner Caseres) started working for respondent in 1989, while Andito Pael (petitioner Pael) in 1993. At the start of their
respective employments, they were made to sign a Contract of Employment for Specific Project or Undertaking. Petitioners' contracts
were renewed from time to time; until May 1999 when they were informed that their contracts will not be renewed anymore.
Petitioners filed a complaint for illegal dismissal, regularization, incentive leave pay, 13th month pay, damages and attorney’s fees.

Issue: Whether or not the petitioners are seasonal/project/term employees and not regular employees of respondents

Held:
Article 280 of the Labor Code provides:

ART. 280. Regular and Casual Employees. – The provision of written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the
duration of the season.

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An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such actually exists.

The foregoing provision provides for three kinds of employees: (a) regular employees or those who have been “engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer”; (b) project employees or those
“whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the
employment is for the duration of the season”; and (c) casual employees or those who are neither regular nor project employees.

The principal test for determining whether an employee is a project employee or a regular employee is whether the employment has
been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the
engagement of the employee. 10 A project employee is one whose employment has been fixed for a specific project or undertaking,
the completion or termination of which has been determined at the time of the engagement of the employee or where the work or
service to be performed is seasonal in nature and the employment is for the duration of the season. A true project employee should be
assigned to a project which begins and ends at determined or determinable times, and be informed thereof at the time of hiring.

In the case at bar, We note that complainants never bothered to deny that they voluntarily, knowingly and willfully executed the
contracts of employment. Neither was there any showing that respondents exercised moral dominance on the complainants, . . . it is
clear that the contracts of employment are valid and binding on the complainants.

The execution of these contracts in the case at bar is necessitated by the peculiar nature of the work in the sugar industry which has
an off milling season. The very nature of the terms and conditions of complainants' hiring reveals that they were required to perform
phases of special projects for a definite period after, their services are available to other farm owners. This is so because the planting
of sugar does not entail a whole year operation, and utility works are comparatively small during the off-milling season.

The fact that petitioners were constantly re-hired does not ipso facto establish that they became regular employees. Their respective
contracts with respondent show that there were intervals in their employment. In petitioner Caseres's case, while his employment
lasted from August 1989 to May 1999, the duration of his employment ranged from one day to several months at a time, and such
successive employments were not continuous. With regard to petitioner Pael, his employment never lasted for more than a month at a
time. These support the conclusion that they were indeed project employees, and since their work depended on the availability of
such contracts or projects, necessarily the employment of respondent's work force was not permanent but co-terminous with the
projects to which they were assigned and from whose payrolls they were paid.

Accordingly, petitioners cannot complain of illegal dismissal inasmuch as the completion of the contract or phase thereof for which
they have been engaged automatically terminates their employment.

Pier 8 Arrastre & Stevedoring Services, Inc. vs Boclot

G.R. No. 173849, September 28, 2007

Facts:
Petitioner Pier 8 Arrastre and Stevedoring Services, Inc. (PASSI) is a domestic corporation engaged in the business of providing
arrastre and stevedoring services[5] at Pier 8 in the Manila North Harbor. PASSI has been rendering arrastre and stevedoring
services at the port area since 1974 and employs stevedores who assist in the loading and unloading of cargoes to and from the
vessels. Petitioner Eliodoro C. Cruz is its Vice-President and General Manager. Respondent Jeff B. Boclot was hired by PASSI to
perform the functions of a stevedore starting 20 September 1999.

On 15 April 2000, the Philippine Ports Authority (PPA) seized the facilities and took over the operations of PASSI through its Special
Takeover Unit, absorbing PASSI workers as well as their relievers. By virtue of a Decision dated 9 January 2001 of the Court of
Appeals, petitioners were able to regain control of their arrastre and stevedoring operations at Pier 8 on 12 March 2001.

On 9 May 2003, respondent filed a Complaint with the Labor Arbiter of the NLRC, claiming regularization; payment of service
incentive leave and 13th month pays; moral, exemplary and actual damages; and attorney's fees. Respondent alleged that he was
hired by PASSI in October 1999 and was issued company ID No. 304, 8 a PPA Pass and SSS documents. In fact, respondent contended
that he became a regular employee by April 2000, since it was his sixth continuous month in service in PASSI's regular course of
business. He argued on the basis of Articles 280 9 and 281 10 of the Labor Code. He maintains that under paragraph 2 of Article 280,
he should be deemed a regular employee having rendered at least one year of service with the company. In opposition thereto,
petitioners alleged that respondent was hired as a mere "reliever" stevedore and could thus not become a regular employee

Held:
Under the 1987 Philippine Constitution, the State affords full protection to labor, local and overseas, organized and unorganized; and
the promotion of full employment and equality of employment opportunities for all. The State affirms labor as a primary social
economic force and guarantees that it shall protect the rights of workers and promote their welfare.

The Labor Code, which implements the foregoing Constitutional mandate, draws a fine line between regular and casual employees to
protect the interests of labor. 19 "Its language evidently manifests the intent to safeguard the tenurial interest of the worker who may
be denied the rights and benefits due a regular employee by virtue of lopsided agreements with the economically powerful employer

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who can maneuver to keep an employee on a casual status for as long as convenient." Thus, the standards for determining whether an
employee is a regular employee or a casual or project employee have been delineated in Article 280 of the Labor Code.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such actually exist.

Under the foregoing provision, a regular employee is (1) one who is either engaged to perform activities that are necessary or
desirable in the usual trade or business of the employer except for project 21 or seasonal employees; or (2) a casual employee who
has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed. 22
Additionally, Article 281 of the Labor Code further considers a regular employee as one who is allowed to work after a probationary
period. Based on the aforementioned, although performing activities that are necessary or desirable in the usual trade or business of
the employer, an employee such as a project or seasonal employee is not necessarily a regular employee. The situation of respondent
is similar to that of a project or seasonal employee, albeit on a daily basis.

Under the second paragraph of the same provision, all other employees who do not fall under the definition of the preceding
paragraph are casual employees. However, the second paragraph also provides that it deems as regular employees those casual
employees who have rendered at least one year of service regardless of the fact that such service may be continuous or broken.

The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of
the work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been
performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business.
Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. (Emphasis
supplied.)

PASSI is engaged in providing stevedoring and arrastre services in the port area in Manila. Stevedoring, dock and arrastre operations
include, but are not limited to, the opening and closing of a vessel's hatches; discharging of cargoes from ship to truck or dock, lighters
and barges, and vice-versa; movement of cargoes inside vessels, warehouses, terminals and docks; and other related work. In line
with this, petitioners hire stevedores who assist in the loading and unloading of cargoes to and from the vessels.

Based on the circumstances of the instant case, this Court agrees. It takes judicial notice 24 that it is an industry practice in port
services to hire "reliever" stevedores in order to ensure smooth-flowing 24-hour stevedoring and arrastre operations in the port area.
No doubt, serving as a stevedore, respondent performs tasks necessary or desirable to the usual business of petitioners. However, it
should be deemed part of the nature of his work that he can only work as a stevedore in the absence of the employee regularly
employed for the very same function. Bearing in mind that respondent performed services from September 1999 until June 2003 for a
period of only 228.5 days in 36 months, or roughly an average of 6.34 days a month; while a regular stevedore working for
petitioners, on the other hand, renders service for an average of 16 days a month, demonstrates that respondent's employment is
subject to the availability of work, depending on the absences of the regular stevedores. Moreover, respondent does not contest that
he was well aware that he would only be given work when there are absent or unavailable employees. Respondent also does not
allege, nor is there any showing, that he was disallowed or prevented from offering his services to other cargo handlers in the other
piers at the North Harbor other than petitioners. As aforestated, the situation of respondent is akin to that of a seasonal or project or
term employee, albeit on a daily basis

The second paragraph thereof stipulates in unequivocal terms that all other employees who do not fall under the definitions in the
first paragraph of regular, project and seasonal employees, are deemed casual employees. 25 Not qualifying under any of the kinds of
employees covered by the first paragraph of Article 280 of the Labor Code, then respondent is a casual employee under the second
paragraph of the same provision.

The same provision, however, provides that a casual employee can be considered as regular employee if said casual employee has
rendered at least one year of service regardless of the fact that such service may be continuous or broken. Section 3, Rule V, Book II of
the Implementing Rules and Regulations of the Labor Code clearly defines the term "at least one year of service" to mean service
within 12 months, whether continuous or broken, reckoned from the date the employee started working, including authorized
absences and paid regular holidays, unless the working days in the establishment as a matter of practice or policy, or that provided in
the employment contract, is less than 12 months, in which case said period shall be considered one year. 26 If the employee has been
performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business
of the employer. 27 Applying the foregoing, respondent, who has performed actual stevedoring services for petitioners only for an
accumulated period of 228.5 days does not fall under the classification of a casual turned regular employee after rendering at least
one year of service, whether continuous or intermittent.

Where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by an
employee, such imposition should be struck down or disregarded as contrary to public policy and morals. 30 However, we take this
occasion to emphasize that the law, while protecting the rights of the employees, authorizes neither the oppression nor the
destruction of the employer. When the law tilts the scale of justice in favor of labor, the scale should never be so tilted if the result
would be an injustice to the employer. Thus, this Court cannot be compelled to declare respondent as a regular employee when by the

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nature of respondent's work as a reliever stevedore and his accumulated length of service of only eight months do not qualify him to
be declared as such under the provisions of the Labor Code alone.

In light of the foregoing, petitioners must accord respondent the status of a regular employee.

Pacquing vs. Coca-Cola Bottlers Phils., Inc.;

G.R. No. 157966, January 31, 2008
citing Magsalin vs. National Organization of Workingmen, G.R. No. 148492, May 9, 2003

Facts:
Eddie Pacquing, Roderick Centeno, Juanito M. Guerra, Claro Dupilad, Jr., Louie Centeno, David Reblora, Raymundo Andrade
(petitioners) were sales route helpers or cargadores-pahinantes of Coca-Cola Bottlers Philippines, Inc.

Petitioners were part of a complement of three personnel comprised of a driver, a salesman and a regular route helper, for every
delivery truck.  They worked exclusively at respondent's plants, sales offices, and company premises. On October 22, 1996, petitioners
filed a Complaint against respondent for unfair labor practice and illegal dismissal with claims for regularization, recovery of benefits
under the Collective Bargaining Agreement (CBA), moral and exemplary damages, and attorney's fees. In their Position Paper,
petitioners alleged that they should be declared regular employees of respondent since the nature of their work as cargadores-
pahinantes was necessary or desirable to respondent's usual business and was directly related to respondent's business and trade. In
its Position Paper, respondent denied liability to petitioners and countered that petitioners were temporary workers who were
engaged for a five-month period to act as substitutes for an absent regular employee.

Held:
WON the respondent's sales route helpers or cargadores or pahinantes are regular workers of respondent has already been resolved
in Magsalin v.  National Organization of Working Men.

The basic law on the case is Article 280 of the Labor Code. 

In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or trade of the employer.  The standard,
supplied by the law itself, is whether the work undertaken is necessary or desirable in the usual business or trade of the employer, a
fact that can be assessed by looking into the nature of the services rendered and its relation to the general scheme under which the
business or trade is pursued in the usual course.  It is distinguished from a specific undertaking that is divorced from the normal
activities required in carrying on the particular business or trade.  But, although the work to be performed is only for a specific project
or seasonal, where a person thus engaged has been performing the job for at least one year, even if the performance is not continuous
or is merely intermittent, the law deems the repeated and continuing need for its performance as being sufficient to indicate the
necessity or desirability of that activity to the business or trade of the employer.   The employment of such person is also then deemed
to be regular with respect to such activity and while such activity exists.

The argument of petitioner that its usual business or trade is softdrink manufacturing and that the work assigned to respondent
workers as sales route helpers so involves merely â €œpost production activities, one which is not indispensable in the manufacture of
its products, scarcely can be persuasive.  If, as so argued by petitioner company, only those whose work are directly involved in the
production of softdrinks may be held performing functions necessary and desirable in its usual business or trade, there would have
then been no need for it to even maintain regular truck sales route helpers.  The nature of the work performed must be viewed from a
perspective of the business or trade in its entirety and not on a confined scope.

The repeated rehiring of respondent workers and the continuing need for their services clearly attest to the necessity or desirability
of their services in the regular conduct of the business or trade of petitioner company .  The Court of Appeals has found each of
respondents to have worked for at least one year with petitioner company.   While this Court, in Brent School, Inc.  vs.  Zamora,has
upheld the legality of a fixed-term employment, it has done so, however, with a stern admonition that where from the circumstances it
is apparent that the period has been imposed to preclude the acquisition of tenurial security by the employee, then it should be struck
down as being contrary to law, morals, good customs, public order and public policy.   The pernicious practice of having employees,
workers and laborers, engaged for a fixed period of few months, short of the normal six-month probationary period of employment,
and, thereafter, to be hired on a day-to-day basis, mocks the law.  Any obvious circumvention of the law cannot be countenanced.  The
fact that respondent workers have agreed to be employed on such basis and to forego the protection given to them on their security of
tenure, demonstrate nothing more than the serious problem of impoverishment of so many of our people and the resulting
unevenness between labor and capital.  A contract of employment is impressed with public interest.  The provisions of applicable
statutes are deemed written into the contract, and the parties are not at liberty to insulate themselves and their relationships from the
impact of labor laws and regulations by simply contracting with each other.

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Agusan Del Norte Electronic vs. Cagampang

G.R. No. 167627, October 10, 2008

Facts:
Respondents Joel Cagampang and Glenn Garzon started working as linemen for petitioner Agusan del Norte Electric Cooperative, Inc.
(ANECO) on October 1, 1990, under an employment contract which was for a period not exceeding three months.

When the contract expired, the two were laid-off for one to five days and then ordered to report back to work but on the basis of job
orders. After several renewals of their job contracts in the form of job orders for similar employment periods of about three months
each, the said contracts eventually expired on April 31, 1998 and July 30, 1999. Respondents' contracts were no longer renewed,
resulting in their loss of employment.

Thus, on January 11, 2001, respondents filed an illegal dismissal case against petitioners

Issue: WON the respondents were illegally dismissed.

Held:
After considering the facts and the submissions of the parties, we are in agreement that respondents were illegally dismissed, and that
the petition by the employer lacks merit.

There is no dispute that the respondents' work as linemen was necessary or desirable in the usual business of ANECO. Additionally,
the respondents have been performing the job for at least one year. The law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business.

The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed
by the employee in relation to the usual business or trade of the employer. Also, if the employee has been performing the job for at
least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for
its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. Thus, we held that where
the employment of project employees is extended long after the supposed project has been finished, the employees are removed from
the scope of project employees and are considered regular employees.

While length of time may not be the controlling test for project employment, it is vital in determining if the employee was hired for a
specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer.
Here, private respondent had been a project employee several times over. His employment ceased to be coterminous with specific
projects when he was repeatedly re-hired due to the demands of petitioner's business. Where from the circumstances it is apparent
that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as
contrary to public policy, morals, good customs or public order.

Respondents in the present case being regular employees, ANECO as the employer had the burden of proof to show that the
respondents' termination was for a just cause. Unfortunately, however, what petitioners did was merely to refuse, without justifiable
reason, to renew respondents' work contracts for the performance of what would otherwise be regular jobs in relation to the trade or
business of the former. 13 Such conduct dismally falls short of the requirements of our labor laws regarding dismissals. No twin
notices of termination were issued to the employees, hence the employer did not observe due process in dismissing them from their
employment. Their dismissals were patently illegal.

In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid cause; failure to do
so would necessarily mean that the dismissal was illegal. The employer's case succeeds or fails on the strength of its evidence and not
on the weakness of the employee's defense. If doubt exists between the evidence presented by the employer and the employee, the
scales of justice must be tilted in favor of the latter. Moreover, the quantum of proof required in determining the legality of an
employee's dismissal is only substantial evidence. Substantial evidence is more than a mere scintilla of evidence or relevant evidence
as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably
opine otherwise.

William Uy Construction et. al vs. Trinidad

GR No. 183250, March 10, 2010

Facts:
Jorge R. Trinidad filed a complaint for illegal dismissal and unpaid benefits against petitioner William Uy Construction Corporation.  
Trinidad claimed that he had been working with the latter company for 16 years since 1988 as driver of its service vehicle, dump
truck, and transit mixer.  He had signed several employment contracts with the company that identified him as a project employee
although he had always been assigned to work on one project after another with some intervals. Respondent Trinidad further alleged
that petitioner company terminated him from work after it shut down operations because of lack of projects.   He learned later,
however, that although it opened up a project in Batangas, it did not hire him back for that project.

Petitioner company countered http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn1 that it

was in the construction business.  By the nature of such business, it had to hire and engage the services of project construction

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workers, including respondent Trinidad, whose employments had to be co-terminous with the completion of specific company
projects.  For this reason, every time the company employed Trinidad, he had to execute an employment contract with it, called
Appointment as Project Worker. Petitioner company stressed that employment intervals or gaps were inherent in the construction
business. In compliance with labor rules, the company submitted an establishment termination report to the Department of Labor and
Employment (DOLE).

The Labor Arbiter rendered a decision, dismissing respondent Trinidad’s complaint for unjust dismissal. The Labor Arbiter, however,
ordered petitioner company to pay Trinidad P1,500.00 in unpaid service incentive leave, taking into consideration the three-year
prescriptive period for money claims. http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm -
_ftn2 The Labor Arbiter held that, since Trinidad was a project employee and since his company submitted the appropriate
establishment termination report to DOLE, his loss of work cannot be regarded as unjust dismissal. 

Issue: Whether or not petitioner company’s repeated rehiring of respondent Trinidad over several years as project employee for its
various projects automatically entitled him to the status of a regular employee. 

Held:
The test for distinguishing a “project employee” from a “regular employee” is whether or not he has been assigned to carry out a
“specific project or undertaking,” with the duration and scope of his engagement specified at the time his service is
contracted.http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn5  

Here, it is not disputed that petitioner company contracted respondent Trinidad’s service by specific projects with the duration of his
work clearly set out in his employment
contracts.http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn6   He remained a project
employee regardless of the number of years and the various projects he worked for the
company.http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn7  

Generally, length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes
a permanent one, entitled to the security and benefits of regularization.  But this standard will not be fair, if applied to the
construction industry, simply because construction firms cannot guarantee work and funding for its payrolls beyond the life of each
project.  And getting projects is not a matter of course. 

Construction companies have no control over the decisions and resources of project proponents or owners.  There is no construction
company that does not wish it has such control but the reality, understood by construction workers, is that work depended on
decisions and developments over which construction companies have no say.  Respondent Trinidad’s series of employments with
petitioner company were co-terminous with its projects.  When its Boni Serrano-Katipunan Interchange Project was finished,
Trinidad’s employment ended with it.  He was not dismissed.  His employment contract simply ended with the project for which he
had signed up. 

His employment history belies the claim that he continuously worked for the company.  Intervals or gaps separated one contract from
another.http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/183250.htm - _ftn9  Petitioner company needed
only to show the last status of Trinidad’s employment, namely, that of a project employee under a contract that had ended and the
company’s compliance with the reporting requirement for the termination of that employment.  Indeed, both the Labor Arbiter and
the NLRC were satisfied that the fact of petitioner company’s compliance with DOLE Order 19 had been proved in this case.    

Dacuital et al, Vs. L.M. Camus Engineering Corp.

G.R. No. 176748, September 1, 2010

Facts:
Petitioners (LMCEC Employees) filed a complaint for illegal dismissal and non-payment of monetary benefits against respondent LM
Camus Engineering Corp. before the National Labor Relations Commission (NLRC). The employees alleged that they were illegally
dismissed from employment and that their employer failed to pay them their holiday pay, premium pay for holiday, rest day, service
incentive leave pay, and 13th month pay during the existence and duration of their employment. They also averred that they were not
provided with sick and vacation leaves.

Respondents denied that petitioners were illegally dismissed from employment. They claimed that petitioners were project employees
and, upon the completion of each project, they were served notices of project completion. They clarified that the termination of
petitioners’ employment was due to the completion of the projects for which they were hired. Petitioners, however, countered that
they were regular employees as they had been engaged to perform activities which are usually necessary or desirable in the usual
business or trade of LMCEC. They denied that they were project or contractual employees because their employment was continuous
and uninterrupted for more than one (1) year. Finally, they maintained that they were part of a work pool from which LMCEC drew its
workers for its various projects.

The Labor Arbiter rendered a decision declaring the dismissal of the complainant-employees as ILLEGAL and the complainants are
entitled to reinstatement without back wages. The NLRC modified the decision of the Labor Arbiter and ordered the reinstatement of

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the complainants with limited backwages. The respondents appealed the decision to the Court of Appeals and the appellate court held
that the complainants are PROJECT EMPLOYEES and hence, there was no illegal dismissal.

Issue: WON petitioners are PROJECT EMPLOYEES and that their dismissal from employment was legal.

Held:
No.
Article 280 of the Labor Code distinguishes a "project employee" from a "regular employee" in this wise:

Article 280. Regular and casual employment.—The provisions of written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time
of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for
the duration of the season...xxx

The principal test used to determine whether employees are project employees is whether or not the employees were assigned to
carry out a specific project or undertaking, the duration or scope of which was specified at the time the employees were engaged for
that project.

Even though the absence of a written contract does not by itself grant regular status to petitioners, such a contract is evidence that
petitioners were informed of the duration and scope of their work and their status as project employees . In this case, where no
other evidence was offered, the absence of the employment contracts raises a serious question of whether the employees were
properly informed at the onset of their employment of their status as project employees.

While it is true that respondents presented the employment contract of Dacuital, the contract does not show that he was informed of
the nature, as well as the duration of his employment. In fact, the duration of the project for which he was allegedly hired was not
specified in the contract.

Hence, the Dismissal of the petitioners are declared ILLEGAL.

Millennium Erectors Corporation vs. Magallanes

G.R. No. G.R. No. 184362, November 15, 2010

Facts:
Respondent Virgilio Magallanes started working in 1988 as a utility man for Laurencito Tiu (Tiu), Chief Executive Officer of
Millennium Erectors Corporation (petitioner), Tiu's family, and Kenneth Construction Corporation. He was assigned to different
construction projects undertaken by petitioner in Metro Manila, the last of which was for a building in Libis, Quezon City. In July of
2004 he was told not to report for work anymore allegedly due to old age, prompting him to file on August 6, 2004 an illegal dismissal
complaint 1 before the Labor Arbiter.

Issue: Whether or not Magallanes’ dismissal violates security of tenure.

Arguments:
MEC
1.) Respondent was a project employee whom it hired for a building project in Libis on January 30 and which was in near
completion on August 3, 2004, when services were terminated. Said all DOLE requirements were complied.
2.) Petitioner moved for reconsideration of the NLRC decision, contending that respondent's motion for reconsideration
which it treated as an appeal was not perfected, it having been belatedly filed; that there was no statement of the date of
receipt of the appealed decision; and that it lacked verification and copies thereof were not furnished the adverse parties

Held:
1. A project employee is one whose "employment has been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the season."

