1

Albano Bar Review Center

Manila
LABOR LAW, 2018 Bar
PRE-WEEK BULLET REMINDERS
Benedict Guirey Kato1

CODAL PROVISIONS
(P.D. 442, as Renumbered)
1
Art. 4
1.1. Liberal Interpretation Rule (LIR) and the Full Protection Clause (FPC) require that doubts arising from evidence
in labor proceedings be resolved in favor of labor.
1.2. Full Extent of LIR. All doubts and ambiguities shall be resolved in favor of the workingman if they arise from: PD 442
provisions; ORILC provisions; labor contracts; and evidence in labor proceedings.
1.3. Principle of Equipoise. When the evidence in labor cases is in equipoise, the balance must be disturbed in favor of the
employee (Hubilla v. HSY Marketing Ltd, G.R. No. 207354, 10 Jan. 2018).
1.4. Double Recovery Rule. Since the CBA provision which guarantees indemnification of the medical expenses of the covered
workers’ dependents requires payment of premiums thru salary deductions, it is an insurance policy. As such, it is governed by insurance principles,
e.g., rule against double recovery. Therefore, since the dependents used separate health insurance cards, the company cannot be required to pay
full medical expenses as it would result in double recovery. (Mitsubishi Motors Phils. Salaried Employees Union v. Mitsubishi Motors Phils. Corp., G.R.
No. 175773, 17 June 2013, J del Castillo).
1.5. “This is to certify that X was employed by this agency from 20 Nov. 1996 to 7 May 2003 as SG assigned at NPC. He was
terminated from his employment on 7 May 2003 per client’ request.” This is a “pull out” certification, not an “employment termination”
certification; hence, there is no dismissal (Canedo v. Kampilan Security & Detective Agency, 31 July 2013).

2
Art. 5
2.1. The power granted the DOLE is quasi-legislative power only, i.e., the power to implement PD 442 and other labor statutes.
2.2. D.O. 119-12, which redefines “night worker”, amends R.A. 10151 (from “mn - 5 a.m” to “10 p.m - 6:00 a.m”). However, it
is valid and should be allowed to produce legal effects until nullified pursuant to the Operative Fact Doctrine.
2.3. Despite the letter of Art. 272 (formerly Art. 259) which allows appeal by both employer and union, D.O. 40-03 limits right of
appeal to the union if the establishment is unorganized. If the Med-Arbiter automatically granted the CE petition, it means that the hotel is
unorganized because he could only do that if the establishment was unorganized. In such case, the hotel could not appeal the CE order (The
Heritage Hotel Manila, et al v. SOLE, et al., G.R. No. 172132, 23 July 2014).

3
Art. 6
An agricultural employee renders personal services and is paid wage therefor; whereas, an agricultural tenant renders personal
cultivation and is paid with a share in the harvest. The first enjoys protection under P.D. 442; whereas, the second enjoys protection under
agrarian law.

4
Art. 13(b)
4.1. Whether for profit or not, one commits illegal recruitment if he goes into a “CUTE CPA Having Cute Red Peanut “ (acts of
recruitment) without a license. Hence, passing on a job applicant to an employer, agency or employment bureau after an initial interview (Rodolfo v.
People) which is an act of “referring”, and “transporting” people to undergo medical examination in contemplation of job placement (Pp. v.
Comila) require a license. Since the definition of recruitment includes the phrase “whether for profit or not”, the prosecutor does not have to
present the receipts issued by the accused to cover the placement fees paid (Pp v. Jamilosa). Likewise, the remittance of money collected by a non-
licensee to a licensed recruiter does not justify an acquittal (Rodolfo v. People).
4.2. Non-Defenses: Lack of knowledge that husband’s passengers were his wife’s recruits amounts to defense of good
faith which cannot be invoked in criminal prosecutions involving acts mala prohibita (Pp. v. Comila); a recruitment license is prospective; hence,
it cannot be retroacted to legalize an act of recruitment committed without a license (Pp. v. Chua); 2 accused cannot evade the penalty of life
imprisonment if they recruited 6 (Pp. v. Navarra); a solo complainant is not a ground for acquittal because the phrase “two or more” is not an
element of IR but a rule of evidence only (Pp. v. Panis).
5
Arts. 34 & 38
5.1. Art. 34 (A THIFF Reports OCI)
5.2. Sec. 6, R.A. 10022 (additional prohibited acts, e.g., failure to reimburse, failure to deploy)
In a criminal prosecution for illegal recruitment based on failure to reimburse, the prosecutor does not have to present a POEA
certification that the accused is not licensed to recruit. The gravamen of the offense is the commission by any person (licensed or not) of a prohibited
act (Pp. v. Ocden).
1
Labor Arbiter (NCR), Law Professor, Bar Reviewer (ABRC, Magnificus Juris, UST, VLC), Online Bar Review Lecturer (ChanRobles), Member: UP
Law Center Panel of Experts in Labor Law; Author of “Survival Notes in Labor Law”.
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6
Arts. 40-42
Sec. 12, Art. XII, 1987 Constitution reserves Filipino labor to Filipino workers. As an exception, non-resident aliens can be employed
subject to alien employment permit (AEP). If the purpose of the non-resident alien is not gainful employment, he is not required to get an AEP.