As the Court has consistently held, the service of project employees are coterminus [sic] with the project and may be terminated upon
the end or completion of that project or project phase for which they were hired. Regular employees, in contrast, enjoy security of
tenure and are entitled to hold on to their work or position until their services are terminated by any of the modes recognized under
the Labor Code.
Assuming arguendo that petitioner hired respondent initially on a per project basis, his continued rehiring, as shown by the sample
payrolls converted his status to that of a regular employee

2. In labor cases, rules of procedure should not be applied in a very rigid and technical sense. Technicalities should not be
permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties. Where the ends of
substantial justice shall be better served, the application of technical rules of procedure may be relaxed.

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As to the defective verification in the appeal memorandum before the NLRC, the same liberality applies. After all, the requirement
regarding verification of a pleading is formal, not jurisdictional.

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Exodus International Construction Corp. vs. Biscocho et. Al

G.R. No. 166109, February 23, 2011

Facts:
Exodus International Construction Corporation obtained a contract from Dutch Boy Philippines, Inc. for the painting of the Imperial
Sky Garden located in Binondo, Manila. Dutch Boy awarded another contract to Exodus for the painting of Pacific Plaza, Towers in
Fort Bonifacio, Taguig City. In the furtherance of its business, Exodus hired respondents as painters on different dates.

On November 27, 2000, respondents filed a complaint for illegal dismissal and non-payment of holiday pay, service incentive leave
pay, 13th month pay and night-shift differential pay.

Petitioners denied respondents' allegations. As regards Gregorio, petitioners averred that he absented himself from work and applied
as a painter with SAEI-EEI which is the general building contractor of Pacific Plaza Towers. Since then, he never reported back to
work.

Guillermo absented himself from work without leave. When he reported for work the following day, he was reprimanded so he
worked only half-day and thereafter was unheard of until the filing of the instant complaint.

Fernando, Ferdinand, and Miguel were caught eating during working hours for which they were reprimanded by their foreman. Since
then they no longer reported for work.
The Labor Arbiter exonerated Exodus from the charge of illegal dismissal as respondents chose not to report for work. Since there is
neither illegal dismissal nor abandonment of job, respondents were ordered be reinstated but without any backwages.

Issues: WON respondents were illegally dismissed for abandonment of work

WON they are regular employees, thus entitled to reinstatement

Held:
(1) No. There was no dismissal, much less illegal, and there was also no abandonment of job to speak of.
As found by the Labor Arbiter, there was no evidence that respondents were dismissed nor were they prevented from returning to
their work. It was only respondents' unsubstantiated conclusion that they were dismissed. As a matter of fact, respondents could not
name the particular person who effected their dismissal and under what particular circumstances. Absent any showing of an overt or
positive act proving that petitioners had dismissed respondents, the latters' claim of illegal dismissal cannot be sustained. Indeed, a
cursory examination of the records reveal no illegal dismissal to speak of.

The Labor Arbiter is also correct in ruling that there was no abandonment on the part of respondents that would justify their
dismissal from their employment.

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a settled rule that mere absence
or failure to report for work is not enough to amount to abandonment of work.  To constitute abandonment of work, two elements
must concur:
1. the employee must have failed to report for work or must have been absent without valid or justifiable reason and
2. there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested
by some overt act.

It is the employer who has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment
without any intention of returning."  It is therefore incumbent upon petitioners to ascertain the respondents' interest or non-interest
in the continuance of their employment. However, petitioners failed to do so.

Petitioners posit that the reinstatement of respondents to their former positions, which were no longer existing, is impossible, highly
unfair and unjust. The project was already completed by petitioners, having completed their tasks, their positions automatically
ceased to exist. Consequently, there were no more positions where they can be reinstated as painters.

(2) Respondents are regular employees of petitioners.

It is clear from the records that when one project is completed, respondents were automatically transferred to the next project
awarded to petitioners. There was no employment agreement given to respondents which clearly spelled out the duration of their
employment, the specific work to be performed and that such is made clear to them at the time of hiring. It is now too late for
petitioners to claim that respondents are project employees whose employment is coterminous with each project or phase of the
project to which they are assigned.

Nonetheless, assuming that respondents were initially hired as project employees, a project employee may acquire the status of a
regular employee.

The evidence on record shows that respondents were employed and assigned continuously to the various projects of petitioners. As
painters, they performed activities which were necessary and desirable in the usual business of petitioners, who are engaged in
subcontracting jobs for painting of residential units, condominium and commercial buildings. As regular employees, respondents are
entitled to be reinstated without loss of seniority rights.

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Respondents are also entitled to their money claims such as the payment of holiday pay, service incentive leave pay, and 13th month
pay. However, they cannot be entitled to backwages. In cases where there is no evidence of dismissal, the remedy is reinstatement
but without backwages.

Leyte Geothermal Power Progressive Employees Union vs. Phil National Oil Co.
G.R. No. 176351, March 30, 2011

Facts:
Respondent Philippine National Oil Corporation-Energy Development Corporation [PNOC-EDC] is a government-owned and
controlled corporation engaged in exploration, development, utilization, generation and distribution of energy resources like
geothermal energy. Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment
(DOLE) Regional Office No. VIII, Tacloban City. Among [respondent's] geothermal projects is the Leyte Geothermal Power Project
located at the Greater Tongonan Geothermal Reservation in Leyte. The said Project is composed of the Tongonan 1 Geothermal
Project (T1GP) and the Leyte Geothermal Production Field Project (LGPF) which provide the power and electricity needed not only in
the provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in the island of Luzon as well. Thus, the
[respondent] hired and employed hundreds of employees on a contractual basis, whereby, their employment was only good up to the
completion or termination of the project and would automatically expire upon the completion of such project. Majority of the
employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner. In view of that
circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees
and for a CBA negotiation with it. However, the [respondent] did not heed such demands of the petitioner. Sometime in 1998 when
the project was about to be completed, the [respondent] proceeded to serve Notices of Termination of Employment upon the
employees who are members of the petitioner. On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the
[respondent] on the ground of purported commission by the latter of unfair labor practice for "refusal to bargain collectively, union
busting and mass termination." On the same day, the petitioner declared a strike and staged such strike. To avert any work stoppage,
then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order, dated January 4, 1999, certifying the labor dispute
to the NLRC for compulsory arbitration. Accordingly, all the striking workers were directed to return to work within twelve (12)
hours from receipt of the Order and for the [respondent] to accept them back under the same terms and conditions of employment
prior to the strike. Further, the parties were directed to cease and desist from committing any act that would exacerbate the situation.
However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably, the petitioner
remained adamant and unreasonable in its position, causing the failure of the negotiation towards a peaceful compromise. In effect,
the petitioner did not abide by [the] assumption order issued by the Secretary of Labor. Consequently, on January 15, 1999, the
[respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment and Damages at the NLRC-RAB VIII in Tacloban
City and at the same time, filed a Petition for Cancellation of Petitioner's Certificate of Registration with DOLE, Regional Office No. VIII.
The two cases were later on consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case was docketed as NLRC
Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified case was indorsed to
the NLRC 4th Division in Cebu City on June 21, 1999 for the proper disposition thereof.

Issues:
1. Whether the officers and members of petitioner Union are project employees of respondent; and
2. Whether the officers and members of petitioner Union engaged in an illegal strike.

Held:
On the first issue, petitioner Union contends that its officers and members performed activities that were usually necessary and
desirable to respondent's usual business. In fact, petitioner Union reiterates that its officers and members were assigned to the
Construction Department of respondent as carpenters and masons, and to other jobs pursuant to civil works, which are usually
necessary and desirable to the department. Petitioner Union likewise points out that there was no interval in the employment
contract of its officers and members, who were all employees of respondent, which lack of interval, for petitioner Union, "manifests
that the `undertaking' is usually necessary and desirable to the usual trade or business of the employer."

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code:

ART. 280. Regular and Casual Employment.-- The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or undertaking the completion or termination
of which has been determined at the time of the engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:   Provided, That, any employee who has
rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such actually exists.

The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been "engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer"; (b)  project employees or those
"whose employment has been fixed for a specific project or undertaking[,] the completion or termination of which has been
determined at the time of the engagement of the employee";  (c) seasonal employees or those who work or perform services which are

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seasonal in nature, and the employment is for the duration of the season; and (d) casual employees or those who are not regular,
project, or seasonal employees. Jurisprudence has added a fifth kind-- a fixed-term employee.
Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of any
contract expressing otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein
is to bring to life the policy enshrined in the Constitution to "afford full protection to labor." Thus, labor contracts are placed on a
higher plane than ordinary contracts; these are imbued with public interest and therefore subject to the police power of the State.
However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific project or
undertaking remain valid under the law: x x x By entering into such a contract, an employee is deemed to understand that his
employment is coterminous with the project. He may not expect to be employed continuously beyond the completion of the project. It
is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons,
are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a
contract of employment. Project employment contracts are not lopsided agreements in favor of only one party thereto. The
employer's interest is equally important as that of the employee[s'] for theirs is the interest that propels economic activity. While it
may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration,
such contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a prejudicial employment
contract. After all, under the law, the interest of the worker is paramount.

In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts indicating
the specific project or phase of work for which they were hired, with a fixed period of employment. The NLRC correctly disposed of
this issue: A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the
[employment contracts] freely and voluntarily. No evidence was presented by [petitioner] Union to prove improper pressure or
undue influence when they entered, perfected and consummated [the employment] contracts. In fact, it was clearly established in the
course of the trial of this case, as explained by no less than the President of [petitioner] Union, that the contracts of employment were
read, comprehended, and voluntarily accepted by them. x x x.

As clearly shown by [petitioner] Union's own admission, both parties had executed the contracts freely and voluntarily without force,
duress or acts tending to vitiate the worker[s'] consent. Thus, we see no reason not to honor and give effect to the terms and
conditions stipulated therein. x x x.
Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence.

It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired
expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court
when supported by substantial evidence. Rule 133, Section 5 defines substantial evidence as "that amount of relevant evidence which
a reasonable mind might accept as adequate to justify a conclusion."

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases.  We may take
cognizance of and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are
inconsistent with those of the CA.
In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union were
project employees. Nonetheless, petitioner Union insists that they were regular employees since they performed work which was
usually necessary or desirable to the usual business or trade of the Construction Department of respondent.

Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual employees was
designed to put an end to casual employment in regular jobs, which has been abused by many employers to prevent so - called casuals
from enjoying the benefits of regular employees or to prevent casuals from joining unions. The same instructions show that the
proviso in the second paragraph of Art. 280 was not designed to stifle small-scale businesses nor to oppress agricultural land owners
to further the interests of laborers, whether agricultural or industrial. What it seeks to eliminate are abuses of employers against their
employees and not, as petitioners would have us believe, to prevent small-scale businesses from engaging in legitimate methods to
realize profit. Hence, the proviso is applicable only to the employees who are deemed "casuals" but not to the "project" employees nor
the regular employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment legally ends
upon completion of the project or the [end of the] season. The termination of their employment cannot and should not constitute an
illegal dismissal.

St. Paul College Quezon City vs. Spouses Ancheta

G.R. No. 169905, September 7, 2011

Facts:
Remigio Michael Ancheta was a full-time probationary teacher in the School Year 1996-1997 which was renewed in the following SY
1997-1998. His wife, Cynthia was hired as a part time teacher of the Mass Communication Department in the second semester of SY
1996-1997 and her appointment was renewed for SY 1997-1998. 

On February 13, 1998, respondents signified their intentions to renew their contracts for SY 1998-1999. They were later sent two
letters informing them that the school is extending to them new contracts for SY 1998-1999.

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Thereafter, a letter was written to Remigio Michael, enumerating the departmental and instructional policies that spouses failed to
comply with, such as the late submission of final grades, failure to submit final test questions to the Program Coordinator, the giving of
tests in the essay form instead of the multiple choice format as mandated by the school, failure to report to work on time; the high
number of students with failing grades in the classes that they handled, and not being open to suggestions to improve themselves as
teachers, among others.

Thereafter, Sr. Bernadette (Department Coordinator) endorsed the immediate termination of the teaching services of the spouses.
Respondent spouses were given an opportunity to comment on the letter-recommendation. Subsequently however, they received
their respective letters of termination. Thus, spouses filed a Complaint for illegal dismissal.

St. Paul contends that it did not extend the contracts of respondent spouses. Although, it has sent letters to the spouses informing
them that the school is extending to them new contracts for the coming school year, the letters do not constitute as actual
employment contracts but merely offers to teach on the said school year.

Issues: WON respondents were considered regular employees

WON they were illegally dismissed

Held:
(1) Employment on probationary status of teaching personnel is that they are not governed purely by the Labor Code. The
Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private
Schools. On the matter of probationary period, Section 92 of these regulations provides:

Section 92.Probationary Period. — Subject in all instances to compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the
elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine
(9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester
basis.

A probationary employee or probationer is one who is on trial for an employer, during which the latter determines whether or not he
is qualified for permanent employment. The probationary employment is intended to afford the employer an opportunity to observe
the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee.  
While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent
employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable
standards for permanent employment.  Thus, the word probationary, as used to describe the period of employment, implies the
purpose of the term or period, not its length.

The common practice is for the employer and the teacher to enter into a contract, effective for one school year.   At the end of the
school year, the employer has the option not to renew the contract, particularly considering the teacher's performance. If the contract
is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary
employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract.  If renewed, this
second renewal of the contract for another school year would then be the last year — since it would be the third school year — of
probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment
to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the
employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract
of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his
employment contract.

(2) No.
Section 91 of the Manual of Regulations for Private Schools, states that:

Section 91.Employment Contract. — Every contract of employment shall specify the designation, qualification, salary rate, the period
and nature of service and its date of effectivity, and such other terms and condition of employment as may be consistent with laws and
rules, regulations and standards of the school. A copy of the contract shall be furnished the personnel concerned.

It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its
precise duration could lead to the inference that the contract is binding for the full three-year probationary period. Therefore, the
letters sent by petitioner Sr. Bernadette, which were void of any specifics cannot be considered as contracts. The closest they can
resemble to are that of informal correspondence among the said individuals. As such, petitioner school has the right not to renew the
contracts of the respondents, the old ones having been expired at the end of their terms.

Assuming, arguendo, that the employment contracts between the school and the spouses were renewed, this Court finds that there
was a valid and just cause for their dismissal. The Labor Code commands that before an employer may legally dismiss an employee
from the service, the requirement of substantial and procedural due process must be complied with. Under the requirement of
substantial due process, the grounds for termination of employment must be based on just or authorized causes.

Of the charges against Remigio Michael, his spouse also shared the same defenses and admissions as to the charges against her.
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The plain admissions of the charges against them were the considerations taken into account by the petitioner school in their decision
not to renew the respondent spouses' employment contracts. This is a right of the school that is mandated by law and jurisprudence.
It is the prerogative of the school to set high standards of efficiency for its teachers since quality education is a mandate of the
Constitution. As long as the standards fixed are reasonable and not arbitrary, courts are not at liberty to set them aside. Schools
cannot be required to adopt standards which barely satisfy criteria set for government recognition.  The same academic freedom
grants the school the autonomy to decide for itself the terms and conditions for hiring its teacher, subject of course to the overarching
limitations under the Labor Code. The authority to hire is likewise covered and protected by its management prerogative — the right
of an employer to regulate all aspects of employment, such as hiring, the freedom to prescribe work assignments, working methods,
process to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and
recall of workers.

Lanvyl Fishing Enterprises, Inc. vs. Ariola et. al.

G.R. No. 181974, February 1, 2012

Facts:
Petitioner Lynvil Fishing Enterprises, Inc. (Lynvil) is engaged in deep-sea fishing. Respondents’ services were engaged in various
capacities: Andres G. Ariola, captain; Jessie D. Alcovendas, chief mate; Jimmy B. Calinao, chief engineer; Ismael G. Nubla, cook; Elorde
Bañ ez, oiler; and Leopoldo G. Sebullen, bodegero.

On Aug. 1, 1998, Lynvil received a report from Ramonito Clarido, one of its employees, that on July 31, 1998, he witnessed that while
on board the company vessel Analyn VIII, respondents conspired with one another and stole eight tubs of “pampano” and “tangigue”
fish and delivered them to another vessel.

Petitioner filed a criminal complaint against respondents before the office of the City Prosecutor of Malabon City which found
probable cause for indictment of respondents for the crime of qualified theft. Relying on the finding and Nasipit Lumber Company v.
NLRC, 257 Phil. 937 (1989), Lynvil asserted there was sufficient basis for valid termination of employment of respondents based on
serious misconduct and/or loss of trust and confidence.

Issues: Whether a finding of the city prosecutor of probable cause to indict employees of qualified theft is sufficient basis for valid
termination for serious misconduct and/or loss of trust or confidence

Whether the employees were validly terminated

Held:
On the first issue, the Supreme Court ruled in the negative. We ruled that proof beyond reasonable doubt of an employee’s misconduct
is not required when loss of confidence is the ground for dismissal. It is sufficient if the employer has “some basis” to lose confidence
or that the employer has reasonable ground to believe or to entertain the moral conviction that the employee concerned is
responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of the trust and
confidence demanded by his position.

Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft the Labor Arbiter must follow the finding as
a valid reason for the termination of respondents’ employment. The proof required for purposes that differ from one and the other are
likewise different.

(2) On the second question, the Court stated that nonetheless, even without reliance on the prosecutor’s finding, we find that
there was valid cause for respondents’ dismissal.

Just cause is required for a valid dismissal.  The Labor Code provides that an employer may terminate an employment based on fraud
or willful breach of the trust reposed on the employee.  Such breach is considered willful if it is done intentionally, knowingly, and
purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must
also be based on substantial evidence and not on the employer’s whims or caprices or suspicions otherwise, the employee would
eternally remain at the mercy of the employer. Loss of confidence must not be indiscriminately used as a shield by the employer
against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer. In
addition, loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a
position of responsibility, trust and confidence or that the employee concerned is entrusted with confidence with respect to delicate
matters, such as the handling or care and protection of the property and assets of the employer. The betrayal of this trust is the
essence of the offense for which an employee is penalized. Breach of trust is present in this case.

However, Lynvil contends that it cannot be guilty of illegal dismissal because the private respondents were employed under a fixed-
term contract which expired at the end of the voyage. Contrarily, the private respondents (employees) contend that they became
regular employees by reason of their continuous hiring and performance of tasks necessary and desirable in the usual trade and
business of Lynvil.

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Jurisprudence, laid two conditions for the validity of a fixed-contract agreement between the employer and employee: first, the fixed
period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure
being brought to bear upon the employee and absent any other circumstances vitiating his consent; or second, it satisfactorily appears
that the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the
former or the latter.

In the context of the facts that:  (1) the respondents were doing tasks necessarily to Lynvil’s fishing business with positions ranging
from captain of the vessel to bodegero; (2) after the end of a trip, they will again be hired for another trip with new contracts; and (3)
this arrangement continued for more than ten years, the clear intention is to go around the security of tenure of the respondents as
regular employees.  And respondents are so by the express provisions of the second paragraph of Article 280, thus: xxx Provided, That
any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

Having found that respondents are regular employees who may be, however, dismissed for cause as we have so found in this case,
there is a need to look into the procedural requirement of due process in Section 2, Rule XXIII, Book V of the Rules Implementing the
Labor Code.  It is required that the employer furnish the employee with two written notices:  (1) a written notice served on the
employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to
explain his side; and (2) a written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination. In this case, it is clear that the employees were not given the
final written notices of dismissal.

The Court ruled that since employees were dismissed for just cause, they were not entitle to separation pay and backwages. However,
they were to be granted nominal damages for failure of the employer to comply with statutory due process.

D.M. Consunji, Inc. vs. Jasmin

GR NO 912594, April 18, 2012

Facts:
On December 17, 1968, petitioner D.M. Consunji, Inc. (DMCI), a construction company, hired respondent Estelito L. Jamin as a laborer.
Sometime in 1975, Jamin became a helper carpenter. Since his initial hiring, Jamin’s employment contract had been renewed a
number of times. On March 20, 1999, his work at DMCI was terminated due to the completion of the SM Manila project. This
termination marked the end of his employment with DMCI as he was not rehired again.

On April 5, 1999, Jamin filed a complaint for illegal dismissal, with several money claims (including attorney’s fees), against DMCI and
its President/General Manager, David M. Consunji. Jamin alleged that DMCI terminated his employment without a just and authorized
cause at a time when he was already 55 years old and had no independent source of livelihood. He claimed that he rendered service to
DMCI continuously for almost 31 years. In addition to the schedule of projects (where he was assigned) submitted by DMCI to the
labor arbiter, he alleged that he worked for three other DMCI projects: Twin Towers, Ritz Towers, from July 29, 1980 to June 12, 1982;
New Istana Project, B.S.B. Brunei, from June 23, 1982 to February 16, 1984; and New Istana Project, B.S.B. Brunei, from January 24,
1986 to May 25, 1986.

DMCI denied liability. It argued that it hired Jamin on a project-to-project basis, from the start of his engagement in 1968 until the
completion of its SM Manila project on March 20, 1999 where Jamin last worked. With the completion of the project, it terminated
Jamin’s employment. It alleged that it submitted a report to the Department of Labor and Employment (DOLE) everytime it
terminated Jamin’s services.

Issue: Whether there was violation of security of tenure.

Held:
Jamin worked for DMCI for almost 31 years, initially as a laborer and, for the most part, as a carpenter. Through all those years, DMCI
treated him as a project employee, so that he never obtained tenure. On the surface and at first glance, DMCI appears to be correct.
Jamin entered into a contract of employment (actually an appointment paper to which he signified his conformity) with DMCI either
as a field worker, a temporary worker, a casual employee, or a project employee everytime DMCI needed his services and a
termination of employment paper was served on him upon completion of every project or phase of the project where he worked.

The CA pierced the cover of Jamin’s project employment contract and declared him a regular employee who had been dismissed
without cause and without notice. To reiterate, the CA’s findings were based on: (1) Jamin’s repeated and successive engagements in
DMCI’s construction projects, and (2) Jamin’s performance of activities necessary or desirable in DMCI’s usual trade or business.

We agree with the CA. In Liganza v. RBL Shipyard Corporation, the Court held that "[a]ssuming, without granting[,] that [the]
petitioner was initially hired for specific projects or undertakings, the repeated re-hiring and continuing need for his services for over
eight (8) years have undeniably made him a regular employee." We find the Liganza ruling squarely applicable to this case,
considering that for almost 31 years, DMCI had repeatedly, continuously and successively engaged Jamin’s services since he was hired
on December 17, 1968 or for a total of 38 times — 35 as shown by the schedule of projects submitted by DMCI to the labor arbiter and

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three more projects or engagements added by Jamin, which he claimed DMCI intentionally did not include in its schedule so as to
make it appear that there were wide gaps in his engagements.

We reviewed Jamin’s employment contracts as the CA did and we noted that while the contracts indeed show that Jamin had been
engaged as a project employee, there was an almost unbroken string of Jamin’s rehiring from December 17, 1968 up to the
termination of his employment on March 20, 1999. While the history of Jamin’s employment (schedule of projects) relied upon by
DMCI shows a gap of almost four years in his employment for the period between July 28, 1980 (the supposed completion date of the
Midtown Plaza project) and June 13, 1984 (the start of the IRRI Dorm IV project), the gap was caused by the company’s omission of
the three projects.