Exempt Aliens (D.O. 186-17):

(a) Section 2
(i) All members of the diplomatic service and foreign government officials accredited by and with reciprocity
arrangement with the Ph government;
(ii) Officers and staff of international organizations of which the Ph is a member, and their legitimate spouses desiring
to work in the Ph;
(iii) Owners and representatives of foreign principals whose companies are accredited by the POEA who come to the Ph
for a limited period and solely for the purpose of interviewing Filipino applicants for overseas employment;
(iv) Foreign nationals who come to the Ph to teach, present and/or conduct research studies in universities and colleges
as visiting, exchange or adjunct professors under formal agreements between the universities or colleges in the Ph and foreign universities
or colleges; or between the Ph government and foreign governments; provided that the exemption is on reciprocal basis;
(v) Permanent resident foreign nationals and probationary or temporary resident visa holders under Sec. 13 (a-f) of the
Ph Immigration Act of 1940 and Sec. 3 of the Alien Social Integration Act of 1995 (R.A. 79170);
(vi) Refugees and stateless persons recognized by the DOJ pursuant to Art. 17 of the UN convention and Protocol
Relating to the Status of Refugees and Stateless Persons; and

(b) Section 3
(i) Members of the governing board with voting rights only and who do not intervene in the management of the
corporation or in the day-to-day operation of the enterprise;
(ii) President and Treasurer who are part-owners of the company;
(iii) Those providing consultancy services who do not have employers in the Ph;
(iv) Intra-corporate transferee who is a manager, executive or specialist as defined below in accordance with trade
agreements and who is an employee of the foreign service supplier for at least 1 continuous year employment prior to deployment to a
branch, subsidiary, affiliate or representative office in the Ph;
(iv.i) Executive. A natural person within the organization who primarily directs the management of the
organization and exercises wide latitude in decision-making and receives only general supervision or direction from higher
level executives, the board of directors, or stockholders of the business; and he does not directly perform tasks related to the
actual provision of the service/s of the organization;
(iv.ii) Manager. A natural person within the organization who primarily directs the organiza-
tion/department/subdivision and exercises supervisory and control functions over other supervisory, managerial or
professional staff. It does not include first line supervisors unless the employees supervised are professionals. It does not
include employees who primarily perform tasks necessary for the provision of the service;
(iv.iii) Specialist. A natural person within the organization who possesses knowledge on an advanced level of
expertise essential to the establishment/provision of the service and/or possesses proprietary knowledge of the organization’s
service, research equipment, technique or management. It may include, but is not limited to, members of the licensed
profession.
7
Arts. 57-81
7.1. Learner v. Apprentice (PONDACA): Period of employment; Obligation to regularize; Nature of work; effect of illegal
Dismissal; Approval by TESDA; filing of Complaint; Appeal.
7.2. Learner must file his complaint with the LA, subjet to SEnA; while apprentice must file his complaint with the RD, subject
to prior use of PAC (plant apprenticeship committee) remedy.
7.3. If illegally dismissed on the 3rd month, a learner must be reinstated and paid backwages as a regular employee; hence, the
expiration of 3 months will not bar such reliefs. In contrast, an apprentice is bound to the 6 months.
7.4. After a successful learnership, it is the obligation of the employer to regularize. In contrast, the employer of an apprentice is
not imposed such duty.

8
Arts. 82, 94, 95 & P.D. 851
8.1. Ejusdem Generis. For workers paid on task basis and those paid on purely commission basis to be excluded from the
coverage of holiday pay or HP (Art. 94) and service incentive leave or SIL (Art. 95), they must at the same time be field personnel. Both will not
get 13th month pay because their employers are exempt.
8.2. R&E Transport Case. A taxi driver is a worker paid on task basis and a field personnel at the same time. Therefore, he has
no HP and SIL. He has no 13th month pay also because his employer is exempt.
8.3. David Case. Paul Paran, a butcher paid P700 per engagement to butcher Dave’s pigs, is a worker paid on task basis. Since
he works inside the latter’s premises, hence supervised, he is not a field personnel. Therefore, he is entitled to HP and SIL. However, he has no 13 th
month pay because David is exempt (David v. Macasio, 2014).
8.4. Retirement Pay (Art. 302). If the retiree is entitled to SIL and 13th month pay, his retirement pay shall be computed
based on 22.5 days. The 15 days represent ½ of his monthly salary; the 5 is SIL; and the 2.5 is 1/12 of his 13 th month pay. If not entitled to 13th
 3

month pay, the computation shall be based on 20 days; and if not entitled to both SIL and 13th month pay, the computation shall be based on 15
days.
8.5. Backwages (Art. 294; Q. 4, Bar 2001). The economic components of the backwages of rank-and-filers and managers are
the same in that they consist of salary, allowances and benefits or their monetary equivalent. As to the components of “benefits”, however, rank-and-
filers get SIL and 13th month pay; whereas, managers do not get these benefits as a matter of law.

9
Art. 97
9.1. A stipulation that compensation shall be “talent fees” does not bar employer-employee relationship from arising. Based on
the amount of the musician’s pay, it is just a wage. A wage is remuneration “however designated” capable of being expressed in terms of money
whether on fixed basis or based on time or result of work payable under a contract of employment for work done or to be done or services rendered
or to be rendered, including the reasonable value of facilities customarily provided by the employer (Legend Hotel Manila v. Realuyo, 18 July 2012).
Payment of services based on “piece trip” does not negate EER for same reason (Felicilda v. Uy, 14 Sept. 2016).
9.2. Only unpaid wage is subject to the Double Indemnity Law (Sapio v. Undaloc Construction, 2008).
9.3. Bus drivers and conductors shall be paid mixed-compensation consisting of basic salary and performance-based commission
(D.O. 118-12). The D.O., including LTFRB Memo Circular 2012-001 requiring submission of Labor Standards Compliance Certificate as a condition for
renewal of CPC, is constitutional being a piece of social legislation to improve the working conditions of bus drivers and conductors and to protect
the public by ensuring road safety (Provincial Bus Operators Association of the Phils, et al. v. DOLE, et al., G.R. No. 202275, 17 July 2018, en banc).

10
Art. 83
10.1. Rendition of work for 2 hours only, instead of 8, does not rule out employer-employee relationship. 8 is the maximum, but it
can be reduced (Legend Hotel Manila).
10.2. Requisites of Compressed Work Week (CWW): (i) necessity; (ii) voluntariness; and (iii) temporariness.
10.3. 8 hours is the normal hours of work of talents (DOLE advisory 4-16) and provincial bus drivers and conductors (D.O. 118-12).

11
Art. 111
Extraordinary attorney’s fees cannot exceed 10%; whereas, ordinary attorney’s fees are subject to stipulation and are governed by
quantum meruit absent agreement. However, seafarers and lawyers cannot stipulate more than 10% ordinary attorney’s fees (Seafarers Protection
Act).

12
Art. 124
A wage distortion obtains when: (a) there are 2 or more wage groups assigned different pay rates as to result in a wage gap (wage
advantage); (b) the wage gap is either eliminated or seriously contracted (compressed by more than 50%); and (c) the cause of the elimination or
compression is a wage law or wage order.

13
Art. 128
13.1. Mistaken referral by the DOLE-RD of a case to the LA based on the 5K jurisdictional threshold rule does not entitle the employer
to belatedly assail continuing exercise of visitorial power during execution. It should have filed a Rule 65 petition against the SOLE when she
reversed the RD (Tiger Construction & Dev’t Corp. v. Abay, et al., 2010).
13.2. Visitorial power is exercisable over establishments, not over individual workers; hence, there is no need for complaints to be
filed. Neither are appeals to the SOLE required to be verified by all workers (Catholic Vicariate of Baguio v. Sto. Tomas, 2008).
13.3. The power to determine employer-employee relationship is co-extensive with visitorial power; hence, the RD’s factual finding
is not for the NLRC to review (Bombo Radyo, 2009).
13.4. Replacement wages can be ordered under Art. 128 based on closure of establishments or suspension of business operations for
violation of health and safety rules; provided, the closure or suspension order was issued by the RD (NAMAWU v. Marcopper, 2008).
13.5. Motion to reduce appeal bond is a prohibited motion (D.O. 183-16).
13.6. Appeal period is 10 days and appeal shall be taken to the SOLE.
13.7. Jurisdiction is acquired thru the service of a Notice of Inspection which may be prompted by complaint (complaint inspection)
or self-initiation (routine inspection).
13.8. There must be an express factual finding of employer-employee relationship; otherwise, the RD/SOLE’s decision is void because
EER is the bedrock of exercise of visitorial power and no less than Sec. 14, Art. VIII of the Constitution requires that a judgment must contain facts and
applicable law (South Cotabato Communication Corp. v. Hon. Sto. Tomas, 15 June 2016)

14
Art. 129
14.1. The basis of the 5K jurisdictional threshold rule is “aggregate individual money claims”, excluding damages and attorney’s
fees.
14.2. Jurisdiction is acquired thru the filing of a verified complaint.
14.3. Appeal to the NLRC must be perfected within 5 days.
14.4. There is filing of motions to reduce appeal bond.
 4

15
Art. 132 (R.A. 10151)
15.1. A night worker is one required to render not less than 7 consecutive hours of work between 10:00 p.m. and 6:00 a.m. the
following day (as redefined by D.O. 119-12) except FAMIS workers (Fishing industry, Agriculture, Marine Industry, Inter-island Navigation & Stock
raising).
15.2. No person shall be assigned to night work unless medically cleared as fit for night work. On medical grounds, a night worker
shall be transferred to a similar job for which he is fit.
15.3. Women Night Workers’ Rights:
(a) Right to alternative work before and after childbirth for a period of at least 16 weeks – which shall be divided
between the time before and after childbirth;
(b) Additional period for alternative work if medically required as necessary for the health of mother or child. During
said period, she shall not be dismissed except for a just or authorized cause; and she shall not lose her status,
seniority and right to promotion.
16
Art. 134
16.1. Art. 134 is violated when there is singling out of women which amounts to direct discrimination (disparate
treatment); otherwise, the indirect discrimination (disparate impact) would be a violation of the Full Protection Cause (Star Paper Case,
2006). No Couples Policy is not lawful, unless it amounts to a bona fide occupational qualification (BFOQ).
16.2. The BFOQ character of a qualification (no marriage) is evaluated based on: (a) legitimacy of its business purpose; (b)
connection to the position of the employee; and (c) ability to enhance the employee’s productivity.

17
Art. 135
Absences which are pregnancy-related, even if the dates on which a pregnant employee was absent do not correspond to the dates on her
explanatory medical certificates, do not amount to gross and habitual neglect of duty (Del Monte Phils. v. Lolita Velasco, G.R. No. 153477, 6 March
2007) .

18
Art. 153
18.1. Types of industrial homework:
(a) Industrial homework which arises when a principal delivers goods, articles or materials to a homeworker for
purpose of fabrication or processing; subject to the duty of the latter to deliver the finished products to the former or distribute them in
accordance with his instructions – subject to the right of the worker to compensation, as well as the right of the employer to reject the
work or order it to be redone; and
(b) Industrial homework which arises when the principal sells goods, articles or materials to a homeworker for
processing or fabrication - whereby the latter sells the finished products to the former.