For not disclosing that there had been other projects where DMCI engaged his services, Jamin accuses the company of suppressing
vital evidence that supports his contention that he rendered service in the company’s construction projects continuously and
repeatedly for more than three decades. The non-disclosure might not have constituted suppression of evidence — it could just have
been overlooked by the company — but the oversight is unfair to Jamin as the non-inclusion of the three projects gives the impression
that there were substantial gaps not only of several months but years in his employment with DMCI.

To reiterate, Jamin’s employment history with DMCI stands out for his continuous, repeated and successive rehiring in the company’s
construction projects. In all the 38 projects where DMCI engaged Jamin’s services, the tasks he performed as a carpenter were
indisputably necessary and desirable in DMCI’s construction business. He might not have been a member of a work pool as DMCI
insisted that it does not maintain a work pool, but his continuous rehiring and the nature of his work unmistakably made him a
regular employee. In Maraguinot, Jr. v. NLRC, the Court held that once a project or work pool employee has been: (1) continuously, as
opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary
and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee.

Further, as we stressed in Liganza, "[r]espondent capitalizes on our ruling in D.M. Consunji, Inc. v. NLRC which reiterates the rule that
the length of service of a project employee is not the controlling test of employment tenure but whether or not ‘the employment has
been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee.’"

"Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital in determining if the employee was
hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the
employer. Here, [private] respondent had been a project employee several times over. His employment ceased to be coterminous with
specific projects when he was repeatedly re-hired due to the demands of petitioner’s business." Without doubt, Jamin’s case fits
squarely into the employment situation just quoted.

Gapayao vs. Fulo

G.R. No. 193493; June 13, 2013

Facts:
Jaime Fulo (deceased) died of "acute renal failure secondary to 1st degree burn 70% secondary electrocution" 5 while doing repairs at
the residence and business establishment of petitioner.

Thereafter, private respondent filed a claim for social security benefits with the Social Security System (SSS)–Sorosogon
Branch.8 However, upon verification and evaluation, it was discovered that the deceased was not a registered member of the SSS.

respondent filed a Petition before the SSC on 17 February 2003. In her Petition, she sought social security coverage and payment of
contributions in order to avail herself of the benefits accruing from the death of her husband.

On 6 May 2003, petitioner filed an Answer disclaiming any liability on the premise that the deceased was not the former’s
employee, but was rather an independent contractor whose tasks were not subject to petitioner’s control and supervision.

Issue: Won there exists between the deceased Jaime Fulo and petitioner an employer-employee relationship that would merit an
award of benefits in favor of private respondent under social security laws.

Held:
In asserting the existence of an employer-employee relationship, private respondent alleges that her late husband had been in the
employ of petitioner for 14 years, from 1983 to 1997. During that period, he was made to work as a laborer in the agricultural
landholdings, a harvester in the abaca plantation, and a repairman/utility worker in several business establishments owned
by petitioner.
Lastly, petitioner alleges that the deceased is a freelance worker. Since he was engaged on a pakyaw basis and worked for a short
period of time, in the nature of a farm worker every season, he was not precluded from working with other persons and in fact
worked for them. Under Article 280 of the Labor Code, seasonal employees are not covered by the definitions of regular and
casual employees.

Farm workers may be considered regular seasonal employees.

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Jurisprudence has identified the three types of employees mentioned in the provision: (1) regular employees or those who have been
engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer; (2) project
employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which
has been determined at the time of their engagement, or those whose work or service is seasonal in nature and is performed for the
duration of the season; and (3) casual employees or those who are neither regular nor project employees.

Farm workers generally fall under the definition of seasonal employees.

We have consistently held that seasonal employees may be considered as regular employees.

Regular seasonal employees are those called to work from time to time.
For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular
activity they perform and the usual trade or business of the employer.
Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists.

A reading of the records reveals that the deceased was indeed a farm worker who was in the regular employ of petitioner. From year
to year, starting January 1983 up until his death, the deceased had been working on petitioner’s land by harvesting abaca and
coconut, processing copra, and clearing weeds. His employment was continuous in the sense that it was done for more than one
harvesting season. Moreover, no amount of reasoning could detract from the fact that these tasks were necessary or desirable in the
usual business of petitioner.

Pakyaw workers are considered employees for as long as their employers exercise control over them

Concrete Solutions, Inc. et al. vs. Cabusas

G.R. No. 177812; June 19, 2013

Facts:
Respondent Arthur Cabusas (respondent) was hired by petitioner Primary Structures Corporation (PSC) as transit mixer driver for
petitioner Concrete Solutions Inc. (CSI) – Batching Plant Project.
The appointment letter stated:

xxx the status of his employment was that of a project employee and, as such, his employment was co-terminus with the
completion of the project or any phase thereof; that upon completion of the particular project or phase, he was free to seek
other employment of his choice; xxxx

He was accused of theft in the company, investigations were conducted, he sought assistance of counsel.

On June 12, 2001, petitioners, thru Manager Ardiente, sent respondent a termination letter 15 reading as follows:

Starting on May 6, 2001, you were absent from work without filing a Leave of Absence. A Notice of Abandonment was sent to you on
May 25, 2001 via telegram. Likewise, you were required to report or notify the company as soon as possible. However, two weeks
already elapsed from the time the notice was sent to you but you continued defying said request. Due to this, we are constrained to
TERMINATE your services effective on the date you abandoned your work with a strong belief that you are no longer interested to
come back to your work anymore.

Issue: WON there was valid termination.

Held:
It is well settled that in termination cases, the burden of proof rests upon the employer to show that the dismissal was for a just and
valid cause, and failure to discharge the same would mean that the dismissal is not justified and, therefore, illegal

To constitute abandonment, two elements must concur, to wit: (1) the failure to report for work or absence without valid or justifiable
reason; and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative
factor and being manifested by some overt acts.
Respondent explained that his absence from work was due to the fact that he and his counsel had asked and were waiting for
a copy of result of the investigation on his alleged act of theft or dishonesty conducted on May 4, 2001 but were not given at
all. We find his absence from work not sufficient to establish that he already had intention of abandoning his job. Besides, settled is the
rule that mere absence or failure to report for work is not tantamount to abandonment of work.

Reinstatement and backwages.

Petitioners contend that respondent was a project employee and the project to which he was hired was already completed, thus he
could not be reinstated anymore.

Considering that respondent was dismissed prior to the expiration of the duration of his employment and without a valid or just
cause, his termination was therefore illegal.

However, respondent could no longer be reinstated since the project he was assigned to was already completely finished. However, we find
that he is entitled to the salary corresponding to the unexpired portion of his employment.
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D.M. Consunji vs. Bello

G.R. No. 159371; July 19, 2013

Facts:
Bello brought a complaint for illegal dismissal and damages against DMCI and/or Rachel Consunji. He claimed that DMCI had
employed him as a mason without any interruption from February 1, 1990 until October 10, 1997 at an hourly rate of P25.081; that he
had been diagnosed to be suffering from pulmonary tuberculosis, thereby necessitating his leave of absence; that upon his recovery,
he had reported back to work, but DMCI had refused to accept him and had instead handed to him a termination paper that the cause
had not been explained to him.

DMCI’s projects had not yet been completed.

DMCI contended that Bello had only been a project employee, as borne out by his contract of employment and appointment
papersand that although his last project employment contract had been set to expire on October 7, 1997, he had tendered his
voluntary resignation on October 4, 1997 for health reasons that had rendered him incapable of performing his job, per his
resignation letter.

Issues:
1. WHETHER OR NOT PRIVATE RESPONDENT WAS A REGULAR EMPLOYEE; AND
2. WHETHER OR NOT PRIVATE RESPONDENT WAS DISMISSED OR VOLUNTARILY RESIGNED.

Held:
In the context of the law, Bello was a project employee of DMCI at the beginning of their employer-employee relationship. The project
employment contract they then entered into clearly gave notice to him at the time of his engagement about his employment being for
a specific project or phase of work. He was also thereby notified of the duration of the project, and the determinable completion date
of the project.

However, the history of Bello’s appointment and employment showed that he performed his tasks as a mason in DMCI’s various
constructions projects, Tthus, Bello acquired in time the status of a regular employee by virtue of his continuous work as a mason of
DMCI.

It is settled that the extension of the employment of a project employee long after the supposed project has been completed
removes the employee from the scope of a project employee and makes him a regular employee.  In this regard, the length of
time of the employee’s service, while not a controlling determinant of project employment, is a strong factor in determining whether
he was hired for a specific undertaking or in fact tasked to perform functions vital, necessary and indispensable to the usual business
or trade of the employer.1

Voluntary resignation
Yet, even had the letter been actually signed by him, the voluntariness of the resignation could not be assumed from such fact alone.
His claim that he had been led to believe that the letter would serve only as the means of extending his sick leave from work should
have alerted DMCI to the task of proving the voluntariness of the resignation.
Under the circumstances, DMCI became burdened with the obligation to prove the due execution and genuineness of the document as
a letter of resignation, which it failed to prove.

Colegio del Santisimo Rosario et al. vs. Rojo

G.R. No. 170388; September 4, 2013

Facts:
Petitioner Colegio del Santisimo Rosario (CSR) hired respondent as a high school teacher on probationary basis for the school years
1992-1993, 1993-19947 and 1994-1995. On April 5, 1995, CSR, through petitioner Sr. Zenaida S. Mofada, OP (Mofada), decided not to
renew respondent’s services.

Respondent filed a Complaint for illegal dismissal. He alleged that since he had served three consecutive school years which is the
maximum number of terms allowed for probationary employment, he should be extended permanent employment. Citing paragraph
75 of the 1970 Manual of Regulations for Private Schools (1970 Manual), respondent asserted that "full- time teachers who have
rendered three (3) consecutive years of satisfactory services shall be considered permanent."

Petitioners maintain that upon the expiration of the probationary period, both the school and the respondent were free to renew the
contract or let it lapse. Petitioners insist that a teacher hired for three consecutive years as a probationary employee does not
automatically become a regular employee upon completion of his third year of probation. It is the positive act of the school – the
hiring of the teacher who has just completed three consecutive years of employment on probation for the next school year – that
makes the teacher a regular employee of the school.

Held:
In Mercado v. AMA Computer College-Parañ aque City, Inc., we had occasion to rule that cases dealing with employment on
probationary status of teaching personnel are not governed solely by the Labor Code as the law is supplemented, with respect to the
period of probation, by special rules found in the Manual of Regulations for Private Schools (the Manual).

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With regard to the probationary period, Section 92 of the 1992 Manual provides:

Section 92. Probationary Period. – Subject in all instances to compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the
elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine
(9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester
basis.

In this case, petitioners’ teachers who were on probationary employment were made to enter into a contract effective for one school
year. Thereafter, it may be renewed for another school year, and the probationary employment continues. At the end of the second
fixed period of probationary employment, the contract may again be renewed for the last time.

Such employment for fixed terms during the teachers’ probationary period is an accepted practice in the teaching profession.

That teachers on probationary employment also enjoy the protection afforded by Article 281 of the Labor Code is supported by
Section 93 of the 1992 Manual which provides:

Sec. 93. Regular or Permanent Status. - Those who have served the probationary period shall be made regular or permanent. Full-time
teachers who have satisfactorily completed their probationary period shall be considered regular or permanent.

The above provision clearly provides that full-time teachers become regular or permanent employees once they have satisfactorily
completed the probationary period of three school years. The use of the term satisfactorily necessarily connotes the requirement for
schools to set reasonable standards to be followed by teachers on probationary employment. For how else can one determine if
probationary teachers have satisfactorily completed the probationary period if standards therefor are not provided?
As such, "no vested right to a permanent appointment shall accrue until the employee has completed the prerequisite three-year
period necessary for the acquisition of a permanent status. [However, it must be emphasized that] mere rendition of service for three
consecutive years does not automatically ripen into a permanent appointment. It is also necessary that the employee be a full-time
teacher, and that the services he rendered are satisfactory.

However, for teachers on probationary employment, in which case a fixed term contract is not specifically used for the fixed term it
offers, it is incumbent upon the school to have not only set reasonable standards to be followed by said teachers in determining
qualification for regular employment, the same must have also been communicated to the teachers at the start of the probationary
period, or at the very least, at the start of the period when they were to be applied. These terms, in addition to those expressly
provided by the Labor Code, would serve as the just cause for the termination of the probationary contract.

In this case, glaringly absent from petitioners’ evidence are the reasonable standards that respondent was expected to meet that could
have served as proper guidelines for purposes of evaluating his performance. Nowhere in the Teacher’s Contract could such standards
be found. Neither was it mentioned that the same were ever conveyed to respondent. Even assuming that respondent failed to meet
the standards set forth by CSR and made known to the former at the time he was engaged as a teacher on probationary status, still, the
termination was flawed for failure to give the required notice to respondent.

Herrera-Manaois vs. St. Scholasticas College

G.R. No. 188914; December 11, 2013

Facts:
SSC, situated in the City of Manila, is a private educational institution offering elementary, secondary, and tertiary education. Manaois
graduated from SSC in October 1992 with a degree in Bachelor of Arts in English. In 1994, she returned to her alma mater as a part-
time English teacher. After taking a leave of absence for one year, she was again rehired by SSC for the same position. Four years into
the service, she was later on recommended by her Department Chairperson to become a full-time faculty member of the English
Department.

Manaois thus applied for a position as full-time instructor for school year 2000-2001.
She mentioned in her application letter that she had been taking the course Master of Arts in English Studies, Major in Creative
Writing, at the University of the Philippines, Diliman (UP); that she was completing her master's thesis; and that her oral defense was
scheduled for June 2000. In a reply letter 4 dated 17 April 2000, the Dean of Arts and Sciences informed her of the SSC Administrative
Council's approval of her application. SSC hired her as a probationary full-time faculty member with the assigned task of instructor for
the school year 2000-2001. Her probationary employment continued for a total of three consecutive years.
Because of the forthcoming completion of her third year of probationary employment, Manaois wrote the Dean of Arts and Sciences
requesting an extension of her teaching load for the school year 2003-2004. Manaois eventually received a letter from the Dean of
College and Chairperson of the Promotions and Permanency Board officially informing her of the board's decision not to renew her
contract.

Issue: Whether the completion of a master's degree is required in order for a tertiary level educator to earn the status of permanency
in a private educational institution.

Held:

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Probationary employment refers to the trial stage or period during which the employer examines the competency and qualifications
of job applicants, and determines whether they are qualified to be extended permanent employment status. Such an arrangement
affords an employer the opportunity — before the full force of the guarantee of security of tenure comes into play — to fully
scrutinize and observe the fitness and worth of probationers while on the job and to determine whether they would become proper
and efficient employees. It also gives the probationers the chance to prove to the employer that they possess the necessary qualities
and qualifications to meet reasonable standards for permanent employment.

Viewed next to the statements and actions of Manaois — i.e., the references to obtaining a master's degree in her application letter, in
the subsequent correspondences between her and SSC, and in the letter seeking the extension of a teaching load for the school year
2003-2004; and her submission of certifications from UP and from her thesis adviser — we find that there is indeed substantial
evidence proving that she knew about the necessary academic qualifications to obtain the status of permanency.

At this juncture, we reiterate the rule that mere completion of the three-year probation, even with an above-average performance,
does not guarantee that the employee will automatically acquire a permanent employment status. It is settled jurisprudence that the
probationer can only qualify upon fulfillment of the reasonable standards set for permanent employment as a member of the teaching
personnel.

Thus, pursuant to the 1992 Manual, private educational institutions in the tertiary level may extend "full-time faculty" status only to
those who possess, inter alia, a master's degree in the field of study that will be taught. This minimum requirement is neither subject
to the prerogative of the school nor to the agreement between the parties. For all intents and purposes, this qualification must be
deemed impliedly written in the employment contracts between private educational institutions and prospective faculty members.
The issue of whether probationers were informed of this academic requirement before they were engaged as probationary employees
is thus no longer material, as those who are seeking to be educators are presumed to know these mandated qualifications. In the light
of the failure of Manaois to satisfy the academic requirements for the position, she may only be considered as a part-time instructor
pursuant to Section 45 of the 1992 Manual.

Universal Robina Sugar Milling Corp. vs. Acibo et al.

G.R No. 186439; January 15, 2014

Facts:
URSUMCO is a domestic corporation engaged in the sugar cane milling business; Cabati is URSUMCO's Business Unit General Manager.
The complainants were employees of URSUMCO. They were hired on various dates (between February 1988 and April 1996) and on
different capacities, 8 i.e., drivers, crane operators, bucket hookers, welders, mechanics, laboratory attendants and aides, steel
workers, laborers, carpenters and masons, among others. At the start of their respective engagements, the complainants signed
contracts of employment for a period of one (1) month or for a given season. URSUMCO repeatedly hired the complainants to perform
the same duties and, for every engagement, required the latter to sign new employment contracts for the same duration of one month
or a given season.
The complainants filed before the LA complaints for regularization, entitlement to the benefits under the existing Collective
Bargaining Agreement (CBA), and attorney's fees.

Issue: Whether or not respondents are regular employees of URSUMCO

Held:
We find the respondents to be regular seasonal employees of URSUMCO.
Seasonal employment operates much in the same way as project employment, albeit it involves work or service that is seasonal in
nature or lasting for the duration of the season. As with project employment, although the seasonal employment arrangement
involves work that is seasonal or periodic in nature, the employment itself is not automatically considered seasonal so as to prevent
the employee from attaining regular status. To exclude the asserted "seasonal" employee from those classified as regular employees,
the employer must show that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he had been
employed for the duration of the season. Hence, when the "seasonal" workers are continuously and repeatedly hired to perform the
same tasks or activities for several seasons or even after the cessation of the season, this length of time may likewise serve as badge of
regular employment. In fact, even though denominated as "seasonal workers," if these workers are called to work from time to time
and are only temporarily laid off during the off-season, the law does not consider them separated from the service during the off-
season period. The law simply considers these seasonal workers on leave until re-employed.

The nature of the employment depends on the nature of the activities to be performed by the employee, considering the nature of the
employer's business, the duration and scope to be done, and, in some cases, even the length of time of the performance and its
continued existence. In light of the above legal parameters laid down by the law and applicable jurisprudence, the respondents are
neither project, seasonal nor fixed-term employees, but regular seasonal workers of URSUMCO.

(1) The respondents were made to perform various tasks that did not at all pertain to any specific phase of URSUMCO's strict
milling operations that would ultimately cease upon completion of a particular phase in the milling of sugar; rather, they
were tasked to perform duties regularly and habitually needed in URSUMCO's operations during the milling season.
(2) The respondents were regularly and repeatedly hired to perform the same tasks year after year.

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Noblejas vs. Italian Maritime Academy Phils

GR No. 207888, June 9, 2014

FACTS:

A. The Parties to the Case

Petitioner Dionarto Q. Noblejas (Noblejas) filed a complaint for illegal dismissal, tax refund, moral and exemplary damages, non-
payment of 13th month pay, food, gasoline and schooling allowances, health insurance, monetized leave, and attorney’s fees, against
Italian Maritime Academy Phils., Inc. (IMAPI), Capt. Nicolo S. Terrei (Capt. Terrei), Raceli S. Ferrez (Ferrez), and Ma. Teresa R.
Mendoza (Mendoza).

IMAPI was a training center for seamen and an assessment center for determination of the qualifications and competency of seamen
and officers for possible promotion. Capt. Terrei was the Managing Director of IMAPI while Ferrez was his secretary. Mendoza was the
company’s Administrative Manager.

B. The Conflict

Record shows that Procerfina SA. Terrei, IMAPI President, wrote a letter3 to Noblejas informing him that he had been appointed as
training instructor/assessor of the company on a contractual basis for a period of three (3) months effective May 20, 2009, with a
monthly salary of 75,000.00 inclusive of tax. After the expiration of the 3-month period, IMAPI hired Noblejas anew as training
instructor/assessor with the same salary rate, but no written contract was drawn for his rehiring.4

The absence of a written contract to cover the renewal of his employment became Noblejas’ major concern. To address all his
apprehensions, he wrote Capt. Terrei a letter, dated March 9, 2010, requesting that a new contract be executed to reflect the following
provisions that they had allegedly agreed upon during their conversation on May 19, 2009, to wit: 1] that his monthly salary would
be ?75,000.00, tax excluded, and that 50% of his SSS premium would be shouldered by the company; and 2] that after the completion
of his 3-month contract, he would be given the option to choose either - a) to be regularly employed as an instructor of IMAPI; or b) to
go on board a vessel with the company extending him financial aid for the processing of pertinent documents, which amount would be
later on deducted from his salary. Likewise in the same letter, Noblejas intimated that he was electing to continue working for the
company as its regular instructor.

Noblejas averred that the company did not act on his letter-request, so he sought an audience with Capt. Terrei on March 16, 2010.
During the meeting, an altercation between them ensued. He claimed that after that incident, Capt. Terrei instructed Ferrez to dismiss
him from employment. He claimed that when he asked from Ferrez for a copy of his old contract, she allegedly replied, “No, you better
pack up all your things now and go, you are now dismissed and you are no longer part in this office – clearly, you are terminated from
this day on.”5

ISSUES:
A. WON he was a regular employee
B. WON he was illegally dismissed
HELD:
1. Yes, Noblejas is a regular employee of IMAPI.

Pursuant to Article 280 of the Labor Code, there are two kinds of regular employees, namely:

(1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer; and

(2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which
they are employed.13
Regular employees are further classified into:
(1) regular employees - by nature of work and
(2) regular employees - by years of service.14
The regular employees by nature of work refers to those employees who perform a particular function which is necessary or
desirable in the usual business or trade of the employer, regardless of their length of service; while regular employees by years of
service refers to those employees who have been performing the job, regardless of its nature thereof, for at least a year.15

In the case at bench, Noblejas was employed by IMAPI as a training instructor/assessor for a period of three (3) months effective May
20, 2009. After the end of the 3-month period, he was rehired by IMAPI for the same position and continued to work as such until
March 16, 2010. There is no dispute that the work of Noblejas was necessary or desirable in the business or trade of IMAPI, a training
and assessment center for seamen and officers of vessels. Moreover, such continuing need for his services is sufficient evidence of the
necessity and indispensability of his services to IMAPI’s business. Taken in this light, Noblejas had indeed attained the status of a
regular employee at the time he ceased to report for work on March 17, 2010.
2. No illegal dismissal because no substantial evidence was furnished by the employee.

Fair evidentiary rule dictates that before employers are burdened to prove that they did not commit illegal dismissal, it is incumbent
upon the employee to first establish by substantial evidence the fact of his or her dismissal.16

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Aside from his mere assertion, no corroborative and competent evidence was adduced by Noblejas to substantiate his claim that he
was dismissed from employment. The record is bereft of any indication that he was prevented from returning to work or otherwise
deprived of any work assignment. It is also noted that no evidence was submitted to show that respondent Ferrez, the secretary of
Capt. Terrei, was actually authorized by IMAPI to terminate the employment of the company’s employees or that Ferrez was indeed
instructed by Capt. Terrei to dismiss him from employment.

The Court finds it odd that, instead of clarifying from Capt. Terrei what he heard from Ferrez, Noblejas immediately instituted an
illegal dismissal case against the respondents the day following the alleged incident and never reported back for work since then.
Respondents’ refusal to grant complainant’s demands does not constitute an overt act of dismissal.
Let it be underscored that the fact of dismissal must be established by positive and overt acts of an employer indicating the intention
to dismiss.21 Indeed, a party alleging a critical fact must support his allegation with substantial evidence, for any decision based on
unsubstantiated allegation cannot stand without offending due process.22 Here, there is no sufficient proof showing that Noblejas
was actually laid off from work. In any event, his filing of a complaint for illegal dismissal, irrespective of whether reinstatement or
separation pay was prayed for, could not by itself be the sole consideration in determining whether he has been illegally dismissed. All
circumstances surrounding the alleged termination should also be taken into account.

Omni Hauling Services Inc v Tortoles

GR No. 199388, September 3, 2014

Facts:
Petitioner Omni Hauling Services, was awarded a one (1) year service contract by the local government of Quezon City to provide
garbage hauling services for the period July 1, 2002 to June 30, 2003. For this purpose, Omni hired respondents as garbage truck
drivers who were then paid on a per trip basis.

When the service contract was renewed for another year, July 1, 2003 to June 30, 2004, petitioners required each of the respondents
to sign employment contracts which provided that they will be “re-hired” only for the duration of the same period. However,
respondents refused to sign the employment contracts, claiming that they were regular employees since they were engaged to
perform activities which were necessary and desirable to Omni’s usual business or trade. For this reason, Omni terminated the
employment of respondents which, in turn, resulted in the filing of cases for illegal dismissal, nonpayment of Emergency Cost of Living
Allowance (ECOLA) and 13th month pay, and actual, moral, and exemplary damages.

During the mandatory conference before the Labor Arbiter (LA), Omni offered to re-employ respondents on the condition that they
sign the employment contracts but respondents refused such offer.

ISSUE: Whether or not respondents were project employees?

HELD: No, respondents are not project employees, but regular employees. Employers claiming that their workers are project
employees should not only prove that the duration and scope of the employment was specified at the time they were engaged, but
also that there was indeed a project. Respondents were not clearly and knowingly informed of their employment status as mere
project employees, with the duration and scope of the project specified at the time they were engaged. As such, the presumption of
regular employment should be accorded in their favor pursuant to Article 280 of the Labor
Code which provides that “[employees] who have rendered at least one year of service, whether such service is continuous or broken
shall be considered as [regular employees with respect to the activity in which they are employed and their employment shall
continue while such activity actually exists.”.

Hacienda Ledd vs. Villegas

GR No. 179654, Sept. 22, 2014

FACTS:
Villegas is an employee at the Hacienda Leddy as early as 1960, when it was still named Hacienda Teresa. Later on named Hacienda
Leddy owned by Ricardo Gamboa Sr., the same was succeeded by his son Ricardo Gamboa, Jr. During his employment up to the time of
his dismissal, Villegas performed sugar farming job 8 hours a day, 6 days a week work, continuously for not less than 302 days a year,
and for which services he was paid P45.00 per day. He likewise worked in petitioner's coconut lumber business where he was paid
P34.00 a day for 8 hours work.

On June 9, 1993, Gamboa went to Villegas' house and told him that his services were no longer needed without prior notice or valid
reason. Hence, Villegas filed the instant complaint for illegal dismissal.

ISSUE:
Whether or not herein respondent classified as regular employee and thus entitled to security of tenure under Article 279?

RULING:
Respondent is a regular employee entitled to security of tenure.
The Labor Code draws a fine line between regular and casual employees to protect the interests of labor.
Villegas is entitled to security of tenure under Article 279 of the Labor Code and can only be removed for cause. We found no valid
cause attending to his dismissal and found also that his dismissal was without due process. Article 277(b) of the Labor Code provides
that: Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a
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just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall
furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if
he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor
and Employment.
The failure of the petitioner to comply with these procedural guidelines renders its dismissal of Villegas illegal. An illegally dismissed
employee should be entitled to either reinstatement if viable, or separation pay if reinstatement is no longer viable, plus backwages in
either instance. Considering that reinstatement is no longer feasible because of strained relations between the employee and the
employer, separation pay should be granted.

IV. MANAGEMENT PREROGATIVE

Dosch vs. NLRC

G.R. No. L-51182. July 5, 1983

Facts:
Helmut Dosch, an American citizen, married to a Filipina, was the resident Manager of Northwest Airlines, Inc. in the Philippines. He
has to his credit 11 years of continuous service with the company, including 9 years as Northwest Manager with station at Manila. He
received an inter-office communication from R.C. Jenkins, Northwest's Vice President for Orient Region based in Tokyo, promoting
him to the position of Director of International Sales and transferring him to Northwest's General Office in Minneapolis, U.S.A.,
effective immediately.

Dosch in his letter, expressed appreciation for the promotion and at the same time regretted that "for personal reasons and reasons
involving his family, he is unable to accept a transfer from the Philippines and that he would, therefore, prefer to remain in his
position, of Manager-Philippines until such time that his services in that capacity are no longer required by the company. Petitioner
tried to resume his duties as Manager after an authorized vacation but the Vice-President for the Orient Region of Northwest advised
petitioner that in view of his letter, his status as an employee of the company ceased on the close of business and the company therefore
considers his letter to be a resignation without notice.

Issue: Whether or not the employer’s letter constitute a transfer as a valid exercise of a management prerogative.

Held:

No. The Supreme Court treats the Jenkins letter as directing the promotion of the petitioner from his position as Philippine manager
to Director of International Sales in Minneapolis, U.S.A. It is not merely a transfer order but "it is more in the nature of a promotion
that a transfer, the latter being merely incidental to such promotion." The inter-office communication of Vice President Jenkins is
captioned "Transfer" but it is basically and essentially a promotion for the nature of an instrument is characterized not by the title
given to it but by its body and contents. The communication informed the petitioner that effective August 18, 1975, he was to be
promoted to the position of Director of International Sales, and his compensation would be upgraded and the payroll accordingly
adjusted. Petitioner was, therefore, advanced to a higher position and rank and his salary was increased and that is a promotion.

There is no law that compels an employee to accept a promotion, as a promotion is in the nature of a gift or a reward, which a person
has a right to refuse. When petitioner refused to accept his promotion to Director of International Sales, he was exercising a right and
he cannot be punished for it as qui jure suo utitur neminem laedit. He who uses his own legal right injures no one. While it may be
true that the right to transfer or reassign an employee is an employer's exclusive right and the prerogative of management, such right
is not absolute. The right of an employer to freely select or discharge his employee is limited by the paramount police power for the
relations between capital and labor are not merely contractual but impressed with public interest (Article 1700, New Civil Code). And
neither capital nor labor shall act oppressively against each other. The Court did not agree to Northwest's submission that petitioner
was guilty of disobedience and insubordination which respondent Commission sustained. Petitioners acknowledgment of his
promotion and the way he expressed his desire to remain in his position in the Philippines for reasons involving his family, the Court
could not discern even the slightest hint of defiance, much less imply insubordination on the part of petitioner.

The Court emphasized the long and faithful years of service that petitioner had rendered to respondent company, eleven good years,
nine of which as Manager with station at Manila. It is plainly abusive of the company and oppressive to the petitioner that the latter is
peremptorily dismissed on the shallow claim of "resignation without notice,". The Court ordered petitioner's reinstatement to his
former position with full backwages for three (3) years without loss of seniority rights and other benefits recognized by law, including
attorney's fees equivalent to 10% of the total monetary benefits which the petitioner may recover, and ordered petitioners
reinstatement.

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PT&T vs. Court of Appeals

G.R. No. 152057. September 29, 2003

Facts:
PT&T is a domestic corporation engaged in the business of providing telegraph and communication services thru its branches all over
the country. Sometime in 1997, after conducting several studies, PT and T came up with a Relocation and Restructuring Program that
aimed to (a) sustain its retail operations (b) decongest surplus workforce in some branches, to promote efficiency and productivity;
(c) lower expenses incidental to hiring and training new personnel; and (d) avoid retrenchment of employees occupying redundant
positions. The company offered relocation benefits/allowances to employees who would agree to be transferred to new PT and T
branches in the provinces. Moreover, employees who would agree to the transfer would be considered promoted.

In line with the petitioner’s program, seven employees were directed by the company to “relocate” to their new PT&T branches. The
seven employees however rejected the petitioner company’s offer on the reason that the said transfers involved distant places which
would require their separation from their families.
Due to the employee’s refusal, the company dismissed the seven employees on the ground that their refusal amounted to
insubordination and willful disobedience to a lawful order. As the seven employees were all members of a registered labor union,
their union in behalf of them, filed with the Labor Arbiter a complaint for unfair labor practice and illegal dismissal against PT&T.
The petitioner company’s defense was that the transfers were valid exercise of management prerogative. The Labor Arbiter dismissed
the complaint and upheld the company, but on appeal, the National Labor Relations Commission declared the employee’s dismissal as
illegal. The Court of Appeals affirmed the NLRC’s ruling.

Issue:
(1) Whether or not the transfers initiated by petitioner PT and T to its employees were in the nature of a promotion.
(2) Whether or not the dismissal of the employees was valid on the ground that there was insubordination and willful disobedience to
a lawful order.

Held:
(1) The employee’s transfers are promotions in nature even if they were not accompanied by an increase in salary.

It was petitioner company itself that admitted to this fact as was stated in their position paper submitted to the Labor Arbiter. With or
without a corresponding increase in salary, the respective transfers of the private respondents were in fact promotions, following the
ruling enunciated in Homeowners Savings and Loan Association, Inc. v. NLRC:

… [P]romotion, as we defined in Millares v, Subido, is “the advancement from one position to another with an increase in duties and
responsibilities as authorized by law, and usually accompanied by an increase in salary.” Apparently, the indispensable element for
there to be a promotion is that there must be“advancement from one position to another” or an upward vertical movement of the
employee’s rank or position.  Any increase in salary should only be considered incidental but never determinative of whether or not a
promotion is bestowed upon an employee.

(2) An employee cannot be promoted, even if merely as a result of transfer, without his consent. A transfer that results in promotion
or demotion, advancement or reduction or a transfer that aims to ‘lure the employee away from his permanent position cannot be
done without the employees’ consent.
There is no law that compels an employee to accept a promotion for the reason that a promotion is in the nature of a gift or reward,
which a person has a right to refuse. Hence, the exercise by the private respondents of their right cannot be considered in law as
insubordination, or willful disobedience of a lawful order of the employer.   As such, there was no valid cause for the private
respondents’ dismissal.
As the questioned dismissal is not based on any of the just or valid grounds under Article 282 of the Labor Code, the NLRC correctly
ordered the private respondents’ reinstatement without loss of seniority rights and the payment of back wages from the time of their
dismissal up to their actual reinstatement.

Mendoza vs. Rural Bank of Lucban

G.R. No. 155421, July 7, 2004

Facts:
On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board Resolution Nos. 99-52 and 99-53, ordering
the reshuffling of its and employees in line with the policy of the bank to familiarize bank employees with the various phases of bank
operations and further strengthen the existing internal control system.

In that Board resolution, Mendoza was assigned to Clerk-Meralco collection from the position of Appraiser. Petitioner in an undated
letter to the Bank’s Board Chairman stated that the transfer was in effect a demotion on his part without legal basis and is a blatant
harassment on from the employer as a prelude petitioners termination in due time. That it resulted to unfair labor practice.

The Board’s Chairman in his reply, only reiterated that the reason behind the resolution on the reshuffling of its employees was
merely familiarize bank employees with the various phases of bank operations and further strengthen the existing internal control
system.

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On June 7, 2009, petitioner in a letter applied for leave of absence due to an ailment good for ten days, and another was submitted for
30 days. Within this period, petitioner filed a complaint before Arbitration Branch No. IV of the National Labor Relations Commission
against the Rural Bank of Lucban for illegal dismissal, underpayment, separation pay and damages. The Labor Arbiter upheld
petitioner’s claims but then it was reversed by the NLRC on appeal. The Court of Appeals also found no grave abuse of discretion on
the part of the NLRC.

Issue: Whether or not the reshuffling or transfer is deemed to be a demotion on petitioner’s position.

Held:
Constructive dismissal is defined as an involuntary resignation resorted to when continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to the employee.

In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or
area of operation to another — provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the
action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause.
This privilege is inherent in the right of employers to control and manage their enterprise effectively. The right of employees to
security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to
change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective
bargaining agreements, and general principles of fair play and justice.

Management Prerogative to Transfer Employees. Jurisprudence recognizes the exercise of management prerogatives. For this reason,
courts often decline to interfere in legitimate business decisions of employers. Indeed, labor laws discourage interference in
employers’ judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the
right of employers. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees
from one office or area of operation to another -- provided there is no demotion in rank or diminution of salary, benefits, and other
privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion
without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. The
right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of
its prerogative to change their assignments or to transfer them.

Petitioner’s Transfer Lawful. Petitioner’s transfer was made in pursuit of respondent’s policy to “familiarize bank employees with the
various phases of bank operations and further strengthen the existing internal control system” of all officers and employees. We have
previously held that employees may be transferred -- based on their qualifications, aptitudes and competencies -- to positions in
which they can function with maximum benefit to the company. There appears no justification for denying an employer the right to
transfer employees to expand their competence and maximize their full potential for the advancement of the establishment. Petitioner
was not singled out; other employees were also reassigned without their express consent. Neither was there any demotion in the rank
of petitioner; or any diminution of his salary, privileges and other benefits. This fact is clear in respondent’s Board Resolutions, the
April 30, 1999 letter of Bank President Daya to Branch Manager Cada, and the May 10, 1999 letter of Daya to petitioner.

Duncan Association of Detailman vs. Glaxo Wellcome Phils.

G.R. 162994, September 17, 2004

Facts:
Petitioner Tecson was hired by respondent Glaxo Wellcome Phils. as a medical representative. Tecson signed a contract of
employment, which stipulates among others, that he agrees to disclose existing or future relationship with co-employees and
employees of competing companies that should such relationship poses a conflict of interest, to resign from the company. Despite
repeated warnings, Tecson and Bettsy, an employee of a competing company, got married. Glaxo transferred Tecson to Butuan, but he
defied such orders and continued acting as medical representative in Camarines area. The National Conciliation and Mediation board
rendered as valid the policy and the right to transfer.

Issue: Whether or not the policy constitutes a prohibition against marriage.

Held:
No.

Glaxo’s policy prohibiting an employee from having a relationship is a valid exercise of management prerogatives as relationships of
that nature might compromise the interests of the company. Glaxo has a right to guard its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information for competitors.

The right to protect its economic interests is recognized by the constitution which recognizes the right of enterprises to adopt and
enforce such a policy to protect its right to reasonable returns on investments and for expansion and growth. Indeed, while our laws
endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute
will be decided in favor of the workers.

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The law also recognized that management has rights which are also entitled to respect and enforcement in the interest of fair play.
The challenged company policy does not violate the equal protection clause of the constitution as such clause is addressed only to the
state or those acting under color of its authority.

The policy being questioned is not a policy against marriage. An employee of the company remains free to marry anyone of his or her
choosing. The policy is aimed at restricting a personal prerogative that belongs only to the individual. However, an employee’s
personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business
success.

PLDT vs. Paquio

G.R. No. 152689, October 12, 2005

Facts:
In 1994, PLDT assessed the performance of the 27 Exchanges comprising the GMM Network. Upon receipt of the ratings, Alfredo
Paguio, Head of the Garnet Exchange, sent a letter to his immediate supervisor and Asst. VP criticizing the PLDT criteria for
performance rating as unfair because they depended on manpower after receiving its appraisal rating. He also suggested that the
criteria failed to recognize that exchanges with new plants could easily meet the objectives of GMM compared to those with old plants.

Despite Paguio’s criticism, Garnet Exchange, the oldest plant in GMM, obtained the top rating in the GMM. Nevertheless, Paguio
reiterated his letter to Santos and objected to the performance rating as it was based only on the attainment of objectives, without
considering other relevant factors. Two years later on June 1996, PLDT rebalanced the manpower of the East Center. Paguio wrote
Santos and requested reconsideration of the manpower rebalancing, claiming it was unfair to Garnet Exchange because as the oldest
exchange in the East Center, it was disallowed to use contractors for new installations and was not made beneficiary of the cut-over
bonus.

He was then was reassigned as Head for Special Assignment at the Office of the GMM East Center and asked to turn over his functions
as Garnet Exchange Head to Tessie Go. Believing that his transfer was a disciplinary action, Paguio requested the first VP for a formal
hearing of the charges against him and asked that his reassignment be deferred. He also filed a complaint against his supervisor for
grave abuse of authority and manipulation of the East Center performance. Findings were that the memo was in order as it was based
on the finding that Paguio was not a team player and cannot accept decisions of management, which is short of insubordination. He
was then advised to transfer to any group in the company that may avail of his services. Likewise, another memo informed Paguio
that his transfer was not in the nature of a disciplinary action that required investigation and that he agreed with the reasons of the
transfer. Aggrieved, Paguio files a complaint for illegal dismissal with prayer for reinstatement and damages which was later amended
to illegal demotion with prayer for reversion to old position, damages and attorney’s fees.

Issue: Whether or not the transfer of Paguio is legal.

Held:
PLDT alleges that the NLRC ruling would allow a change of cause of action since the complaint alleged “illegal demotion” while the
decision involved “illegal transfer.” Prefatorily, we note from the records that there has been no change of cause of action from “illegal
demotion” to “illegal transfer.” Illegal demotion is a type of illegal transfer. Moreover, it is familiar and fundamental doctrine that it is
not the title of the action but the allegations in the pleading that determines the nature of the action. An employer is free to regulate,
according to his own discretion and judgment, all aspects of employment, including the transfer of employees. It is the employer’s
prerogative, based on its assessment and perception of its employees’ qualifications, aptitudes, and competence, to deploy its
employees in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the
company. An employee’s right to security of tenure does not give him such a vested right in his position as would deprive the
company of its prerogative to change his assignment or transfer him where he will be most useful.

Nonetheless, there are limits to the management prerogative. While it may be conceded that management is in the best position to
know its operational needs, the exercise of management prerogative cannot be utilized to circumvent the law and public policy on
labor and social justice. That prerogative accorded management should not defeat the very purpose for which our labor laws exist: to
balance the conflicting interests of labor and management. By its very nature, management prerogative must be exercised always
with the principles of fair play and justice. In particular, the employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and
other benefits. The employer bears the burden of proving that the transfer of the employee has complied with the foregoing test.

In the present case, we see no credible reason for Paguio’s transfer except his criticisms of the company’s performance evaluation
methods. Based on the undisputed facts, Garnet Exchange was doing well and excelled in the performance rating. In the same way,
Paguio’s performance was consistently rated as outstanding. There was also no proof that Paguio refused to comply with any
management policy. Patently, his transfer could not be due to poor performance. Neither was it because he was needed in the new
post for the new assignment was functionless and it was nothing but a title. Paguio’s transfer could only be caused by the
management’s negative reception of his comments. It is prejudicial to Paguio because it left him out for a possible promotion as he
was assigned to a functionless position with neither office nor staff.

Hence, transfer was not valid.

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Star Paper Corp., vs. Simbol

G.R. No. 164774, April 12, 2006

Facts:
Petitioner Star Paper Corporation is a corporation engaged in trading, principally of paper products. Josephine Ongsitco is its Manager
of the Personnel and Administration Department while Sebastian Chua is its Managing Director.

Respondents Ronaldo D. Simbol (Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all regular employees of the
company. Simbol was employed by the company on October 1993 and met Alma Dayrit, also an employee of the company, whom he
married on June 1998. Prior to the marriage, Ongsitco advised the couple that should they decide to get married, one of them should
resign pursuant to a company policy. Simbol resigned on June 20, 1998 pursuant to the company policy.

Comia was hired by the company on February 1997. She met Howard Comia, a co-employee, whom she married on June 1, 2000.
Ongsitco likewise reminded them that pursuant to company policy, one must resign should they decide to get married. Comia
resigned on June 30, 2000.

Estrella was hired on July 29, 1994. She met Luisito Zuñ iga (Zuñ iga), also a co-worker. Petitioners stated that Zuñ iga, a married man,
got Estrella pregnant. The company allegedly could have terminated her services due to immorality but she opted to resign on
December 21, 1999.

The respondents signed a Release and Confirmation Agreement and stated therein that they have no money and property
accountabilities in the company. Respondents offer a different version of their dismissal. Respondents later filed a complaint for
unfair labor practice, constructive dismissal, separation pay and attorney’s fees. They averred that the aforementioned company
policy is illegal and contravenes Article 136 of the Labor Code.

Labor Arbiter dismissed the complaint and states that the company policy was decreed pursuant to what the respondent corporation
perceived as management prerogative. On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter. In its
assailed Decision dated August 3, 2004, the Court of Appeals reversed the NLRC decision.

Issue: Whether such company policy violates the Labor Code.

Held:
Such policy violates the fundamental right of an employee. Art 136 of the Labor Code provides:

Art. 136. It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman
employee shall not get married, or to stipulate expressly or tacitly that upon getting married a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of
her marriage.

With more women entering the workforce, employers are also enacting employment policies specifically prohibiting spouses from
working for the same company. We note that two types of employment policies involve spouses: policies banning only spouses from
working in the same company (no-spouse employment policies), and those banning all immediate family members, including spouses,
from working in the same company (anti-nepotism employment policies).

It utilizes two theories of employment discrimination: the disparate treatment and the disparate impact. Under the disparate
treatment analysis, the plaintiff must prove that an employment policy is discriminatory on its face. No-spouse employment policies
requiring an employee of a particular sex to either quit, transfer, or be fired are facially discriminatory. On the other hand, to establish
disparate impact, the complainants must prove that a facially neutral policy has a disproportionate effect on a particular class.

Rivera vs. Solidbank

G.R. No. 163269, April 19, 2006

Facts:
Rivera started working with Solidbank Corporation as an audit clerk since July 1, 1977. Then he was promoted as credit investigator,
senior clerk, assistant accountant, and finally as assistant manager. Prior to his retirement, he became the Manager of the bank’s
Credit Investigation and Appraisal Division of the Consumer's Banking Group. In the meantime, Rivera and his brother-in-law put up a
poultry business in Cavite.

In December 1994, Solidbank offered two retirement programs to its employees: (a) the Ordinary Retirement Program (ORP), under
which an employee would receive 85% of his monthly basic salary multiplied by the number of years in service; and (b) the Special
Retirement Program (SRP), under which a retiring employee would receive 250% of the gross monthly salary multiplied by the
number of years in service. Rivera decided to devote his time and attention to his poultry business in Cavite and applied for
retirement under the SRP. Solidbank approved the application and confirmed his separation from Solidbank on February 25, 1995.
However, Solidbank required Rivera to sign an undated Release, Waiver and Quitclaim, which was notarized on March 1, 1995. He
acknowledged receipt of the net proceeds of his separation and retirement benefits and promised that "he would not, at any time, in
any manner whatsoever, directly or indirectly engage in any unlawful activity prejudicial to the interest of Solidbank, its parent,
affiliate or subsidiary companies, their stockholders, officers, directors, agents or employees, and their successors-in-interest and will
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not disclose any information concerning the business of Solidbank, its manner or operation, its plans, processes, or data of any kind."
He also signed in an Undertaking upon which he promised that "not to seek employment with a competitor bank or financial
institution within one (1) year from February 28, 1995, and that any breach of the Undertaking or the provisions of the Release,
Waiver and Quitclaim would entitle Solidbank to a cause of action against him before the appropriate courts of law”.