18.2. Rights (D.O. 5, s. 1995)

(a) Right to compensation; and
(b) As provided for by D.O. 5-95: self-organization, security of tenure, and SSS coverage.
19
Art. 157
The employer is not required to hire nurses and doctors as regular employees to comply with the duty to provide medical services to its
employees. They can be engaged on retainership basis only( Singco, et al. v. Shangri-Las Mactan Island Resort, et al., 4 March 2009 ).

20
Art. 167
Invocation of Art. 161 (now Art. 167) in a claim for moral and exemplary damages based on alleged commission of tortious acts
amounting to violation of Art. 161 does not give the LA jurisdiction over said claims. Per material allegations and prayer for relief, the claim is for
the regular court to determine (Tolosa v. NLRC, 10 April 2003).

21
Art. 218
Q
(a) What is the principle of co-management?
(b) Is there a legal basis for its observance in the Philippines?
A
(a) Co-management is codetermination, or the principle of allowing workers to determine business policy and to run
the business with its owner.
(b) There is no legal basis for its observance in the Philippines. Neither Sec. 3, Art. XIII of the Constitution allows it
because the participation which it guarantees is the opposite of codetermination; nor does Art. 218 of the Labor Code allow it because the
participation it guarantees is no more than that guaranteed by the Constitution.

22
Art. 219
 5

22.1. Employer includes one acting in the interest of an employer, directly or indirectly (par. e); however, the solidary liability of a
corporate officer is determined with Sec. 31, Corporation Code and not with Art. 219(e).
22.2. Employee includes one whose work has ceased as a result of or in connection with a current labor dispute or ULP; however,
to be able to exercise labor relations rights (e.g., to vote in a CE), he must contest his dismissal before a forum of appropriate jurisdiction (VA if there
is an express stipulation in the CBA; otherwise, LA).
22.3. Labor Dispute .... “regardless of whether the disputants stand in the proximate relation of employer and employee”; hence,
there can be a labor dispute over which a labor tribunal has jurisdiction even outside employer-employee relationship (e.g., intra-union and inter -
union disputes).
22.4. Labor Organization ... “exists in whole or in part for the purpose of collective bargaining or dealing with the employer
concerning terms and conditions of employment.” Managers can organize for mutual aid and protection, but not for purposes of collective bargaining
or dealing with the employer. AIM Faculty Association filed a CE petition; hence, AIM moved to dismiss the petition and filed a CR cancellation
based on the union’s all-manager membership (AIM v. AIM Faculty Association, G.R. No. 207971, 23 Jan. 2017). However, the issue of WON said
members are really managers is still being determined in G.R. No. 197089 which was commenced by the cancellation case.

23
Art. 229 vs. Art. 230
23.1. Sugarsteel Industrial Inc., et al. v. Albina, et al., G.R. No. 168749, 6 June 2016. The grounds for appeal under Art. 229
need not be stated word for word in the appeal memorandum. The grounds “not supported by evidence” and “contrary to the facts obtaining” are
equivalent to the first (prima facie abuse of discretion) and last (serious errors in the findings of facts) grounds stated under the provision.
23.2. Reinstatement. If ordered by the LA or VA, Art. 229 does not require a writ of execution because it is immediately
executory. However, if ordered on appeal, a writ of execution is required by Art. 230.
Significance: There is no refusal to reinstate if reinstatement is ordered on appeal and no writ of execution has been issued;
hence, reinstatement wages cannot be ordered.
23.3. VA’s reinstatement order is immediately executory also because it is based on same Art. 229 which is a Full Protection
provision (Baronda v. CA, G.R. No. 161006, 14 Oct. 2015).

24
Arts. 259 & 260
24.1. Violation of CBA
(a) To be a ULP, the violation must be of the economic provisions; hence, if what is violated is the Grievance Machinery
provision or Union Security Clause (political provisions), there is no ULP.
(b) For the LA to have jurisdiction, the violation of the economic provision/s must be gross and flagrant.
24.2. EER is an element of ULP except under Art. 260 when the victim is a worker or union membership. The reason is the
violator is a labor organization, not the employer.

25
Art. 266 (No Injunction)
25.1. Principle of the Strong Arm of Equity
25.2. Rule XII, 2011 NLRC Rules of Procedure
25.3. Art. 278 (Doctrine of Great Breadth of Discretion; Incidental Jurisdiction).

26
Art. 267
For purpose of collective bargaining, the workers shall be represented by the EBR/SEBA. However, a group of workers can directly bring
grievances to the employer. It does not follow, however, that any union (group of workers) can serve a notice to arbitrate on the employer. This is
the exclusive right of the EBR/SEBA (Tabigue v. Interco, G.R. No. 183335, 23 Dec. 2009).

27
Arts. 268-269
27.1. A CE is valid if (i) it is not barred; and (ii) majority of the eligible voters cast their votes.
27.2. The CE winner is the union (including No Union) which garners majority vote based on the valid votes.
27.3. Run-off Election shall be conducted if the CE fails to produce an EBR based on these conditions:
(a) The CE is valid;
(b) 3/more participants (including No Union);
(c) None got majority vote based on the valid votes;
(d) Total votes garnered by the unions (excluding No Union) is at least 50% of the votes cast; and
(e) There is no election contest that can materially alter the CE result.
27.4. Re-run election is one conducted when there is failure of CE as when less than majority cast their votes; or when the CE is
attended by irregularities.