But on May 1, 1995, Rivera got employed with Equitable Banking Corporation (Equitable) as Manager of its Credit Investigation and
Appraisal Division of its Consumers' Banking Group. Upon learning this, Solidbank wrote a letter dated May 18, 1995, informing
Rivera that he had violated the Undertaking and demanded the return of all the monetary benefits he received in consideration of the
SRP within five (5) days from receipt; otherwise, appropriate legal action would be taken against him.

Issue: Whether the employment ban incorporated in the Undertaking which petitioner executed upon his retirement is unreasonable,
oppressive, hence, contrary to public policy.

Held:
The SC held that Article 1306 of the New Civil Code provides that the contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or
public policy. The freedom of contract is both a constitutional and statutory right. A contract is the law between the parties and
courts have no choice but to enforce such contract as long as it is not contrary to law, morals, good customs and against public policy.
The well-entrenched doctrine is that the law does not relieve a party from the effects of an unwise, foolish or disastrous contract,
entered into with full awareness of what he was doing and entered into and carried out in good faith. Such a contract will not be
discarded even if there was a mistake of law or fact. Courts have no jurisdiction to look into the wisdom of the contract entered into
by and between the parties or to render a decision different therefrom. They have no power to relieve parties from obligation
voluntarily assailed, simply because their contracts turned out to be disastrous deals.

In the present case, there is no factual basis to agree with the contention of the respondent bank. On the face of the Undertaking, the
post-retirement competitive employment ban is unreasonable because it has no geographical limits; respondent is barred from
accepting any kind of employment in any competitive bank within the proscribed period. Although the period of one year may appear
reasonable, the matter of whether the restriction is reasonable or unreasonable cannot be ascertained with finality solely from the
terms and conditions of the Undertaking, or even in tandem with the Release, Waiver and Quitclaim.

Undeniably, petitioner retired under the SRP and received P963,619.28 from respondent. However, petitioner is not proscribed, by
waiver or estoppel, from assailing the post-retirement competitive employment ban since under Article 1409 of the New Civil Code,
those contracts whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy are inexistent
or void from the beginning.

Respondent, as employer, is burdened to establish that a restrictive covenant barring an employee from accepting a competitive
employment after retirement or resignation is not an unreasonable or oppressive, or in undue or unreasonable restraint of trade,
thus, unenforceable for being repugnant to public policy. There are two principal grounds on which the doctrine is founded that a
contract in restraint of trade is void as against public policy. One is, the injury to the public by being deprived of the restricted party’s
industry; and the other is, the injury to the party himself by being precluded from pursuing his occupation, and thus being prevented
from supporting himself and his family.

In cases where an employee assails a contract containing a provision prohibiting him or her from accepting competitive employment
as against public policy, the employer has to adduce evidence to prove that the restriction is reasonable and not greater than
necessary to protect the employer’s legitimate business interests. The restraint may not be unduly harsh or oppressive in curtailing
the employee’s legitimate efforts to earn a livelihood and must be reasonable in light of sound public policy.
Courts should carefully scrutinize all contracts limiting a man’s natural right to follow any trade or profession anywhere he pleases
and in any lawful manner. But it is just as important to protect the enjoyment of an establishment in trade or profession, which its
employer has built up by his own honest application to every day duty and the faithful performance of the tasks which every day
imposes upon the ordinary man. What one creates by his own labor is his. Freedom to contract must not be unreasonably abridged.
Neither must the right to protect by reasonable restrictions that which a man by industry, skill and good judgment has built up, be
denied.

The Court reiterates that the determination of reasonableness is made on the particular facts and circumstances of each case. The
question of reasonableness of a restraint requires a thorough consideration of surrounding circumstances, including the subject
matter of the contract, the purpose to be served, the determination of the parties, the extent of the restraint and the specialization of
the business of the employer. The court has to consider whether its enforcement will be injurious to the public or cause undue
hardships to the employee, and whether the restraint imposed is greater than necessary to protect the employer.
Consideration must be given to the employee’s right to earn a living and to his ability to determine with certainty the area within
which his employment ban is restituted. A provision on territorial limitation is necessary to guide an employee of what constitutes as
violation of a restrictive covenant and whether the geographic scope is co-extensive with that in which the employer is doing
business. In considering a territorial restriction, the facts and circumstances surrounding the case must be considered.

Thus, in determining whether the contract is reasonable or not, the trial court should consider the following factors: (a) whether the
covenant protects a legitimate business interest of the employer; (b) whether the covenant creates an undue burden on the employee;
(c) whether the covenant is injurious to the public welfare; (d) whether the time and territorial limitations contained in the covenant
are reasonable; and (e) whether the restraint is reasonable from the standpoint of public policy.

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We are not impervious of the distinction between restrictive covenants barring an employee to accept a post-employment
competitive employment or restraint on trade in employment contracts and restraints on post-retirement competitive employment in
pension and retirement plans either incorporated in employment contracts or in collective bargaining agreements between the
employer and the union of employees, or separate from said contracts or collective bargaining agreements which provide that an
employee who accepts post retirement competitive employment will forfeit retirement and other benefits or will be obliged to
restitute the same to the employer. The strong weight of authority is that forfeitures for engaging in subsequent competitive
employment included in pension and retirement plans are valid even though unrestricted in time or geography.

A post-retirement competitive employment restriction is designed to protect the employer against competition by former employees
who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment.

Daisy B. Tiu vs.Platinum Plans Phil., Inc.

G.R. No. 163512 February 28, 2007

Facts:
Tiu was a division marketing director of Platinum plans, a domestic corp. engaged in the pre need- industry. Tiu was then rehired as
senior vice president and territorial operations head in charge of Hongkong and ASEAN operations. Respondent and petitioner agreed
on and executed a five year contract of employment, on of the salient features thereof being a non- involvement provision to the effect
that during the employee’s engagement, and two years after separation form the company, the employee will not engage in or be
involved with any corporation or entity whether directly or indirectly, which is engaged in the same business or belongs to the same
pre-need industry as the employee. Any breach of this provision by the employee will render him liable to the employer for liquidated
damages in the sum of P100.000.

On September 16 1995, petitioner stopped working for respondent. In November 1995, she became the Vice- president for sales of
another company engaged in the pre – need industry, the Professional Pension’s Plans, Inc. So, respondent filed a complaint for
damages against petitioner before the RTC of Pasig for violation of non- involvement clause in the contract of employment.

In response, petitioner argued that the non- involvement clause was unenforceable for being against public order and public policy
because first, it is a restraint much greater than what is necessary to afford respondent a fair and reasonable protection; Second,
respondent did not invest in petitioners training and improvement as at the time she was hired she already possessed the knowledge
and expertise required in the industry and respondent benefited tremendously from it; third, a strict application of the clause would
deprive her of the right to engage in the only work she knew.

Issue: Whether or not the said clause is valid.

Held:
As early as 1916, we already had the occasion to discuss the validity of a non-involvement clause. In Ferrazzini v. Gsell,  we said that
such clause was unreasonable restraint of trade and therefore against public policy. InFerrazzini, the employee was prohibited from
engaging in any business or occupation in the Philippines for a period of five years after the termination of his employment contract
and must first get the written permission of his employer if he were to do so. The Court ruled that while the stipulation was indeed
limited as to time and space, it was not limited as to trade. Such prohibition, in effect, forces an employee to leave the Philippines to
work should his employer refuse to give a written permission.
In G. Martini, Ltd. v. Glaiserman, we also declared a similar stipulation as void for being an unreasonable restraint of trade. There, the
employee was prohibited from engaging in any business similar to that of his employer for a period of one year. Since the employee
was employed only in connection with the purchase and export of abaca, among the many businesses of the employer, the Court
considered the restraint too broad since it effectively prevented the employee from working in any other business similar to his
employer even if his employment was limited only to one of its multifarious business activities.
However, in Del Castillo v. Richmond, we upheld a similar stipulation as legal, reasonable, and not contrary to public policy. In the said
case, the employee was restricted from opening, owning or having any connection with any other drugstore within a radius of four
miles from the employer’s place of business during the time the employer was operating his drugstore. We said that a contract in
restraint of trade is valid provided there is a limitation upon either time or place and the restraint upon one party is not greater than
the protection the other party requires.

Finally, in Consulta v. Court of Appeals, we considered a non-involvement clause in accordance with Article 1306 of the Civil Code.
While the complainant in that case was an independent agent and not an employee, she was prohibited for one year from engaging
directly or indirectly in activities of other companies that compete with the business of her principal. We noted therein that the
restriction did not prohibit the agent from engaging in any other business, or from being connected with any other company, for as
long as the business or company did not compete with the principal’s business. Further, the prohibition applied only for one year after
the termination of the agent’s contract and was therefore a reasonable restriction designed to prevent acts prejudicial to the
employer.

Conformably then with the aforementioned pronouncements, a non-involvement clause is not necessarily void for being in restraint
of trade as long as there are reasonable limitations as to time, trade, and place.

In this case, the non-involvement clause has a time limit: two years from the time petitioner’s employment with respondent ends. It is
also limited as to trade, since it only prohibits petitioner from engaging in any pre-need business akin to respondent’s.

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More significantly, since petitioner was the Senior Assistant Vice-President and Territorial Operations Head in charge of respondent’s
Hongkong and Asean operations, she had been privy to confidential and highly sensitive marketing strategies of respondent’s
business. To allow her to engage in a rival business soon after she leaves would make respondent’s trade secrets vulnerable especially
in a highly competitive marketing environment. In sum, we find the non-involvement clause not contrary to public welfare and not
greater than is necessary to afford a fair and reasonable protection to respondent.

In any event, Article 1306 of the Civil Code provides that parties to a contract may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.
Article 1159 of the same Code also provides that obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith. Courts cannot stipulate for the parties nor amend their agreement where the same
does not contravene law, morals, good customs, public order or public policy, for to do so would be to alter the real intent of the
parties, and would run contrary to the function of the courts to give force and effect thereto. 15 Not being contrary to public policy, the
non-involvement clause, which petitioner and respondent freely agreed upon, has the force of law between them, and thus, should be
complied with in good faith.

Duldulao vs. Court of Appeals

G.R. No. 164893, March 1, 2007

Facts:
Constancia P. Duldulao was hired by respondent Baguio Colleges Foundation (BCF) as secretary/clerk-typist and assigned to the
College of Law sometime in June of 1987.

In August 1996, a certain law student filed a complaint against petitioner for alleged irregularities in the performance of her work.
Petitioner was told to submit her answer to the complaint and given several extensions within which to do so. Despite the extensions,
she failed to submit her answer. On 1 October 1996, Dean Honorato V. Aquino of the College of Law informed respondent’s President,
Atty. Edilberto B. Tenefrancia, of petitioner’s failure to file her answer and recommended the assignment of petitioner outside the
College of Law, not only because of such failure to answer but also her having admitted fraternizing with students of the College. On
the same day, respondent’s Vice President for Administration, Leonardo S. dela Cruz, issued a Department Order to Mrs. Duldulao
informing her of her transfer to the Office of the Principals of the High School and Elementary Departments.

On 21 January 1997, the Administrative Investigating Committee found the Department Order appropriate since it was intended to
prevent the controversy between petitioner and the complaining student from adversely affecting a harmonious relationship within
the College of Law among all its constituents. On 17 February 1997, petitioner filed a complaint for constructive dismissal with prayer
for moral and exemplary damages and attorney’s fees before the NLRC Regional Arbitration Branch-Cordillera Administrative Region.
She stated that aside from being tainted with procedural lapses in violation of her right to due process, the transfer also amounted to
her demotion in rank. The NLRC dismissed the complaint for lack of merit which decision was affirmed by the Court of Appeals.

Issue:
Whether petitioner’s transfer as secretary/clerk-typist from the College of Law to the High School and Elementary Departments
amounts to constructive dismissal.

Held:
There was no constructive dismissal.

The SC held that there is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so
unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment. It exists
where there is cessation of work because “continued employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank and a diminution in pay.”

The factual milieu in this case is different. It is the employer’s prerogative, based on its assessment and perception of its employees’
qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to ascertain
where they will function with maximum benefit to the company. An employee’s right to security of tenure does not give him such a
vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be
most useful.

When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a
diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.
The transfer of petitioner does not amount to a demotion in rank and status.

At the onset, it must be stressed that petitioner has no vested right to the position of secretary/clerk-typist of the College of Law that
may operate to deprive respondent of its prerogative to change or transfer her assignment to another department where she will
be most useful in its judgment. After all, petitioner was employed by respondent which is the BCF system itself, not the College of Law
only, which is but a component part of the system. Thus, to respondent belongs the prerogative to reassign petitioner to any of its
departments as it sees fit, provided that such reassignment is made in good faith.

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Petitioner was a secretary/clerk-typist of the College of Law. As such secretary/clerk-typist, she would only have to perform the same
duties in the Office of the Principals of the High School and Elementary Departments. Petitioner was not denied due process.
Reassignments made by management pending investigation of irregularities allegedly committed by an employee fall within the ambit
of management prerogative. The transfer, while incidental to the pending charges against petitioner, was not meant to be a penalty,
but rather a preventive measure to avoid further damage to the College of Law. The purpose of reassignments is no different from that
of preventive suspension which management could validly impose as a measure of protection of the company’s property pending
investigation of any malfeasance or misfeasance committed by the employee.

Almario vs. Philippine Airlines

G.R. No. 170928, September 11, 2007

Facts:
This is a complaint for reimbursement of training costs filed by PAL against its pilot, Almario.
Almario was initially hired as a Boeing 747 Systems Engineer. Later on, he successfully bid for  the higher position of Airbus 300 First
Officer, for which he was given additional training at PAL’s expense. After completing the course,Almario served as A-300 First Officer
of PAL but after eight months of service, he tendered his resignation for “personal reasons.”

PAL then wrote him a letter, stating that they invested heavily on his professional  training on the basis that he continue to serve the
Company for a definite period of time which is approximately 3 yrs. In short, PAL wanted Almario to reconsider his resignation,
otherwise they would be compelled to ask reimbursement for the training costs from him. Despite this,Almario pushed through with
his resignation. Hence, a reimbursement case was filed.

In the lower court, PAL invoked the existence of an innominate contract of do ut facias (I give that you may do) withAlmario in that
by spending for his training, he would render service to it until the costs of training were recovered in at least 3 yrs. They based the
period of “3 yrs” to a decision of the Secretary of Labor concerning PAL’s CBA with its employee-union.

For his part, Almario denied the existence of any agreement with PAL that he would render service to it for three years after
his training, failing which he would reimburse the training costs. The lower court ruled in favor of Almario. On appeal, CA
found Almario liable under the CBA and under Article 22 of the Civil Code.

Issue: Whether or not Almario is obliged to reimburse the costs incurred by PAL for his training

Held:
The petition fails.

The rationale of the three-year period is the prohibitive training costs. At an earlier time, when the CBA between PAL and
its employees were still negotiated, the Secretary of Labor basically ruled that PAL should be allowed a return on investment for their
pilots’ training expenses. Thus, the provisions that pilots 57 years of age shall be frozen and pilots less than 57, provided they have
previously qualified in any company’s turbo-jet aircraft, shall be permitted to occupy anyposition in the company’s turbo-jet fleet,
were incorporated in later incarnations of the CBA.

When Almario took the training course, he was about 39 yrs old, 21 yrs away from the retirement age of 60. Hence, with the maturity,
expertise and experience he gained from the training course, he was expected to serve PAL for at least three yrs to offset “the
prohibitive costs” thereof.

Article 22 of the Civil Code applies. This provision on unjust enrichment recognizes the principle that one may not enrich himself at
the expense of another.

Enrichment of the defendant consists in every patrimonial, physical, or moral advantage, so long as it is appreciable in money. It may
consist of some positive pecuniary value incorporated into the patrimony of the defendant, such as: (1) the enjoyment of a thing
belonging to the plaintiff; (2) the benefits from service rendered by the plaintiff to the defendant; (3) the acquisition of a right,
whether real or personal; (4) the increase of value of property of the defendant; (5) the improvement of a right of the defendant, such
as the acquisition of a right of preference; (6) the recognition of the existence of a right in  the defendant; and (7) the improvement of
the conditions of life of the defendant.

The enrichment of the defendant must have a correlative prejudice, disadvantage, or injury to the plaintiff. This prejudice may consist,
not only of the loss of property or the deprivation of its enjoyment, but also of non-payment of compensation for a prestation or
service rendered to the defendant without intent to donate on the part of the plaintiff, or the failure to acquire something which the
latter would have obtained. The injury to the plaintiff, however, need not be the cause of the  enrichment of the defendant. It is enough
that there be some relation between them, that theenrichment of the defendant would not have been produced had it not been for the
fact from which the injury to the plaintiff is derived.

In the present case, PAL invested for the training of Almario on the expectation that they may recover by availing ofAlmario’s services
for at least three years. This expectation was not fully realized, however, due to  Almario’s resignation after only eight months of
service following the completion of his training course. He cannot, therefore, refuse to reimburse the costs of training without
violating the principle of unjust enrichment.

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Bisig Manggagawa sa Tryco vs. NLRC

G.R. No. 151309, Oct. 15, 2008

Facts:
Petitioners are employees of Tryco Pharmaceuticals Corporation, maker of veterinary medicines and products. Tryco and the
petitioners signed a Memorandum of Agreement (MOA), providing for a compressed workweek schedule to be implemented in the
company effective May 20, 1996. The MOA was entered into pursuant to Department of Labor and Employment Department Order
(D.O.) No. 21, Series of 1990, Guidelines on the Implementation of Compressed Workweek. 

As provided in the MOA, 8:00 a.m. to 6:12 p.m., from Monday to Friday, shall be considered as the regular working hours, and no
overtime pay shall be due and payable to the employee for work rendered during those hours. The MOA specifically stated that the
employee waives the right to claim overtime pay for work rendered after 5:00 p.m. until 6:12 p.m. from Monday to Friday considering
that the compressed workweek schedule is adopted in lieu of the regular workweek schedule which also consists of 46 hours.
However, should an employee be permitted or required to work beyond 6:12 p.m., such employee shall be entitled to overtime pay.
Tryco informed the Bureau of Working Conditions of the Department of Labor and Employment of the implementation of a
compressed workweek in the company. In January 1997, BMT and Tryco negotiated for the renewal of their collective bargaining
agreement (CBA) but failed to arrive at a new agreement. Meantime, Tryco received the Letter dated March 26, 1997 from the Bureau
of Animal Industry of the Department of Agriculture reminding it that its production should be conducted in San Rafael, Bulacan, not
in Caloocan City since its operating permit was licensed there. Accordingly, Tryco issued a Memorandum  dated April 7, 1997 which
directed petitioners to report to the company's plant site in Bulacan. BMT opposed the transfer of its members to San Rafael, Bulacan,
contending that it constitutes unfair labor practice. In protest, BMT declared a strike on May 26, 1997. Petitioners then filed their
complaints to the labor arbiter alleging that Tryco negotiated in bad faith and unfair labor practice of Tryco by transferring the
members of the union in order to paralyze it and that therefore it amounted to constructive dismissal.

Issue: WON there was constructive dismissal due to the transfer of the petitioners from Caloocan City to San Rafael Bulacan

Held:
The petition has no merit.

Tryco's decision to transfer its production activities to San Rafael, Bulacan, regardless of whether it was made pursuant to the letter of
the Bureau of Animal Industry, was within the scope of its inherent right to control and manage its enterprise effectively. While the
law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.

This prerogative extends to the management's right to regulate, according to its own discretion and judgment, all aspects of
employment, including the freedom to transfer and reassign employees according to the requirements of its business.Management's
prerogative of transferring and reassigning employees from one area of operation to another in order to meet the requirements of the
business is, therefore, generally not constitutive of constructive dismissal. Thus, the consequent transfer of Tryco's personnel,
assigned to the Production Department was well within the scope of its management prerogative.

When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee, and it does not involve a demotion in rank or
diminution of salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.
However, the employer has the burden of proving that the transfer of an employee is for valid and legitimate grounds. The employer
must show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank
or a diminution of his salaries, privileges and other benefits.

Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or diminution of salaries, benefits and other
privileges of the petitioners. Petitioners, therefore, anchor their objection solely on the ground that it would cause them great
inconvenience since they are all residents of Metro Manila and they would incur additional expenses to travel daily from Manila to
Bulacan.

The Court has previously declared that mere incidental inconvenience is not sufficient to warrant a claim of constructive
dismissal. Objection to a transfer that is grounded solely upon the personal inconvenience or hardship that will be caused to the
employee by reason of the transfer is not a valid reason to disobey an order of transfer.

Manila Electric Co. vs. Lim

G.R. No. 184769; October 5, 2010

Facts:
Rosario G. Lim (respondent), also known as Cherry Lim, is an administrative clerk at the Manila Electric Company (MERALCO). On
June 4, 2008, an anonymous letter was posted at the door of the Metering Office of the Administration building of MERALCO Plaridel,
Bulacan Sector, at which respondent is assigned, denouncing respondent. The letter reads:

Cherry Lim:
MATAPOS MONG LAMUNIN LAHAT NG BIYAYA NG MERALCO, NGAYON NAMAN AY GUSTO MONG PALAMON ANG BUONG
KUMPANYA SA MGA BUWAYA NG GOBYERNO. KAPAL NG MUKHA MO, LUMAYAS KA RITO, WALANG UTANG NA LOOB

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Resource Staffing, directed the transfer of respondent to MERALCO's Alabang Sector in Muntinlupa as "A/F OTMS Clerk," effective July
18, 2008 in light of the receipt of ". . . reports that there were accusations and threats directed against her from unknown individuals
and which could possibly compromise her safety and security."

Respondent, by letter of July 10, 2008 addressed to petitioner Ruben A. Sapitula, Vice-President and Head of MERALCO's Human
Resource Administration, appealed her transfer and requested for a dialogue so she could voice her concerns and misgivings on the
matter, claiming that the "punitive" nature of the transfer amounted to a denial of due process. Citing the grueling travel from her
residence in Pampanga to Alabang and back entails, and violation of the provisions on job security of their Collective Bargaining
Agreement (CBA).
Respondent filed a petition for the issuance of a writ of habeas data against petitioners before the Regional Trial Court (RTC) of
Bulacan. By respondent's allegation, petitioners' unlawful act and omission consisting of their continued failure and refusal to provide
her with details or information about the alleged report which MERALCO purportedly received  concerning threats to her safety and
security amount to a violation of her right to privacy in life, liberty and security, correctible by habeas data.

Respondent is essentially questioning the transfer of her place of work by her employer and the terms and conditions of her
employment which arise from an employer-employee relationship over which the NLRC and the Labor Arbiters under Article 217 of
the Labor Code have jurisdiction.

Petitioners moved for the dismissal of the petition and recall of the TRO on the grounds that, inter alia, resort to a petition for writ
of habeas data was not in order; and the RTC lacked jurisdiction over the case which properly belongs to the NLRC. 

Issue: Whether or not, RTC has jurisdiction.

Held:
Respondent's plea that she be spared from complying with MERALCO's Memorandum directing her reassignment to the Alabang
Sector, under the guise of a quest for information or data allegedly in possession of petitioners, does not fall within the province of a
writ of habeas data.

It is evident that respondent's reservations on the real reasons for her transfer — a legitimate concern respecting the terms and
conditions of one's employment — are what prompted her to adopt the extraordinary remedy of habeas data. Jurisdiction over such
concerns is inarguably lodged by law with the NLRC and the Labor Arbiters.

Bello vs. Bonifacio Security Services, Inc.

G.R. No. 188086; August 3, 2011

Facts:
Respondent Bonifacio Security Services, Inc. (BSSI) is a domestic private corporation engaged in the business of providing security
services. In July 2001, the BSSI hired Bello as a roving traffic marshal to manage traffic and to conduct security and safety-related
operations in the Bonifacio Global City (BGC). In August 2001, Bello was posted at the Negros Navigation Company in Pier 2, North
Harbor, to supervise sectoral operations. In November 2001, he was assigned at BGC as assistant detachment commander. After a
week, he was transferred to Pacific Plaza Towers as assistant detachment commander and later as detachment commander. In June
2002, he was assigned at Pier 2, North Harbor as assistant detachment commander, but later reassigned to BGC. In August 2002, the
BSSI hired a new operations manager, resulting in the reorganization of posts. In October 2002, Bello was assigned as roving traffic
marshal at the BGC. On October 25, 2002, he filed an indefinite leave of absence when his new assignment took effect.

On November 5, 2002, Bello filed a complaint against the BSSI and its General Manager, respondent Samuel Tomas, with the National
Labor Relations Commission (NLRC), claiming that he had been constructively dismissed when he was demoted from a detachment
commander to a mere traffic marshal. He alleged that he received a series of promotions from 2001 to 2002, from traffic marshal to
supervisor, to assistant detachment commander, and to detachment commander. 

The BSSI denied Bello's claim of constructive dismissal, arguing that no promotion took place; Bello's designation as assistant
detachment commander or detachment commander was not an employment position but a duty-related assignment; Bello abandoned
his job when he went on an indefinite leave of absence and did not report for work.

Labor Arbiter Cresencio G. Ramos, Jr. found that Bello was illegally dismissed, noting that the BSSI failed to adduce evidence that Bello
abandoned his employment.

In its March 26, 2008 resolution, the NLRC affirmed the labor arbiter's decision, finding that Bello had been constructively dismissed
when he was demoted to the rank-and-file position of traffic marshal after occupying the supervisory position of assistant detachment
commander and detachment commander. 
The CA nullified the NLRC resolutions, finding the records bereft of evidence substantiating the labor arbiter's and the NLRC's
conclusions that Bello had been constructively dismissed. It noted that Bello offered no evidence to prove that there was a series of
promotions that would justify his claim of subsequent demotion. The CA denied the BSSI's motion for reconsideration,  paving the way
for the present petition.

Issue: Whether or not, Bello was illegally dismissed.

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Held:
We find no reason to disturb the CA conclusion that there was no constructive dismissal. Case law defines constructive dismissal as a
cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as when there is a
demotion in rank or diminution in pay, or both, or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee.
Other than his bare and self-serving allegations, Bello has not offered any evidence that he was promoted in a span of four months
since his employment as traffic marshal in July 2001 to a detachment commander in November 2001. During his six-month
probationary period of employment, it is highly improbable that Bello would be promoted after just a month of employment, from a
traffic marshal in July 2001 to supervisor in August 2001, and three months later to assistant detachment commander and to
detachment commander in November 2001. At most, the BSSI merely changed his assignment or transferred him to the post where
his service would be most beneficial to its clients. The management's prerogative of transferring and reassigning employees from one
area of operation to another in order to meet the requirements of the business is generally not constitutive of constructive
dismissal. We see this to be the case in the present dispute so that the consequent reassignment of Bello to a traffic marshal post was
well within the scope of the BSSI's management prerogative.

Alert Security vs. Pasawilan

G.R. No. 182397, September 14, 2011

Facts:
Respondents Saidali Pasawilan, Wilfredo Verceles and Melchor Bulusan were all employed by petitioner Alert Security and
Investigation Agency, Inc. (Alert Security) as security guards beginning March 31, 1996, January 14, 1997, and January 24, 1997,
respectively. They were paid 165.00 pesos a day as regular employees, and assigned at the Department of Science and Technology
(DOST) pursuant to a security service contract between the DOST and Alert Security.

Respondents aver that because they were underpaid, they filed a complaint for money claims against Alert Security and its president
and general manager, petitioner Manuel D. Dasig, before Labor Arbiter Ariel C. Santos. As a result of their complaint, they were
relieved from their posts in the DOST and were not given new assignments despite the lapse of six months. On January 26, 1999, they
filed a joint complaint for illegal dismissal against petitioners.

Petitioners, on the other hand, deny that they dismissed the respondents. Petitioners presented "Duty Detail Orders" that Alert
Security issued to show that respondents were in fact assigned to LRTA. Respondents, however, failed to report at the LRTA and
instead kept loitering at the DOST and tried to convince other security guards to file complaints against Alert Security. Thus, on
August 3, 1998, Alert Security filed a "termination report" with the Department of Labor and Employment relative to the termination
of the respondents.

Issue: Whether respondents were illegally dismissed

Held:
We rule in the affirmative.

As a rule, employment cannot be terminated by an employer without any just or authorized cause. No less than the 1987 Constitution
in Section 3, Article 13 guarantees security of tenure for workers and because of this, an employee may only be terminated for just or
authorized causes that must comply with the due process requirements mandated by law. Hence, employers are barred from
arbitrarily removing their workers whenever and however they want. The law sets the valid grounds for termination as well as the
proper procedure to take when terminating the services of an employee.

Although we recognize the right of employers to shape their own work force, this management prerogative must not curtail the basic
right of employees to security of tenure. There must be a valid and lawful reason for terminating the employment of a worker.
Otherwise, it is illegal and would be dealt with by the courts accordingly.

The Labor Code, as amended, enumerates several just and authorized causes for a valid termination of employment. An employee
asserting his right and asking for minimum wage is not among those causes. Dismissing an employee on this ground amounts to
retaliation by management for an employee’s legitimate grievance without due process. Such stroke of retribution has no place in
Philippine Labor Laws.

On the element of the failure of the employee to report for work, we also cannot accept the allegations of petitioners that respondents
unjustifiably refused to report for duty in their new posts. A careful review of the records reveals that there is no showing that
respondents were notified of their new assignments. Granting that the "Duty Detail Orders" were indeed issued, they served no
purpose unless the intended recipients of the orders are informed of such.

The employer cannot simply conclude that an employee is ipso facto notified of a transfer when there is no evidence to indicate that
the employee had knowledge of the transfer order. Hence, the failure of an employee to report for work at the new location cannot be
taken against him as an element of abandonment.
We acknowledge and recognize the right of an employer to transfer employees in the interest of the service. This exercise is a
management prerogative which is a lawful right of an employer. However, like all rights, there are limitations to the right to transfer
employees. As ruled in the case of Blue Dairy Corporation v. NLRC:

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x x x The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic
elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it
cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to
show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits. x x x

In addition to these tests for a valid transfer, there should be proper and effective notice to the employee concerned. It is the
employer’s burden to show that the employee was duly notified of the transfer. Verily, an employer cannot reasonably expect an
employee to report for work in a new location without first informing said employee of the transfer. Petitioners’ insistence on the
sufficiency of mere issuance of the transfer order is indicative of bad faith on their part.

Manila Pavilion Hotel vs. Delada

G.R. No. 189947, January 25, 2011

Facts:
Delada was the Union President of the Manila Pavilion Supervisors Association at MPH. He was originally assigned as Head Waiter of
Rotisserie, a fine-dining restaurant operated by petitioner. Pursuant to a supervisory personnel reorganization program, MPH
reassigned him as Head Waiter of Seasons Coffee Shop, another restaurant operated by petitioner at the same hotel. Respondent
declined the inter-outlet transfer and instead asked for a grievance meeting on the matter, pursuant to their Collective Bargaining
Agreement (CBA). He also requested his retention as Head Waiter of Rotisserie while the grievance procedure was ongoing.

MPH replied and told respondent to report to his new assignment for the time being, without prejudice to the resolution of the
grievance involving the transfer. He adamantly refused to assume his new post at the Seasons Coffee Shop and instead continued to
report to his previous assignment at Rotisserie. Thus, MPH sent him several memoranda on various dates, requiring him to explain in
writing why he should not be penalized for the following offenses: serious misconduct; willful disobedience of the lawful orders of the
employer; gross insubordination; gross and habitual neglect of duties; and willful breach of trust. Despite the notices from MPH,
Delada persistently rebuffed orders for him to report to his new assignment. According to him, since the grievance machinery under
their CBA had already been initiated, his transfer must be held in abeyance. Thus, on 9 May 2007, MPH initiated administrative
proceedings against him.

Issue: WON MPH retained the authority to continue with the administrative case against Delada for insubordination and willful
disobedience of the transfer order.

Held:
MPH did not lose its authority to discipline respondent for his continued refusal to report to his new assignment.

In Allied Banking Corporation, employer Allied Bank reassigned respondent Galanida from its Cebu City branch to its Bacolod and
Tagbilaran branches. He refused to follow the transfer order and instead filed a Complaint before the Labor Arbiter for constructive
dismissal. While the case was pending, Allied Bank insisted that he report to his new assignment. When he continued to refuse, it
directed him to explain in writing why no disciplinary action should be meted out to him. Due to his continued refusal to report to his
new assignment, Allied Bank eventually terminated his services. When the issue of whether he could validly refuse to obey the
transfer orders was brought before this Court, we ruled thus:
The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer. 1âwphi1 Employees may
object to, negotiate and seek redress against employers for rules or orders that they regard as unjust or illegal. However, until and
unless these rules or orders are declared illegal or improper by competent authority, the employees ignore or disobey them at their
peril. For Galanida’s continued refusal to obey Allied Bank's transfer orders, we hold that the bank dismissed Galanida for just cause in
accordance with Article 282(a) of the Labor Code. Galanida is thus not entitled to reinstatement or to separation pay.

It is important to note what the PVA said on Delada’s defiance of the transfer order:

In fact, Delada cannot hide under the legal cloak of the grievance machinery of the CBA or the voluntary arbitration proceedings to
disobey a valid order of transfer from the management of the hotel. While it is true that Delada’s transfer to Seasons is the subject of
the grievance machinery in accordance with the provisions of their CBA, Delada is expected to comply first with the said lawful
directive while awaiting the results of the decision in the grievance proceedings. This issue falls squarely in the case of Allied Banking
Corporation vs. Court of Appeals x x x.

Pursuant to Allied Banking, unless the order of MPH is rendered invalid, there is a presumption of the validity of that order. Since the
PVA eventually ruled that the transfer order was a valid exercise of management prerogative, we hereby reverse the Decision and the
Resolution of the CA affirming the Decision of the PVA in this respect. MPH had the authority to continue with the administrative
proceedings for insubordination and willful disobedience against Delada and to impose on him the penalty of suspension. As a
consequence, petitioner is not liable to pay back wages and other benefits for the period corresponding to the penalty of 90-day
suspension.

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Barba vs. Liceo de Cagayan University

G.R. No. 193857; November 28, 2012

Facts:
Petitioner started working for respondent on July 8, 1993 as medical officer/school physician for a period of one school year or until
March 31, 1994and she was chosen by respondent to be the recipient of a scholarship grant to pursue a three-year residency training
in Rehabilitation Medicine at the Veterans Memorial Medical Center (VMMC) provided that after the duration of her study and
training the petitioner shall serve the SCHOOL in whatever position the SCHOOL desires related to the SCHOLAR's studies for a period
of not less than ten (10) years;

After completing her residency training with VMMC in June 1997, petitioner returned to continue working for respondent until she
was appointed as Dean of Physical Therapy effective July 1, 2002 for a period of three (3) years unless sooner revoked for a valid
cause.

Due to the low number of enrollees, respondent decided to freeze the operation of the College of Physical Therapy indefinitely thus,
respondent's President Dr. Rafaelita Pelaez-Golez wrote petitioner a letter  dated March 16, 2005 informing her that her services as
dean of the said college will end at the close of the school year. Thereafter, the College of Physical Therapy ceased operations on
March 31, 2005, and petitioner went on leave without pay starting on April 9, 2005.

Subsequently, respondent’s Executive Vice President, Dr. Marian M. Lerin, through Dr. Glory S. Magdale, respondent's Vice President
for Academic Affairs repeatedly sent letters to the petitioner directing her to report to the College of Nursing for her teaching load to
wit:

 Letter dated April 27, 2005 instructing petitioner to return to work on June 1, 2005 wherein the latter responded that she
has not committed to teach in the College of Nursing and that as far as she can recall, her employment is not dependent on
any teaching load.
 Letter dated June 21, 2005,  directing petitioner to report for work and to teach her assigned subjects on or before June 23,
2005, otherwise, she will be dismissed from employment on the ground of abandonment wherein the latter replied through
counsel, that teaching in the College of Nursing is in no way related to her scholarship and training in the field of
rehabilitation medicine. Petitioner added that coercing her to become a faculty member from her position as College Dean is
a great demotion which amounts to constructive dismissal.
 Letter dated June 24, 2005 ordering her to report for work as she was still bound by the Scholarship Contract to serve
respondent for two more years which petitioner refused to heed.

On June 22, 2005, , petitioner filed a complaint before the Labor Arbiter for illegal dismissal, payment of separation pay and
retirement benefits against respondent, Dr. Magdale and Dr. Golez. She alleged that her transfer to the College of Nursing as a faculty
member is a demotion amounting to constructive dismissal.

June 28, 2005, Dr. Magdale sent petitioner a notice terminating her services on the ground of abandonment.

Issue: Whether or not the petitioner’s transfer to the College of Nursing as faculty member is a demotion amounting to constructive
dismissal

Held:
In constructive dismissal cases, the employer has the burden of proving that its conduct and action or the transfer of an employee are
for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive
dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee. In
this case, petitioner's transfer was not unreasonable, inconvenient or prejudicial to her. On the contrary, the assignment of a teaching
load in the College of Nursing was undertaken by respondent to accommodate petitioner following the closure of the College of
Physical Therapy. Respondent further considered the fact that petitioner still has two years to serve the university under the
Scholarship Contract.

Petitioner's subsequent transfer to another department or college is not tantamount to demotion as it was a valid transfer. There is
therefore no constructive dismissal to speak of. That petitioner ceased to enjoy the compensation, privileges and benefits as College
Dean was but a logical consequence of the valid revocation or termination of such fixed-term position. Indeed, it would be absurd and
unjust for respondent to maintain a deanship position in a college or department that has ceased to exist. Under the circumstances,
giving petitioner a teaching load in another College/Department that is related to Physical Therapy — thus enabling her to serve and
complete her remaining two years under the Scholarship Contract — is a valid exercise of management prerogative on the part of
respondent. 

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Best Wear Garments vs. De Lemos

G.R. no. 191281; December 5, 2012

Facts:
Petitioner Best Wear Garments is a sole proprietorship represented by its General Manager Alex Sitosta. Respondents Cecile M.
Ocubillo and Adelaida B. De Lemos were hired as sewers on piece-rate basis by petitioners on October 27, 1993 and July 12, 1994,
respectively.

De Lemos claimed that after two months in her new assignment, she was able to adjust but Sitosta again transferred her to a "different
operation where she could not earn much as before because by-products require long period of time to finish." She averred that the
reason for her transfer was her refusal "to render [overtime work] up to 7:00 p.m."

On her part, Ocubillo alleged that her transfer was precipitated by her having "incurred excessive absences since 2001." Her absences
were due to the fact that her father became very sick since 2001 until his untimely demise on November 9, 2003; aside from this, she
herself became very sickly. She claimed that from September to October 2003, Sitosta assigned her to different machines "whichever
is available" and that "there were times, she could not earn for a day because there was no available machine to use."

On May 20, 2004, De Lemos filed a complaint  for illegal dismissal with prayer for backwages and other accrued benefits, separation
pay, service incentive leave pay and attorney's fees. A similar complaint  was filed by Ocubillo on June 10, 2004. Both alleged in their
position paper that in August 2003, Sitosta arbitrarily transferred them to other areas of operation of petitioner's garments company,
which they said amounted to constructive dismissal as it resulted in less earnings for them.

Respondent company points out that it is engaged in the business of garments manufacturing as a sub-contractor. That,  the kind of
work it performs is dependent into with its client which specifies the work it has to perform . And, that corollary thereto, the work to
be performed by its employees will depend on the work specifications in the contract. Thus, if complainants have been assigned to
different operations, it was pursuant to the requirements of its contracts. As to the allegation of respondents that the reason for their
transfer was their refusal to render overtime work until 7:00 p.m., petitioners asserted that respondents are piece-rate workers and
hence they are not paid according to the number of hours worked.

Issue: Whether or not deployment of sewers to work on different types of garments as is arbitrary and constitute constructive
dismissal

Held:
The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management
of its prerogative to change their assignments or to transfer them. Thus, an employer may transfer or assign employees from one
office or area of operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other privileges,
and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without
sufficient cause.  

In Blue Dairy Corporation v. NLRC,  we held that:

The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic
elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it
cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to
show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee's
transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is
rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive
dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the
employee leaving him with no option but to forego with his continued employment. 

Being piece-rate workers assigned to individual sewing machines, respondents' earnings depended on the quality and quantity of
finished products. That their work output might have been affected by the change in their specific work assignments does not
necessarily imply that any resulting reduction in pay is tantamount to constructive dismissal. Workers under piece-rate employment
have no fixed salaries and their compensation is computed on the basis of accomplished tasks. As admitted by respondent De Lemos,
some garments or by-products took a longer time to finish so they could not earn as much as before. Also, the type of sewing jobs
available would depend on the specifications made by the clients of petitioner company. Under these circumstances, it cannot be said
that the transfer was unreasonable, inconvenient or prejudicial to the respondents. Such deployment of sewers to work on different
types of garments as dictated by present business necessity is within the ambit of management prerogative which, in the absence of
bad faith, ill motive or discrimination, should not be interfered with by the courts.

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Royal Plant Workers Union vs. Coca-Cola Bottlers Phils., Inc. -Cebu Plant
G.R. No. 198783, April 15, 2013

Facts:
Under the employ of each bottling plant are bottling operators. In the case of the plant in Cebu City, there are 20 bottling operators
who work for its Bottling Line 1 while there are 12-14 bottling operators who man its Bottling Line 2. All of them are male and they
are members of herein respondent Royal Plant Workers Union (ROPWU).

The bottling operators work in two shifts. The first shift is from 8 a.m. to 5 p.m. and the second shift is from 5 p.m. up to the time
production operations is finished. Thus, the second shift varies and may end beyond eight (8) hours. However, the bottling operators
are compensated with overtime pay if the shift extends beyond eight (8) hours. For Bottling Line 1, 10 bottling operators work for
each shift while 6 to 7 bottling operators work for each shift for Bottling Line 2.

Each shift has rotations of work time and break time. Prior to September 2008, the rotation is this: after two and a half (2 1/2) hours
of work, the bottling operators are given a 30-minute break and this goes on until the shift ends. In September 2008 and up to the
present, the rotation has changed and bottling operators are now given a 30-minute break after one and one half (1 1/2) hours of
work.
In 1974, the bottling operators of then Bottling Line 2 were provided with chairs upon their request. In 1988, the bottling operators of
then Bottling Line 1 followed suit and asked to be provided also with chairs. Their request was likewise granted. Sometime in
September 2008, the chairs provided for the operators were removed pursuant to a national directive of petitioner. With this task of
moving constantly to check on the machinery and equipment assigned to him, a bottling operator does not need a chair anymore,
hence, petitioner's directive to remove them. Furthermore, CCBPI rationalized that the removal of the chairs is implemented so that
the bottling operators will avoid sleeping, thus, prevent injuries to their persons.
The bottling operators took issue with the removal of the chairs.
Issue: Whether or not the removal of the bottling operators' chairs from CCBPI's production/manufacturing lines a valid exercise of a
management prerogative

Held:
Yes.
The Court has held that management is free to regulate, according to its own discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods, time, place, and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay-off of workers, and discipline, dismissal and recall of
workers. The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard
to the rights of labor.

In the present controversy, it cannot be denied that CCBPI removed the operators' chairs pursuant to a national directive and in line
with its "I Operate, I Maintain, I Clean" program, launched to enable the Union to perform their duties and responsibilities more
efficiently. The chairs were not removed indiscriminately. They were carefully studied with due regard to the welfare of the members
of the Union. The removal of the chairs was compensated by: a) a reduction of the operating hours of the bottling operators from a
two-and-one-half (2 1/2)-hour rotation period to a one-and-a-half (1 1/2) hour rotation period; and  b) anincrease of the break
period from 15 to 30 minutes between rotations.

Apparently, the decision to remove the chairs was done with good intentions as CCBPI wanted to avoid instances of operators
sleeping on the job while in the performance of their duties and responsibilities and because of the fact that the chairs were not
necessary considering that the operators constantly move about while working. In short, the removal of the chairs was designed to
increase work efficiency. Hence, CCBPI's exercise of its management prerogative was made in good faith without doing any harm to
the workers' rights. 

The rights of the Union under any labor law were not violated. There is no law that requires employers to provide chairs for bottling
operators. Further, The operators' chairs cannot be considered as one of the employee benefits covered in Article 100 of the Labor
Code. In the Court's view, the term "benefits" mentioned in the non-diminution rule refers to monetary benefits or privileges given to
the employee with monetary equivalents. Such benefits or privileges form part of the employees' wage, salary or compensation
making them enforceable obligations

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Peckson vs. Robinsons Supermarket Corp.

G.R. No. 198534, July 3, 2013

Facts:
The petitioner first joined the Robinsons Supermarket Corporation (RSC) as a Sales Clerk on November 3, 1987. On October 26, 2006,
she was holding the position of Category Buyer when respondent Roena Sarte (Sarte), RSC's Assistant Vice-President for
Merchandising, reassigned her to the position of Provincial Coordinator, effective November 1, 2006. Claiming that her new
assignment was a demotion because it was non-supervisory and clerical in nature, the petitioner refused to turn over her
responsibilities to the new Category Buyer, or to accept her new responsibilities as Provincial Coordinator.

Issue: Whether or not petitioner’s lateral transfer from Category Buyer to Provincial Coordinator is considered a demotion
amounting to constructive dismissal

Held:
Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion
and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work,
work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to
the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice.

Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one
position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another
of equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an employee for legitimate business
purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment
or is a demotion without sufficient cause; (d) the employer must be able to show that the transfer is not unreasonable, inconvenient,
or prejudicial to the employee.