28
Art. 272
28.1. Art. 272 allows both employer and EBR to appeal a CE order; however, D.O. 40-03 distinguished between organized
establishment (OE) and unorganized establishment (UE). If OE, both can appeal; if UE, only the EBR can appeal.28.2. In the Manila Legend
Hotel, J Bersamin ruled that an employer cannot move to dismiss a CE petition (Standby Rule) and cannot appeal (why?). This was because the hotel
was a UE as implied by the fact that the Med-Arbiter automatically granted the CE petition. This he could do only if the establishment is UE.
 6

29
Art. 276
Old Rule. Period of appeal from VA to CA is 10 days (Phil. Electric Co. v. CA, G.R. No. 16812, 10 Dec. 2014; Baronda v. CA, G.R. No.
161006, 14 Oct. 2015).

New Rule: Period to file MR is 10 days. If MR is denied, appeal to CA shall be filed within 15 days (Guagua National Colleges v.
CA, et al., en banc, G.R. No. 188492, 28 Aug. 2018).

30
Art. 278(g)
30.1. Exception to Art. 266 (No Injunction Policy)
30.2. Characteristics of Assumption Power
30.3. Governing Principles
(a) Doctrine of Great Breadth of Discretion
(b) Incidental Jurisdiction

31
Arts. 292-299
31.1. Guarantees of Art. 292 (formerly art. 277): self-organization; statutory due process; workers shall not be assessed docket
fees in labor standards disputes; and the SOLE’s suspension power.
31.2. Art. 294 (formerly Art. 279) does not limit security of tenure to regular employees; it simply provides that regular
employees can only be dismissed for a just or authorized cause; the logical consequences of illegal dismissal are immediate reinstatement and full
backwages; if reinstatement is ordered by the LA/VA, there is no need for a writ of execution to enforce it; the components of backwages are salary,
allowances and benefits or their monetary equivalent; benefits shall include SIL and 13th month pay if the illegally dismissed employee is entitled
thereto.
31.3. Art. 295 (formerly Art. 280) is not an EER test; it only distinguishes between regulars and casuals; as exceptions to the
“usually necessary or desirable” rule, fixed-term employment, project-based employment, and seasonal employment are listed.
31.4. Art. 296 (formerly Art. 282) places 6 months as maximum probationary period; the period can be shortened or prolonged by
mutual agreement; the grounds for termination re just or authorized cause; failure to qualify; after the probationary period, the employee cannot
demand regularization as a matter of right; the provision does not cover teachers in the private sector.
31.5. Art. 297 (formerly Art. 282). Just causes are listed causes for dismissal and imply fault or culpability on the employee’s
part; however, even an unlisted cause can justify a dismissal if it is similar to any of the listed causes, in which case it is called an analogous cause;
violation of pre-termination procedure for fault-based dismissals requires assessment of P30K nominal damages; circumstances may justify
adjustment;
31.6. Art. 298 (formerly Art. 283). Authorized causes are business performance -based grounds for dismissal; the dismissed
employee is not at fault; hence, if the 30-day notice is violated, the penalty is P50K nominal damages; the amount can be adjusted as required by the
circumstances; number of claimants, capacity to pay, effort at compliance, and giving of benefits.
31.7. Art. 299 (formerly Art. 283). Continuing employment cannot be denied based on a sick employee’s failure to submit a
medical clearance; only a medical certificate issued by a competent public health authority that he suffering from a disease of such nature or at such
stage that it is incurable in 6 months even with adequate medical attention can justify his dismissal.

32
Arts. 300-301
32.1. Overt Act Test. The operative act in constructive dismissal is the employee’s act of quitting for a just cause; just causes
are SICO (serious insult, inhuman and unbearable treatment, crime/offense and other analogous causes); the SICO act is the overt act of dismissal,
absent which the self-termination is either a resignation or abandonment;
32.2. Resignation vs. Constructive Dismissal. Resignation is a voluntary relinquishment of job when personal reasons cannot
be sacrificed in favour of the exigencies of the employer’s business; whereas, constructive dismissal is a forced relinquishment of job effected thru
the employer’s act of placing the employee in a situation that leaves him no option except to quit.
32.3. Abandoment vs. Constructive dismissal. Abandonment is a self-termination that is deduced from the employee’s
unjustifiable refusal to render service and commission of an overt act from which his intent not to resume work can be deduced; whereas,
constructive dismissal is a quitting because continued employment has been rendered impossible, unreasonable or unlikely by the employer.

33
Art. 302
33.1. Retirement Pay: 22.5 x Daily Salary x Length of Service
33.2. Arts. 82 & 95 (PD 851). The 22.5 comes from ½ month salary (15 days), SIL (5 days) and 1/12 of 13th month pay (2.5
days); the 15 will always be given; however, whether to give the 5 (SIL) depends on whether or not the retiree is entitled to SIL (see Art. 82); and
whether to give the 2.5 (13th month pay) depends on whether or not the retiree is entitled to 13th month pay (see P.D. 851); all employees in all
establishments, whether for profit or not, are entitled to SIL – except if employee No. 9 (Less Than 10 Rule), receiving the equivalent of SIL, and the
employer enjoys exemption; all land-based rank-n-file employees are entitled to 13th month pay – except managers, supervisors, those receiving
equivalent 13th month pay, and workers whose employers are exempt, viz., “ workers paid on task basis” and “workers paid on purely commission
basis.”
33.3. Retirement Age: in general (60-65); underground/surface miner (50-60); licensed racehorse jockey (55)
 7

34
Art. 306
34.1. Reckoning Date. The 3-year prescriptive period shall be counted from the date the money claim became a legal possibility,
or day it could be judicially brought, e.g., date of discovery of the illegal salary deductions (Virgilio Anabe v. Asian Construction, et al., G.R. No.
183233, 23 Dec. 2009).
34.2. Curious Animal. As a curious animal, service incentive leave (SIL) does not prescribe like other money claims (Autobus
Transport System, Inc. v. Bautista, G.R. No. 156367, 16 May 2005).
34.3. Twenty-five (25) SILs. SIL prescribes in 3 years but differently as follows:
(a) Monetization Option (2nd Option). From date of demand for payment.
(b) Commutation Option (3rd Option). From date of retirement, resignation or termination.
If filed within 3 years from constructive dismissal, it is not barred as to allow the employee to get all her 25
commuted SILs. (Lourdes Rodriguez v. Park N Ride, et al., G.R. No. 222980, 20 March 2017 ).

2017
DECISIONS
(Dean Albano’s Compilation)
1
Dagasdas v. Grand Placement General Services Corp.
G.R. No. 205727, 18 January 2017, J Del Castillo

Probationary Employee; Dismissal

A probationary employee can be terminated if he fails to qualify pursuant to reasonable standards made known to him at the
time of his engagement. If dismissed for cause, he must be accorded due process. Here, no prior notice of the purported infraction and
such opportunity to explain any accusation against him was given. He was simply given a notice of termination. In fact, it appears that ITM
intended not to comply with the twin-notice requirement in that, under the new contract, ITM reserved in its favor the right to terminate
the contract without serving any notice to Dagasdas in specified cases, which included such situation where the employer decides to
dismiss the employee within the probationary period. Without doubt,
2
Panaligan, et al. v. Phyvita Ent. Corp.
G.R. No. 202086, 21 June 2017

KIP Breach vs. CHIT Breach

Loss of trust and confidence to be a valid cause for dismissal must be wor- related such as would show the employee concerned
to be unfit to continue working for the employer, and it must be based on a willful breach of trust and founded on clearly established
facts. Such breach is willful if it is done intentionally, knowingly , and purposely (KIP), without justifiable excuse as distinguished from an
act done carelessly, thoughtlessly, heedlessly or inadvertently (CHIT). The loss of trust and confidence must spring from the voluntary or
willful act of the employee, or by reason of some blameworthy act or omission on the part of the employee.
3
Brown v. Marswin Marketing Inc., et al.
G.R. No. 206891, 15 March 2017, J Del Castillo

Burden to Proof
Thus, in order for the employer to discharge its burden to prove that the employee committed abandonment, which constitutes
neglect of duty and is a just cause for dismissal, the employer must prove that the employee (1) failed to report for work or had been
absent without valid reason; and (2) had a dear intention to discontinue his or her employment. The second requirement must be
manifested by overt acts and is more determinative in concluding that the employee is guilty of abandonment. This is because
abandonment is a matter of intention and cannot be lightly presumed from indefinite acts.
4
Rodriguez v. Park N Ride, Inc., et al.
G.R. No. 222980, 20 March 2017

Constructive Dismissal
The unreasonably harsh conditions that compel resignation on the part of an employee must be way beyond the occasional
discomforts brought about by the misunderstandings between the employer and employee. Strong words may sometimes be exchanged as
the employer describes her expectations or as the employee narrates the conditions of her work environment and the obstacles she
encounters as she accomplishes her assigned tasks. As in every human relationship, there are bound to be disagreements... However, when
these strong words from the employer happen without palpable reason or are expressed only for the purpose of degrading the dignity of
the employee, then a hostile work environment will be created. In a sense, the doctrine of constructive dismissal has been a consistent
vehicle by the Court to assert the dignity of labor
5
Panaligan, et al. v. Pyvita Ent., Corp.
G.R. No. 202086, 21 June 2017

Serious Misconduct
Misconduct is improper or wrong conduct; it is the transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. The misconduct, to be serious
 8

within the meaning of the Labor Code, must be of such a grave and aggravated character and not merely trivial or unimportant. Thus, for
misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the performance of the
employee's duties; and (c) it must show that the employee has become unfit to continue working for the employer.
6
Maula v. Ximex Delivery Express, Inc.
G.R. No. 207838, 25 Jan. 2017

Two Facets of Dismissal; Substantial Evidence

Dismissal from employment have two facets: first, the legality of the act of dismissal, which constitutes substantive due process;
and, second, the legality of the manner of dismissal, which constitutes procedural due process. The burden of proof rests upon the
employer to show that the disciplinary action was made for lawful cause or that the termination of employment was valid. In
administrative and quasi-judicial proceedings, the quantum of evidence required is substantial evidence or "such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion." Thus, unsubstantiated suspicions, accusations, and conclusions of the
employer do not provide legal justification for dismissing the employee. When in doubt, the case should be resolved in favor of labor
pursuant to the social justice policy of our labor laws and the 1987 Constitution.

The following are the guiding principles in connection with the hearing requirement in dismissal cases:

(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written)
given to the employee to answer the charges against him and submit evidence in support of his defense, whether in
a hearing, conference or some other fair, just and reasonable way.
(b) a formal hearing or conference becomes mandatory only when requested by the employee in
writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar
circumstances justify it.
(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing
or conference" requirement in the implementing rules and regulations (Perez, et al. v. Phil. Telegraph and
Telephone Co., et al., 602 Phil. 522, 537-542 [2009]).
7
Sumifru (Phils.) Corp. v. Baya
G.R. No. 188296, 17 April 2017

Floating Status
Respondent should have deployed petitioner to a specific client within six (6) months from his last assignment. The
correspondences allegedly sent to petitioner merely required him to explain why he did not report to work. He was never assigned to a
particular client. Thus, even if petitioner actually received the letters of respondent, he was still constructively dismissed because none of
these letters indicated his reassignment to another client. Unlike in Ecoxet Security and JFLP Investigation, respondent is guilty of
constructive dismissal because it never attempted to redeploy petitioner to a definite assignment or security detail.