If the transfer of an employee is not  unreasonable, or inconvenient, or  prejudicial to him, and it does not  involve a demotion in rank
or a  diminution of his salaries, benefits and other privileges, the employee  may not complain that it amounts  to a constructive
dismissal.
The respondents had the burden of proof that the transfer of the petitioner was not tantamount to constructive dismissal. The
respondents have discharged  the burden of proof that the transfer of the petitioner was not  tantamount to constructive dismissal.
 
In the case at bar, we agree with the appellate court that there is substantial showing that the transfer of the petitioner from Category
Buyer to Provincial Coordinator was not unreasonable, inconvenient, or prejudicial to her. The petitioner failed to dispute that the job
classifications of Category Buyer and Provincial Coordinator are similar, or that they command a similar salary structure and
responsibilities. We agree with the NLRC that the Provincial Coordinator's position does not involve mere clerical functions but
requires the exercise of discretion from time to time, as well as independent judgment, since the Provincial Coordinator gives
appropriate recommendations to management and ensures the faithful implementation of policies and programs of the company. It
even has influence over a Category Buyer because of its recommendatory function that enables the Category Buyer to make right
decisions on assortment, price and quantity of the items to be sold by the store.

V. TERMINATION OF EMPLOYMENT
Retuya vs. NLRC
G.R. No. 148848. August 5, 2003

Facts:
Private respondent, Insular Builders, Inc., is a family-owned corporation managed and operated principally by Antonio Murillo, father,
and his son, Rodolfo Murillo. It is engaged in the construction business. Petitioners, on the other hand, were workers who have
rendered services in various corporations of private respondents, namely Mindanao Integrated Builders, Inc., Sta. Clara Plywood, Inc.,
Insular Builders, Inc. and Queen City Builders, Inc. Early 1993, at the height of the feud between private respondents Antonio Murillo
and Rodolfo Murillo, the former discharged the latter from his position as manager of Insular Builders, Inc. and assumed control of the
company. Petitioners found themselves in the middle of the crossfire and were told to temporarily stop working. Later, or on July 26,
1993, private respondent Antonio Murillo dismissed petitioners and reported the matter to the DOLE. Petitioners were however
made to continue their work, rendering the same services, in the same place, locality and at the same office but under a different
company, the Queen City Builders, Inc., managed and controlled by private respondent Rodolfo Murillo. On August 3, 1993, petitioners
filed with the NLRC-RAB X, a complaint for illegal dismissal, non-payment of wages, 13th month pay, and retirement pay as regards
petitioner Abdon Dayson. Petitioners averred that they were terminated from employment on July 26, 1993 without prior notice and
also in absence of any valid cause. They alleged that their termination was an off-shoot of the supposed personal rift and
disagreements between private respondents Antonio Murillo and Rodolfo Murillo. On the other hand, private respondents Insular
Builders, Inc. and Antonio Murillo deny having employed petitioners Baltazar Quilat, Abdon Dayson and Eleuterio Ensalada as they
were personal employees of and rendering services to private respondent Rodolfo Murillo.

Issue:
Whether or not petitioners are entitled to full back wages and separation pay considering they were found to be illegally dismissed?

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Ruling:
The SC held that illegally dismissed employees were entitled to full back wages that should not be diminished or reduced by
the amount they had earned from another employment during the period of their illegal dismissal. While litigating, employees must
still earn a living. Furthermore, as penalty for their illegal dismissal, their employers must pay them full back wages.

In the present case, petitioners were dismissed because of a "change of management." They were not given any prior written notice,
but simply told that their services were terminated on the day they stopped working for Insular Builders, Inc. Under the
circumstances, the CA was correct in upholding the labor arbiter's finding that they had been illegally dismissed. Having been illegally
dismissed, petitioners should be awarded back wages in accordance with Bustamante v. NLRC. The fact that they worked for a sister
company immediately after being dismissed from Insular Builders, Inc. should not preclude such award.

The Court deems it appropriate, however, to reconsider such earlier ruling on the computation of backwages as enunciated in said
Pines City Educational Center case, by now holding that comfortably with the evident legislative intent as expressed in Rep. Act. No.
6715, above-quoted, backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be diminished or
reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is
that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and family, while
full backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. The
clear legislative intent of the amendment in Rep. Act No. 6715 is to give more benefits to workers than was previously given them
under the Mercury Drug rule or the 'deduction of earnings elsewhere' rule. Therefore, in accordance with R.A. No. 6715, petitioners
are entitled to their full backwages, inclusive of allowances and other benefits or their monetary equivalent, from the time their actual
compensation was withheld from them up to the time of their actual reinstatement.

While it may be true that petitioners continued to work in the same place and office as in their previous employment, it is equally true
that they had in fact been illegally dismissed by their previous employer. Thus, they lost their former work status and benefits in a
manner violative of the law. They became new employees of the latter firm and, as such, were deprived of seniority and other
employment benefits they had when they were still with their former employer. Moreover, petitioners are entitled to separation pay.
As provided by Article 279 of the Labor Code, an illegally dismissed employee is entitled to the twin reliefs of 1) either reinstatement
or separation pay, if reinstatement is no longer feasible; and 2) back wages. These are distinct and separate reliefs given to alleviate
the economic setback brought about by the employee's dismissal. The award of one does not bar the other. Back wages may be
awarded without reinstatement, and reinstatement may be ordered without awarding back wages. Petition for backwages and
separation is granted.

Agabon vs. NLRC

GR No. 158693. November 17, 2003

Facts:
Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction
materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until
February 23, 1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal and
payment of money claims and on December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal and
ordered private respondent to pay the monetary claims and, in lieu of reinstatement to pay them their separation pay of one (1)
month for every year of service from date of hiring up to November 29, 1999.

Petitioners assert that they were dismissed because the private respondent refused to give them assignments unless they agreed to
work on a "pakyaw" basis when they reported for duty on February 23, 1999. They did not agree on this arrangement because it
would mean losing benefits as Social Security System (SSS) members. Petitioners also claim that private respondent did not comply
with the twin requirements of notice and hearing.

Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their work. In fact, private
respondent sent two letters to the last known addresses of the petitioners advising them to report for work. Private respondent's
manager even talked to petitioner Virgilio Agabon by telephone sometime in June 1999 to tell him about the new assignment at
Pacific Plaza Towers involving 40,000 square meters of cornice installation work. However, petitioners did not report for work
because they had subcontracted to perform installation work for another company. Petitioners also demanded for an increase in their
wage to P280.00 per day. When this was not granted, petitioners stopped reporting for work and filed the illegal dismissal case.

Issue:
Whether or not petitioners abandoned their work.

Ruling:
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. 14 It is a form of neglect of duty,
hence, a just cause for termination of employment by the employer. 15 For a valid finding of abandonment, these two factors should
be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever
employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it
may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear
proof that it was deliberate and unjustified.
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In February 1999, petitioners were frequently absent having subcontracted for an installation work for another company.
Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private
respondent. This was not the first time they did this. In January 1996, they did not report for work because they were working for
another company. Private respondent at that time warned petitioners that they would be dismissed if this happened again. Petitioners
disregarded the warning and exhibited a clear intention to sever their employer-employee relationship. The record of an employee is
a relevant consideration in determining the penalty that should be meted out to him.
The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company.
Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known
addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a
valid excuse because the law mandates the twin notice requirements to the employee's last known address. Thus, it should be held
liable for non-compliance with the procedural requirements of due process.

Jaka Food Processing vs. Pacot

G.R. No. 151378. March 28, 2005

Facts:
Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel Lescano and Jonathan Cagabcab were earlier
hired by petitioner JAKA Foods Processing Corporation (JAKA, for short) until the latter terminated their employment on August 29,
1997 because the corporation was "in dire financial straits". It is not disputed, however, that the termination was effected without
JAKA complying with the requirement under Article 283 of the Labor Code regarding the service of a written notice upon the
employees and the Department of Labor and Employment at least one (1) month before the intended date of termination.

In time, respondents separately filed with the Regional Arbitration Branch of the National Labor Relations Commission (NLRC)
complaints for illegal dismissal, underpayment of wages and nonpayment of service incentive leave and 13th month pay against JAKA
and its HRD Manager, Rosana Castelo. After due proceedings, the Labor Arbiter rendered a decision 3 declaring the termination illegal
and ordering JAKA and its HRD Manager to reinstate respondents with full backwages, and separation pay if reinstatement is not
possible.

Issue: What are the legal implications of a situation where an employee is dismissed for cause but such dismissal was effected
without the employer's compliance with the notice requirement under the Labor Code.

Ruling:
In the very recent case of Agabon vs. NLRC, 8 we had the opportunity to resolve a similar question. Therein, we found that the
employees committed a grave offense, i.e., abandonment, which is a form of a neglect of duty which, in turn, is one of the just causes
enumerated under Article 282 of the Labor Code. In said case, we upheld the validity of the dismissal despite non-compliance with the
notice requirement of the Labor Code. However, we required the employer to pay the dismissed employees the amount of P30,000.00,
representing nominal damages for non-compliance with statutory due process. The difference between Agabon and the instant case is
that in the former, the dismissal was based on a just cause under Article 282 of the Labor Code while in the present case, respondents
were dismissed due to retrenchment, which is one of the authorized causes under Article 283 of the same Code. A dismissal for just
cause under Article 282 implies that the employee concerned has committed, or is guilty of, some violation against the employer, i.e.
the employee has committed some serious misconduct, is guilty of some fraud against the employer, or, as in Agabon, he has neglected
his duties. Thus, it can be said that the employee himself initiated the dismissal process.

On another breath, a dismissal for an authorized cause under Article 283 does not necessarily imply delinquency or culpability on the
part of the employee. Instead, the dismissal process is initiated by the employer's exercise of his management prerogative, i.e. when
the employer opts to install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes
to implement a retrenchment program. Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article
282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because
the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized
cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the
dismissal, process was initiated by the employer's exercise of his management prerogative.

It is, therefore, established that there was ground for respondents' dismissal, i.e., retrenchment, which is one of the authorized causes
enumerated under Article 283 of the Labor Code. Likewise, it is established that JAKA failed to comply with the notice requirement
under the same Article. Considering the factual circumstances in the instant case and the above ratiocination, we, therefore, deem it
proper to fix the indemnity at P50,000.00.

Mauricio vs. NLRC

G.R. No.164635. November 17, 2005

Facts:
Petitioner, Majurine L. Mauricio, started working as an Administrative Assistant in the Legal Department of the Manila Banking
Corporation on July 1, 1999 as a probationary employee. As a pre-employment requirement, the bank directed the submission by
petitioner of, among other things, a 1x1 ID picture, 2 x 2 ID picture, two reference letters, and clearance from the employee’s previous
employment. Petitioner failed to submit the required documents, however. The bank thus gave her up to December 15, 1999 to
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comply, and advised her that the processing of her regularization as employee would be held in abeyance. Despite the deadline given
her, petitioner still failed to comply with the requirements, drawing the bank to send her a Memorandum dated December 27, 1999
signed by its Vice-President for Personnel Department Clarence D. Guerrero (Guerrero), giving her until December 29, 1999 to submit
the requirements, and informing that her failure to do so would cause the termination of her employment effective December 29,
1999.

Petitioner, by letter of December 28, 1999, informed the bank that she could not secure a clearance from her previous employer, the
Manila Bankers Life Insurance Corporation (MBLIC), as she had a pending case with it. She thus requested that any action relative to
her employment be held in abeyance as she was still following up the early resolution of the case. Said request was denied by the
bank. Petitioner thus filed on January 21, 2000 a complaint for illegal dismissal, unpaid salary, and moral and exemplary damages
against the bank and Guerrero.

Issue:
Whether or not petitioner was illegally dismissed?

Ruling:
The SC held that the CA was correct when it ruled that in terminating petitioner’s probationary employment due to her failure to
submit a certificate of clearance from her previous employer, the bank was merely exercising its management prerogative.

Industrial Timber Corp. vs. Ababon

G.R. No. 164518. January 25, 2006

Facts:
Industrial Plywood Group Corporation (IPGC) is the owner of a plywood plant located at Agusan, Pequeñ o, Butuan City, leased to
Industrial Timber Corporation (ITC) on August 30, 1985 for a period of five years. Thereafter, ITC commenced operation of the
plywood plant and hired 387 workers.On March 16, 1990, ITC notified the Department of Labor and Employment (DOLE) and its
workers that effective March 19, 1990 it will undergo a "no plant operation" due to lack of raw materials and will resume only after it
can secure logs for milling. Meanwhile, IPGC notified ITC of the expiration of the lease contract in August 1990 and its intention not to
renew the same. On June 26, 1990, ITC notified the DOLE and its workers of the plant's shutdown due to the non-renewal of anti-
pollution permit that expired in April 1990. 6 This fact and the alleged lack of logs for milling constrained ITC to lay off all its workers
until further notice. This was followed by a final notice of closure or cessation of business operations on August 17, 1990 with an
advice for all the workers to collect the benefits due them under the law and CBA. On October 15, 1990, IPGC took over the plywood
plant after it was issued a Wood Processing Plant Permit No. WPR-1004-081791-042, 8 which included the anti-pollution permit, by
the Department of Environment and Natural Resources (DENR) coincidentally on the same day the ITC ceased operation of the plant.
This prompted Virgilio Ababon, et al. to file a complaint against ITC and IPGC for illegal dismissal, unfair labor practice and damages.
They alleged, among others, that the cessation of ITC's operation was intended to bust the union and that both corporations are one
and the same entity being controlled by one owner. On January 20, 1992, after requiring both parties to submit their respective
position papers, Labor Arbiter Irving A. Petilla rendered a decision which refused to pierce the veil of corporate fiction for lack of
evidence to prove that it was used to perpetuate fraud or illegal act; upheld the validity of the closure; and ordered ITC to pay
separation pay of 1/2 month for every year of service.
Ababon, et al. appealed to the NLRC. On May 20, 1993, the NLRC set aside the decision of the Labor Arbiter and ordered the
reinstatement of the employees to their former positions, and the payment of full back wages, damages and attorney's fees. On the
second Petition for Relief, the NLRC set aside all its prior decision and resolutions.

Issue: Whether Ababon, et al. were illegally dismissed due to the closure of ITC's business; and whether they are entitled to
separation pay, backwages, and other monetary awards.

Ruling:
Work is a necessity that has economic significance deserving legal protection. The social justice and protection to labor provisions in
the Constitution dictate so. On the other hand, employers are also accorded rights and privileges to assure their self-determination
and independence, and reasonable return of capital. This mass of privileges comprises the so-called management prerogatives.
Although they may be broad and unlimited in scope, the State has the right to determine whether an employer's privilege is exercised
in a manner that complies with the legal requirements and does not offend the protected rights of labor. One of the rights accorded an
employer is the right to close an establishment or undertaking. The right to close the operation of an establishment or undertaking is
one of the authorized causes in terminating employment of workers, the only limitation being that the closure must not be for the
purpose of circumventing the provisions on termination of employment embodied in the Labor Code.

A reading of Article 283 of the Labor Code shows that a partial or total closure or cessation of operations of establishment or
undertaking may either be due to serious business losses or financial reverses or otherwise. Under the first kind, the employer must
sufficiently and convincingly prove its allegation of substantial losses, while under the second kind, the employer can lawfully close
shop anytime as long as cessation of or withdrawal from business operations was bona fide in character and not impelled by a motive
to defeat or circumvent the tenurial rights of employees, and as long as he pays his employees their termination pay in the amount
corresponding to their length of service. Just as no law forces anyone to go into business, no law can compel anybody to continue the
same.

It would be stretching the intent and spirit of the law if a court interferes with management's prerogative to close or cease its business
operations just because the business is not suffering from any loss or because of the desire to provide the workers continued

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employment. Having established that ITC's closure of the plywood plant was done in good faith and that it was due to causes beyond
its control, the conclusion is inevitable that said closure is valid.

Consequently, Ababon, et al. could not have been illegally dismissed to be entitled to full backwages.

Equitable Bank vs. Sadac

G.R. No. 164772. June 8, 2006

Facts:
Respondent Sadac was appointed Vice President of the Legal Department of petitioner Bank effective 1 August 1981, and
subsequently General Counsel on 8 December 1981. On 26 June 1989, nine lawyers of petitioner Bank’s Legal Department, in a letter-
petition to the Chairman of the Board of Directors, accused respondent Sadac of abusive conduct, and ultimately, petitioned for a
change in leadership of the department.

On the ground of lack of confidence in respondent Sadac, under the rules of client and lawyer relationship, petitioner Bank instructed
respondent Sadac to deliver all materials in his custody in all cases in which the latter was appearing as its counsel of record. In
reaction thereto, respondent Sadac requested for a full hearing and formal investigation but the same remained unheeded. On 9
November 1989, respondent Sadac filed a complaint for illegal dismissal with damages against petitioner Bank and individual
members of the Board of Directors thereof. After learning of the filing of the complaint, petitioner Bank terminated the services of
respondent Sadac. Finally, on 10 August 1989, respondent Sadac was removed from his office and ordered disentitled to any
compensation and other benefits.

Issue: Whether or not Respondent Sadac was illegally dismissed?

Ruling:
The SC held that respondent Sadac was dismissal illegal. The existence of the employer-employee relationship between petitioner
Bank and respondent Sadac had been duly established bringing the case within the coverage of the Labor Code. Sec. 26, Rule 138 of
the Rules of Court is not applicable, as claimed by the petitioner, that the association between the parties was one of a client-lawyer
relationship, and, thus, it could terminate at any time the services of respondent Sadac. Respondent Sadac’s dismissal was grounded
on any of the causes stated in Article 282 of the Labor Code. Petitioner Bank disregarded the procedural requirements in terminating
respondent Sadac’s employment as so required by Section 2 and Section 5, Rule XIV, Book V of the Implementing Rules of the Labor
Code.

Decision of the NLRC is affirmed.

Heirs of Sara Lee vs. Rey

G.R. No. 1499013. August 31, 2006

Facts:
The House of Sara Lee (petitioner) is engaged in the direct selling of a variety of product lines for men and women. In the pursuit of its
business, the petitioner engages and contracts with dealers to sell the aforementioned merchandise. These dealers, known either as
"Independent Business Managers" (IBMs) or "Independent Group Supervisors" (IGSs), depending on whether they sell individually or
through their own group, would obtain at discounted rates the merchandise from the petitioner on credit and then sell the same
products to their own customers at fixed prices also determined by the petitioner. Under existing company policy, the dealers must
remit to the petitioner the proceeds of their sales within a designated credit period, which would either be 38 days for IGSs or 52 days
for IBMs, counted from the day the said dealers acquired the merchandise from the petitioner.

Cynthia Rey (respondent), at the time of her dismissal from employment, or on June 25, 1996, held the position of Credit
Administration Supervisor or CAS at the Cagayan de Oro City branch of the petitioner. While respondent was still working in Butuan
City, she allegedly instructed the Accounts Receivable Clerk of the Cagayan de Oro outlet, to change the credit term of one of the IBMs
of the petitioner, who happens to be respondent’s sister-in-law, from the 52-day limit to an "unauthorized" term of 60 days. The
respondent made the instruction, just before the computer data for the computation of the Service Fee accruing to Ms. Rey-Petilla was
about to be generated. Ms. Mendoza then reported this allegedly unauthorized act of respondent to her Branch Operations Manager,
Mr. Villagracia. Acting on the report, as the petitioner alleges, BOM Villagracia discreetly verified the records and discovered that it
was not only the 52-day credit term of IBM Rey-Petilla that had been extended by the respondent, but there were several other IBMs
whose credit terms had been similarly extended beyond the periods allowed by company policy. BOM Villagracia then summoned the
respondent and required her to explain the unauthorized credit extensions.

On the basis of the hearing, the alleged voluntary admissions of respondent, and the findings of the auditor’s report, the petitioner, on
June 25, 1996, formally dismissed the respondent for breach of trust and confidence.

Issue: Whether or not the petitioner validly terminated respondent’s employment on the ground of loss of trust and confidence.

Ruling:
Contrary to the findings of the NLRC and the CA, the Court holds that respondent was dismissed for a just cause.

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Loss of confidence as a just cause for dismissal is premised on the fact that an employee concerned holds a position of trust and
confidence. This situation applies where a person is entrusted with confidence on delicate matters, such as the custody, handling, or
care and protection of the employer’s property. But, in order to constitute a just cause for dismissal, the act complained of must be
"work-related," such that the employee concerned is unfit to continue working for the employer.

The nature of her work requires a substantial amount of trust and confidence on the part of the employer. Being the Credit
Administration Supervisor of the Cagayan de Oro and Butuan City branches of the petitioner, respondent occupied a highly sensitive
and critical position and may thus be dismissed on the ground of loss of trust and confidence. Clearly, respondent’s position involves a
high degree of responsibility requiring trust and confidence. The position carried with it the duty to observe proper company
procedures in the fulfillment of her job, as it relates closely to the financial interests of the company. Respondent’s unauthorized
extensions of the credit periods of the dealers are prejudicial to the interest of the petitioner and bear serious financial implications

Well-settled is the rule that separation pay shall be allowed only in those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on her moral character. Inasmuch as the reason for which the respondent was
validly separated involves her integrity, which is required for the position of Credit Administration Supervisor, she is not worthy of
compassion as to deserve separation pay for her length of service.

Galaxie Steel Workers Union vs. NLRC

G.R. No. 165757. October 17, 2006

Facts:
Respondent Galaxie Steel Corporation (Galaxie) is a corporation engaged in the business of manufacturing and sale of re-bars and
steel billets which are used primarily in the construction of high-rise buildings. On account of serious business losses which occurred
in 1997 up to mid-1999 totaling around P127,000,000.00, Galaxie decided to close down its business operations.

Galaxie thus filed on July 30, 1999 a written notice with the Department of Labor and Employment (DOLE) informing the latter of its
intended closure and the consequent termination of its employees effective August 31, 1999. And it posted the notice of closure on the
corporate bulletin board

Galaxie thus filed on July 30, 1999 a written notice with the Department of Labor and Employment (DOLE) informing the latter of its
intended closure and the consequent termination of its employees effective August 31, 1999. And it posted the notice of closure on the
corporate bulletin board. Petitioners Galaxie Steel Workers Union and Galaxie employees filed a complaint for illegal dismissal, unfair
labor practice, and money claims against Galaxie.

Issue: Whether or not there was a valid termination of employment of petitioners due to closure on account of serious losses.

Ruling:
In this case, the Labor Arbiter, the NLRC, and the Court of Appeals were unanimous in ruling that Galaxie’s closure or cessation of
business operations was due to serious business losses or financial reverses, and not because of any alleged anti-union position. This
Court finds no reason to Respecting petitioners’ claim for separation pay, modify such finding.