Strained Relationship
"Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to
reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the employee from what could
be a highly oppressive work environment. On the other hand, it releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust."Thus, it is more prudent that the employee be awarded separation pay,
instead of being reinstated, as computed by the CA.
8
Spectrum Security Services, Inc. v. Grave, et al.
G.R. No. 196650, 7 June 2017

Abandonment
The security guards intended to sever their employer-employee relationship with the petitioner because they applied for and
obtained employment with other security agencies while they were on reserved status. Their having done so constituted a clear and
unequivocal intent to abandon and sever their employment with the petitioner. Thereby, the filing of their complaint for illegal dismissal
was inconsistent with the established fact of their abandonment
9
Manggagawa ng Komunikasyon sa Pilipinas v. PLDT
G.R. No. 190383, April 18, 2017

Redundancy
While a declaration of redundancy is ultimately a management decision in exercising its business judgment, and the employer
is not obligated to keep in its payroll more employees than are needed for its day-to-day operations, management must not violate the law
nor declare redundancy without sufficient basis. . . To establish good faith, the company must provide substantial proof that the services of
the employees are in excess of what is required of the company, and that fair and reasonable criteria were used to determine the
redundant positions.
 9

Separation Pay v. Retirement Benefits

Separation pay is required in the cases enumerated in Articles 283 and 284 of the Labor Code, which include retrenchment, and
is computed at, at least one month salary or at the rate of one-half month salary for every month of service, whichever is higher. We have
held that it is a statutory right designed to provide the employee with the wherewithal during the period that he is looking for another
employment. Retirement benefits, where not mandated by law, may be granted by agreement of the employees and their employer or as a
voluntary act on the part of the employer. Retirement benefits are intended to help the employee enjoy the remaining years of his life,
lessening the burden of worrying for his financial support, and are a form of reward for his loyalty and service to the employer.

Reinstatement Order v. Return-to-Work Order

The award of reinstatement, including backwages, is awarded by a Labor Arbiter to an illegally dismissed employee pursuant to
Article 294 (formerly Art. 279) of the Labor Code: If actual reinstatement is no longer possible, the employee becomes entitled to
separation pay in lieu of reinstatement. On the other hand, a return-to-work order is issued by the Secretary of Labor and Employment
when he or she assumes jurisdiction over a labor dispute in an industry that is considered indispensable to the national interest. Article
278(g) of the Labor Code provides that the assumption and certification of the Secretary of Labor and Employment shall automatically
enjoin the intended or impending strike. Return-to-work and reinstatement orders are both immediately executory; however, a return-to-
work order is interlocutory in nature, and is merely meant to maintain status quo while the main issue is being threshed out in the proper
forum. In contrast, an order of reinstatement is a judgment on the merits handed down by the Labor Arbiter pursuant to the original and
exclusive jurisdiction provided for under Article 224(a)of the Labor Code. Clearly, Garcia is not applicable in the case at bar, and there is
no basis to reinstate the employees who were terminated as a result of redundancy.
10
Valencia v. Classique Vinyl Products Corp., et al.
G.R. No. 206390, 30 January 2017, Del Castillo, J

Labor Only Contracting and Project Employee

In labor-only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the
employees of the labor-only contractor as if such employees had been directly employed by the principal employer. The principal employer
therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees.
11
Herma Shipyard, Inc., et al. v. Oliveros, et al.
G.R. No. 208936, 17 April 2017, Del Castillo, J

Project Employee Test

The principal test in determining whether particular employees were engaged as project-based employees, as distinguished
from regular employees, is whether they were assigned to carry out a specific project or undertaking, the duration and scope of which was
specified at, and made known to them, at the time of their engagement. It is crucial that the employees were informed of their status as
project employees at the time of hiring and that the period of their employment must be knowingly and voluntarily agreed upon by the
parties, without any force, duress, or improper pressure being brought to bear upon the employees or any of other circumstances vitiating
their consent.

DSI Within v. DSI Not Within

The fact that the job is usually necessary or desirable in the business operation of the employer does not automatically imply
regular employment; neither does it impair the validity of the project employment contract stipulating a fixed duration of employment. As
the Court held in AL U-TUCP v. National Labor Relations Commission:

In the realm of business and industry, we note that 'project' could refer to one or the other of at least
two (2) distinguishable types of activities. Firstly, 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. The typical example of this first type of project is a particular construction job or project of a
construction company. A construction company ordinarily carries out two or more discrete identifiable construction
projects: e.g., a twenty-five-storey hotel in Makati; a residential condominium building in Baguio City; and a
domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these separate projects,
the scope and duration of which has been determined and made known to the employees at the time of
employment, are properly treated as 'project employees,' and their services may be lawfully terminated at
completion of the project.

The term 'project' could also refer to, secondly, 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. The job or undertaking also begins and ends at
determined or determinable times.