Where, the closure then is due to serious business losses, the Labor Code does not impose any obligation upon the employer to pay
separation benefits. Explaining the policy distinction in Article 283 of the Labor Code, this Court, in Cama v. Joni’s Food Services, Inc.,
declared:16

The Constitution, while affording full protection to labor, nonetheless, recognizes "the right of enterprises to reasonable returns on
investments, and to expansion and growth." In line with this protection afforded to business by the fundamental law, Article 283 of
the Labor Code clearly makes a policy distinction. It is only in instances of "retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business losses or financial reverses" that employees
whose employment has been terminated as a result are entitled to separation pay. In other words, Article 283 of the Labor Code does
not obligate an employer to pay separation benefits when the closure is due to serious losses. To require an employer to be generous
when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer. Ours is a
system of laws, and the law in protecting the rights of the working man, authorizes neither the oppression nor the self-destruction of
the employer
Finally, with regard to the notice requirement, the Labor Arbiter found, and it was upheld by the NLRC and the Court of Appeals, that
the written notice of closure or cessation of Galaxie’s business operations was posted on the company bulletin board one month prior
to its effectivity. The mere posting on the company bulletin board does not, however, meet the requirement under Article 283 of
"serving a written notice on the workers." The purpose of the written notice is to inform the employees of the specific date of
termination or closure of business operations, and must be served upon them at least one month before the date of effectivity to give
them sufficient time to make the necessary arrangements. Nevertheless, the validity of termination of services can exist
independently of the procedural infirmity in the dismissal. After analyzing the consequences of the divergent doctrines on
employment termination, the Court held that in cases involving dismissals for cause, but without observance of statutory due process,
the better rule is to abandon the Serrano doctrine and to follow Wenphil by declaring that the dismissal was for cause but imposing
sanctions on the employer. By so doing, dispensing justice not just to employees but to employers as well is achieved.
Under the facts and circumstances attendant to the case, this Court finds the amount of P20,000 in nominal damages sufficient to
vindicate each petitioner’s right to due process.

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Sy vs. Metrobank
GR No. 160618. November 2, 2006

Facts:
Petitioner Dennis D. Sy, as the branch manager in Bajada, Davao City, of respondent Metropolitan Bank and Trust Company.

Under the bank’s Retirement Plan, an employee must retire upon reaching the age of 55 years or after rendering 30 years of service,
whichever comes first. Sy would have rendered 30 years of service by August 18, 1999. However, on February 5, 1999, he was
reappointed as branch manager for a term of one year starting August 18, 1999 until August 18, 2000. His monthly compensation was
accordingly increased from P50,400 to P54,500, effective August 16, 1999.

Meanwhile, on November 10 and 15, 1999, the bank released the results of the audit conducted in its Bajada branch. The bank alleged
that Sy allowed spouses Gorgonio and Elizabeth Ong to conduct "kiting" activities in their account with the bank. Thus, the bank
placed Sy under preventive suspension and gave him 48 hours to submit a written explanation. In response, Sy wrote a letter
explaining that he only made a wrong credit judgment. Unconvinced, the bank dismissed Sy on December 15, 1999.

Issue:
(1) Whether or not the petitioner was illegally terminated? If his dismissal was valid, would he still be entitled to retirement benefits?

Ruling:
We hold that petitioner Sy was validly dismissed on the ground of fraud and willful breach of trust under Article 282 of the Labor
Code. Records show that as bank manager, he authorized "kiting" or drawing of checks against uncollected funds in wanton violation
of the bank’s policies. It was sufficient basis for the bank to lose trust in him.

Petitioner’s conduct betrays his culpability. Shortly after the audit conducted in the Bajada branch, he tendered an "irrevocable letter
of retirement." In the said letter, he requested that his retirement be made effective December 1, 1999. Said request arouses suspicion
considering that he had previously agreed to the extension of his employment as branch manager until August 18, 2000. Petitioner’s
evident failure to offer any reasonable explanation for such sudden shift in his plans is prejudicial to his cause. As for the requirement
of due process, records show that it has been fully satisfied in the instant case. The bank had complied with the two-notice
requirement, i.e.: (a) a written notice of the cause for his dismissal to afford him ample opportunity to be heard and to defend himself
with the assistance of counsel, if he so desires; and (b) a written notice of the decision to terminate him, stating clearly the reason
therefor.

Is petitioner nevertheless entitled to retirement benefits?

Under the Labor Code, only unjustly dismissed employees are entitled to retirement benefits and other privileges including
reinstatement and backwages. Since petitioner’s dismissal was for a just cause, he is not entitled to any retirement benefit. To hold
otherwise would be to reward acts of willful breach of trust by the employee. It would also open the floodgate to potential anomalous
banking transactions by bank employees whose employments have been extended. Since a bank’s operation is essentially imbued
with public interest, it owes great fidelity to the public it deals with. In turn, it cannot be compelled to continue in its employ a person
in whom it has lost trust and confidence and whose continued employment would patently be inimical to the bank’s interest. While
the scale of justice is tilted in favor of workers, the law does not authorize blind submission to the claim of labor regardless of merit.

While the Court commiserates with petitioner who has spent with the bank the best three decades of his employable life, we find no
room to accord him compassionate justice. Records showed that he violated the bank policies prior to his compulsory retirement.
Thus, there can be no earned retirement benefits to speak of. No such provision is provided for by the Labor Code. In fact, even the
Civil Service Law imposes forfeiture of retirement benefits in valid dismissal cases.

King of Kings Transport vs. NLRC

G.R. NO 166208 JUNE 29, 2007

Facts:
Petitioner KKTI is a corporation engaged in public transportation and managed by Claire Dela Fuente and Melissa Lim. Respondent
Mamac was hired as bus conductor of Don Mariano Transit Corporation (DMTC) on April 29, 1999.

The KKTI employees later organized the Kaisahan ng mga Kawani sa King of Kings (KKKK) which was registered with DOLE.
Respondent was elected KKKK president.

Respondent was required to accomplish a “Conductor’s Trip Report” and submit it to the company after each trip. As a background,
this report indicates the ticket opening and closing for the particular day of duty. After submission, the company audits the reports.
Once an irregularity is discovered, the company issues an “Irregularity Report” against the employee, indicating the nature and details
of the irregularity. Thereafter, the concerned employee is asked to explain the incident by making a written statement or counter-
affidavit at the back of the same Irregularity Report. After considering the explanation of the employee, the company then makes a
determination of whether to accept the explanation or impose upon the employee a penalty for committing an infraction. That
decision shall be stated on said Irregularity Report and will be furnished to the employee.

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Upon audit of the October 28, 2001 Conductor’s Report of respondent, KKTI noted an irregularity. It discovered that respondent
declared several sold tickets as returned tickets causing KKTI to lose an income of eight hundred and ninety pesos. While no
irregularity report was prepared on the October 28, 2001 incident, KKTI nevertheless asked respondent to explain the discrepancy.
In his letter,[3] respondent said that the erroneous declaration in his October 28, 2001 Trip Report was unintentional. He explained
that during that day’s trip, the windshield of the bus assigned to them was smashed; and they had to cut short the trip in order to
immediately report the matter to the police. As a result of the incident, he got confused in making the trip report.

On November 26, 2001, respondent received a letter terminating his employment effective November 29, 2001. The dismissal letter
alleged that the October 28, 2001 irregularity was an act of fraud against the company. KKTI also cited as basis for respondent’s
dismissal the other offenses he allegedly committed since 1999.

On December 11, 2001, respondent filed a Complaint for illegal dismissal, illegal deductions, nonpayment of 13th-month pay, service
incentive leave, and separation pay. He denied committing any infraction and alleged that his dismissal was intended to bust union
activities. Moreover, he claimed that his dismissal was effected without due process.

In its April 3, 2002 Position Paper,[5] KKTI contended that respondent was legally dismissed after his commission of a series of
misconducts and misdeeds. It claimed that respondent had violated the trust and confidence reposed upon him by KKTI. Also, it
averred that it had observed due process in dismissing respondent and maintained that respondent was not entitled to his money
claims such as service incentive leave and 13th-month pay because he was paid on commission or percentage basis. On September
16, 2002, Labor Arbiter Ramon Valentin C. Reyes rendered judgment dismissing respondent’s Complaint for lack of merit. Affirming
the NLRC, the CA held that there was just cause for respondent’s dismissal. It ruled that respondent’s act in “declaring sold tickets as
returned tickets x x x constituted fraud or acts of dishonesty justifying his dismissal.

Issue:
Whether the Honorable Court of Appeals erred in ruling that KKTI did not comply with the requirements of procedural due process
before dismissing the services of the complainant/private respondent.

Ruling:
The petition is partly meritorious.
The disposition of the first assigned error depends on whether petitioner KKTI complied with the due process requirements in
terminating respondent’s employment; thus, it shall be discussed secondly.
Non-compliance with the Due Process Requirements

Due process under the Labor Code involves two aspects: first, substantive––the valid and authorized causes of termination of
employment under the Labor Code; and second, procedural––the manner of dismissal. In the present case, the CA affirmed the
findings of the labor arbiter and the NLRC that the termination of employment of respondent was based on a “just cause.” This ruling
is not at issue in this case. The question to be determined is whether the procedural requirements were complied with.
Art. 277 of the Labor Code provides the manner of termination of employment, thus:

Art. 277. Miscellaneous Provisions.––x x x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just
and authorized cause without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the
worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in
accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and
Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or
legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of
proving that the termination was for a valid or authorized cause shall rest on the employer.

Accordingly, the implementing rule of the aforesaid provision states:

SEC. 2. Standards of due process; requirements of notice.––In all cases of termination of employment, the following standards of due
process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee
reasonable opportunity within which to explain his side.
(b) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given
opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.
(c) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds
have been established to justify his termination. [13]

In case of termination, the foregoing notices shall be served on the employee’s last known address.[14]
To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against
them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period.
“Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees

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to enable them to prepare adequately for their defense.[15] This should be construed as a period of at least five (5) calendar days
from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or
lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and
circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice.
Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art.
282 is being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees
will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of
their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the
employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice.
Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of
termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds
have been established to justify the severance of their employment.

In the instant case, KKTI admits that it had failed to provide respondent with a “charge sheet.”[16] However, it maintains that it had
substantially complied with the rules, claiming that “respondent would not have issued a written explanation had he not been
informed of the charges against him.”[17]
We are not convinced.

First, respondent was not issued a written notice charging him of committing an infraction. The law is clear on the matter. A verbal
appraisal of the charges against an employee does not comply with the first notice requirement. In Pepsi Cola Bottling Co. v. NLRC,
[18] the Court held that consultations or conferences are not a substitute for the actual observance of notice and hearing. Also, in
Loadstar Shipping Co., Inc. v. Mesano,[19] the Court, sanctioning the employer for disregarding the due process requirements, held
that the employee’s written explanation did not excuse the fact that there was a complete absence of the first notice.

Second, even assuming that petitioner KKTI was able to furnish respondent an Irregularity Report notifying him of his offense, such
would not comply with the requirements of the law. We observe from the irregularity reports against respondent for his other
offenses that such contained merely a general description of the charges against him. The reports did not even state a company rule
or policy that the employee had allegedly violated. Likewise, there is no mention of any of the grounds for termination of employment
under Art. 282 of the Labor Code. Thus, KKTI’s “standard” charge sheet is not sufficient notice to the employee.
Third, no hearing was conducted. Regardless of respondent’s written explanation, a hearing was still necessary in order for him to
clarify and present evidence in support of his defense. Moreover, respondent made the letter merely to explain the circumstances
relating to the irregularity in his October 28, 2001 Conductor’s Trip Report. He was unaware that a dismissal proceeding was already
being effected. Thus, he was surprised to receive the November 26, 2001 termination letter indicating as grounds, not only his
October 28, 2001 infraction, but also his previous infractions.

Asian Terminal vs. NLRC

GR No. 158458. December 19, 2007

Facts:
Romeo Labrague (respondent) was a stevedore antigo employed with Asian Terminals, Inc. since the 1980's. Beginning September 9,
1993, respondent failed to report for work allegedly because he was arrested and placed in detention for reasons not related to his
work. After respondent had been absent for more than one year, Asian Terminals, Inc., through Atty. Rodolfo G. Corvite, Jr.,
(petitioners) sent him (respondent) a letter, dated December 27, 1994, at his last known address at Area H, Parola, Tondo, Manila,
requiring him to explain within 72 hours why he should not suffer disciplinary penalty for his prolonged absence. The following
month, petitioner sent respondent another notice of similar tenor.

Finally, on February 8, 1995, petitioner terminated Labrague’s employment.

Following his acquittal and release from detention, respondent reported for work on July 3, 1996 but was advised by petitioners to
file a new application so that he may be rehired. Thus, respondent filed with the NLRC a complaint for illegal dismissal, separation
pay, non-payment of labor standard benefits, damages and attorney's fees.

Issue: Whether or not there was abandonment of work on the part of the respondent to justify his dismissal from work.

Ruling:
To justify the dismissal of respondent for abandonment, petitioners should have established by concrete evidence the concurrence of
two elements: first, that respondent had the intention to deliberately and without justification abandon his employment or refuse to
resume his work; and second, that respondent performed overt acts from which it may be deduced that he no longer intended to
work.

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Absences incurred by an employee who is prevented from reporting for work due to his detention to answer some criminal charge is
excusable if his detention is baseless, in that the criminal charge against him is not at all supported by sufficient evidence. In Magtoto
v. National Labor Relations Commission as well as Pedroso v. Castro, we declared such absences as not constitutive of abandonment,
and held the dismissal of the employee-detainee invalid

Respondent herein was prevented from reporting for work by reason of his detention. That his detention turned out to be without
basis, as the criminal charge upon which said detention was ordered was later dismissed for lack of evidence, made the absences he
incurred as a consequence thereof not only involuntary but also excusable. It was certainly not the intention of respondent to absent
himself, or his fault that he was detained on an erroneous charge. In no way may the absences he incurred under such circumstances
be likened to abandonment. The CA, therefore, correctly held that the dismissal of respondent was illegal, for the absences he incurred
by reason of his unwarranted detention did not amount to abandonment.
His dismissal being illegal, respondent is entitled to backwages as a matter of right provided by law.

Smart Communications vs. Astorga

GR No. 148142, January 28, 2008

Facts:
Regina M. Astorga (Astorga) was employed by respondent Smart Communications, Incorporated (SMART) on May 8, 1997 as District
Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division (CSMG/FSD). She was receiving a monthly salary of
P33,650.00. As District Sales Manager, Astorga enjoyed additional benefits, namely, annual performance incentive equivalent to 30%
of her annual gross salary, a group life and hospitalization insurance coverage, and a car plan in the amount of P455,000.00.
In February 1998, SMART launched an organizational realignment to achieve more efficient operations. This was made known to the
employees on February 27, 1998. Part of the reorganization was the outsourcing of the marketing and sales force. Thus, SMART
entered into a joint venture agreement with NTT of Japan, and formed SMART-NTT Multimedia, Incorporated (SNMI). Since SNMI
was formed to do the sales and marketing work, SMART abolished the CSMG/FSD, Astorga’s division.

Despite the abolition of the CSMG/FSD, Astorga continued reporting for work. But on March 3, 1998, SMART issued a memorandum
advising Astorga of the termination of her employment on ground of redundancy, effective April 3, 1998. Astorga received it on
March 16, 1998.

Issue: Whether or not Astorga was validly terminated on the ground of redundancy.

Ruling:
Astorga was terminated due to redundancy, which is one of the authorized causes for the dismissal of an employee. The
characterization of an employee’s services as superfluous or no longer necessary and, therefore, properly terminable, is an exercise of
business judgment on the part of the employer. The wisdom and soundness of such characterization or decision is not subject to
discretionary review provided, of course, that a violation of law or arbitrary or malicious action is not shown.

Astorga claims that the termination of her employment was illegal and tainted with bad faith. She asserts that the reorganization was
done in order to get rid of her. But except for her barefaced allegation, no convincing evidence was offered to prove it. This Court
finds it extremely difficult to believe that SMART would enter into a joint venture agreement with NTT, form SNMI and abolish
CSMG/FSD simply for the sole purpose of easing out a particular employee, such as Astorga. Moreover, Astorga never denied that
SMART offered her a supervisory position in the Customer Care Department, but she refused the offer because the position carried a
lower salary rank and rate. If indeed SMART simply wanted to get rid of her, it would not have offered her a position in any
department in the enterprise.

Astorga also states that the justification advanced by SMART is not true because there was no compelling economic reason for
redundancy. But contrary to her claim, an employer is not precluded from adopting a new policy conducive to a more economical and
effective management even if it is not experiencing economic reverses. Neither does the law require that the employer should suffer
financial losses before he can terminate the services of the employee on the ground of redundancy.

But while tilting the scales of justice in favor of workers, the fundamental law also guarantees the right of the employer to reasonable
returns for his investment. In this light, we must acknowledge the prerogative of the employer to adopt such measures as will
promote greater efficiency, reduce overhead costs and enhance prospects of economic gains, albeit always within the framework of
existing laws. Accordingly, we sustain the reorganization and redundancy program undertaken by SMART.

However, as aptly found by the CA, SMART failed to comply with the mandated one (1) month notice prior to termination. The record
is clear that Astorga received the notice of termination only on March 16, 1998 or less than a month prior to its effectivity on April 3,
1998. Likewise, the Department of Labor and Employment was notified of the redundancy program only on March 6, 1998.

Be that as it may, this procedural infirmity would not render the termination of Astorga’s employment illegal. However, we find the
need to modify, by increasing, the indemnity awarded by the CA to Astorga, as a sanction on SMART for non-compliance with the one-
month mandatory notice requirement. We deem it proper to increase the amount of the penalty on SMART to P50,000.00.

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RB Michael Press vs. Galit

G.R. No. 153510, February 13, 2008

Facts:
On May 1, 1997, respondent was employed by petitioner R.B. Michael Press as an offset machine operator, whose work schedule was
from 8:00 a.m. to 5:00 p.m., Mondays to Saturdays, and he was paid PhP 230 a day. During his employment, Galit was tardy for a total
of 190 times, totaling to 6,117 minutes, and was absent without leave for a total of nine and a half days.

On February 22, 1999, respondent was ordered to render overtime service in order to comply with a job order deadline, but he
refused to do so. The following day, February 23, 1999, respondent reported for work but petitioner Escobia told him not to work, and
to return later in the afternoon for a hearing. When he returned, a copy of an Office Memorandum was served on him, as follows:

To : Mr. Nicasio Galit

From : ANNALENE REYES-ESCOBIA

Re : WARNING FOR DISMISSAL; NOTICE OF

HEARING

This warning for dismissal is being issued for the following offenses:

(1) habitual and excessive tardiness

(2) committing acts of discourtesy, disrespect in addressing
superiors
(3) failure to work overtime after having been instructed to
do so
(4) Insubordination - willfully disobeying, defying or
disregarding company authority

The offenses you’ve committed are just causes for termination of employment as provided by the Labor Code. You were given
verbal warnings before, but there had been no improvement on your conduct.

Further investigation of this matter is required, therefore, you are summoned to a hearing at 4:00 p.m. today. The hearing wills
determine your employment status with this company.

(SGD) ANNALENE REYES-ESCOBIA

Manager[1]

On February 24, 1999, respondent was terminated from employment. Respondent subsequently filed a complaint for illegal dismissal
and money claims before the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. IV, which was docketed
as NLRC Case No. RAB IV-2-10806-99-C. On October 29, 1999, the labor arbiter rendered a Decision,

Issue: WHETHER OR OR NOT THERE WAS AN ILLEGAL DISMISSAL

Ruling:
Respondent’s tardiness cannot be considered condoned by petitioners

Habitual tardiness is a form of neglect of duty. Lack of initiative, diligence, and discipline to come to work on time everyday exhibit
the employee’s deportment towards work. Habitual and excessive tardiness is inimical to the general productivity and business of the
employer. This is especially true when the tardiness and/or absenteeism occurred frequently and repeatedly within an extensive
period of time.

In resolving the issue on tardiness, the labor arbiter ruled that petitioners cannot use respondent’s habitual tardiness and
unauthorized absences to justify his dismissal since they had already deducted the corresponding amounts from his salary.
Furthermore, the labor arbiter explained that since respondent was not subjected to any admonition or penalty for tardiness,
petitioners then had condoned the offense or that the infraction is not serious enough to merit any penalty. The CA then supported
the labor arbiter’s ruling by ratiocinating that petitioners cannot draw on respondent’s habitual tardiness in order to dismiss him
since there is no evidence which shows that he had been warned or reprimanded for his excessive and habitual tardiness.

We find the ruling incorrect.

The mere fact that the numerous infractions of respondent have not been immediately subjected to sanctions cannot be interpreted as
condonation of the offenses or waiver of the company to enforce company rules. A waiver is a voluntary and intentional
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relinquishment or abandonment of a known legal right or privilege.[9] It has been ruled that “a waiver to be valid and effective must
be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which
legally pertains to him.”[10] Hence, the management prerogative to discipline employees and impose punishment is a legal right
which cannot, as a general rule, be impliedly waived.

Insubordination or willful disobedience

While the CA is correct that the charge of serious misconduct was not substantiated, the charge of insubordination however is
meritorious.

For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employee’s assailed conduct must
have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge.

Respondent’s excuse that he was not feeling well that day is unbelievable and obviously an afterthought. He failed to present any
evidence other than his own assertion that he was sick. Also, if it was true that he was then not feeling well, he would have taken the
day off, or had gone home earlier, on the contrary, he stayed and continued to work all day, and even tried to go to work the next day,
thus belying his excuse, which is, at most, a self-serving statement.
Due process: twin notice and hearing requirement

On the issue of due process, petitioners claim that they had afforded respondent due process. Petitioners maintain that they had
observed due process when they gave respondent two notices and that they had even scheduled a hearing where he could have had
explained his side and defended himself.

We held in Agabon v. NLRC:

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices
and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the
grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of
the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the
employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation.[15]

Under the twin notice requirement, the employees must be given two (2) notices before his employment could be terminated: (1) a
first notice to apprise the employees of their fault, and (2) a second notice to communicate to the employees that their employment is
being terminated. Not to be taken lightly of course is the hearing or opportunity for the employee to defend himself personally or by
counsel of his choice.

In view of the infirmities in the proceedings, we conclude that termination of respondent was railroaded in serious breach of his right
to due process. And as a consequence of the violation of his statutory right to due process and following Agabon, petitioners are liable
jointly and solidarily to pay nominal damages to the respondent in the amount of PhP 30,000.

School of the Holy Spirit of Q.C. vs. Taguiam

G.R. No. 165565. June 7, 2004

Facts:
Respondent Corazon P. Taguiam was the Class Adviser of Grade 5-Esmeralda of the petitioner, School of the Holy Spirit of Quezon City.
On March 10, 2000, the class president, wrote a letter to the grade school principal requesting permission to hold a year-end
celebration at the school grounds. The principal authorized the activity and allowed the pupils to use the swimming pool. In this
connection, respondent distributed the parent's/guardian's permit forms to the pupils.

Respondent admitted that Chiara Mae Federico's permit form was unsigned. Nevertheless, she concluded that Chiara Mae was
allowed by her mother to join the activity since her mother personally brought her to the school with her packed lunch and swimsuit.
Before the activity started, respondent warned the pupils who did not know how to swim to avoid the deeper area. However, while
the pupils were swimming, two of them sneaked out. Respondent went after them to verify where they were going.
Unfortunately, while respondent was away, Chiara Mae drowned. When respondent returned, the maintenance man was already
administering cardiopulmonary resuscitation on Chiara Mae. She was still alive when respondent rushed her to the General Malvar
Hospital where she was pronounced dead on arrival.
Petitioners dismis