Here, while the tasks assigned to the respondents were indeed necessary and desirable in the usual business of Herma
Shipyard, the same were distinct, separate, and identifiable from the other projects or contract services.
 10

12
Herma Shipyard, Inc., et al. v. Oliveros, et al.
G.R. No. 208936, 17 April 2017, Del Castillo, J

Not Engaged in Building & Selling Ships

Considering the nature of business of the employer, it is clear that it only hired workers when it has existing contracts for
shipbuilding and repair. It is not engaged in the business of building vessels for sale which would require it to continuously construct
vessels for its inventory and consequently hire a number of permanent employees. Hence, Herma Shipyard is allowed “to reduce its work
force into a number suited for the remaining work to be done upon the completion or proximate accomplishment of each particular
project. As for respondent, since they were assigned to a project or a phase thereof which begins and ends at determined or determinable
times, their services were lawfully terminated upon the completion of such project or phase thereof.
13
UST v. Samahang Manggagawa ng UST, et al.
G.R. No. 184262, 24 April 2017

Primary Standard
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.

Totality of Circumstances
If it is apparent from the circumstances of the case "that periods have been imposed to preclude acquisition of tenurial
security by the employee," such project or fixed term contracts are disregarded for being contrary to public policy.
14
Seapower Shipping Ent. Inc. v. Heirs of Warren M. Sabanal
G.R. No. 198544, 19 June 2017

Direct Attribution Rule

Q: May a seaman’s death, which resulted from his act of jumping overboard, be considered as directly attributable to him?

A: Yes.

The term “willful” means “voluntary and intentional”, but not necessarily malicious. In the case of Macabuhay Shipping
Services, Inv. National Relations Commission, the seaman, in a state of intoxication, ran amuck and committed an unlawful aggression
against another, inflicting injury on the latter, so that in his own defense the latter fought back and in the process killed the seaman. The
circumstances of the death of the seaman could be categorized as a deliberate and willful act on his own life directly attributable to him. In
the same manner, in the instant case, the seaman’s intentionally jumping overboard, while in a state of intoxication, could be considered
as a deliberate and willful act on his own life which is directly attributable to him. Under the POEA-SEC, the employer is generally liable
for death compensation benefits when a seafarer dies during the term of employment. This rule, however, is not absolute. Part II, Section
C(6) of the POEA-SEC exempts the employer from liability if it can successfully prove that the seafarer's death was caused by an injury
directly attributable to his deliberate or willful act.
15
Dutch Movers, Inc., et al. v. Lequin, et al.
G.R. No. 210032, 25 April 2017, J Del Castillo

Liability of Stockholders

Q: During the execution stage, DMI ceased its operation, and the same did not file any formal notice regarding it.
Added to this, in their Opposition to the Motion to Implead, spouses Smith revealed that they only lent their names to petitioners, and they
were included as incorporators just to assist the latter in forming DMI; after such undertaking, spouses Smith immediately transferred their
rights in DMI to petitioners, which proved that petitioners were the ones in control of DMI, and used the same in furthering their business
interests. Are the spouses liable? Why?

A: Yes.

A corporation has a separate and distinct personality from its stockholders, and from other corporations it may be connected
with. However, such personality may be disregarded, or the veil of corporate fiction may be pierced attaching personal liability against
responsible person if the corporation's personality "is used to defeat public convenience, justify wrong, protect fraud or defend crime, or
is used as a device to defeat the labor laws x x x". (Concept Builders, Inc. v. National Labor Relations Commission, 326 Phil. 955, 965
[1996]). By responsible person, we refer to an individual or entity responsible for, and who acted in bad faith in committing illegal
 11

dismissal or in violation of the Labor Code; or one who actively participated in the management of the corporation. Also, piercing the veil
of corporate fiction is allowed where a corporation is a mere alter ego or a conduit of a person, or another corporation.

Here, the veil of corporate fiction must be pierced and accordingly, petitioners should be held personally liable for judgment
awards because the peculiarity of the situation shows that they controlled DMI; they actively participated in its operation such that DMI
existed not as a separate entity but only as business conduit of petitioners

Piercing the veil of corporate fiction is allowed, and responsible persons may be impleaded, and be held solidarily liable even
after final judgment and on execution, provided that such persons deliberately used the corporate vehicle to unjustly evade the judgment
obligation, or resorted to fraud, bad faith, or malice in evading their obligation.
16
MST Marine Services (Phil.) Inc., et al. v. Asuncion
G.R. No. 211335, 27 March 2017

Disability Benefits
The mere lapse of the 120-day period itself does not automatically warrant the payment of total and permanent disability
benefits (Tagalog v. Crossworld Marine Services, Inc., G.R. No. 191899, June 22, 2015, 759 SCRA 632). In Vergara v. Hammonia Maritime
Services, et al., 588 Phil. 895 [2008], the Court ruled that a temporary total disability becomes permanent when so declared by the
company-designated physician within the period allowed, or upon expiration of the maximum 240-day medical treatment period in case of
absence of a declaration of fitness or permanent disability.

Besides, permanent disability benefits will be given based on the schedule provided under Section 32 of the POEA-SEC. In
Scanmar Maritime Services, Inc., et al. v. Emilio Conag, G.R. No. 212382, April 6, 2016,the Court reiterated that:

[F]or work-related illnesses acquired by seafarers from the time the 2010 amendment to the POEA-SEC
took effect, the declaration of disability should no longer be based on the number of days the seafarer was treated
or paid his sickness allowance, but rather on the disability grading he received, whether from the company-
designated physician or from the third independent physician, if the medical findings of the physician chosen by
the seafarer conflicts with that of the company-designated doctor.

Moreover, while a seafarer is not precluded from seeking a second opinion or consulting his own physician, if his physician's
conclusion is contrary to that of the company-designated physician, the rule is clear that a third physician must be jointly appointed by the
employer and the seafarer for a final assessment.54 Without a third-doctor consultation and in the absence of any indication which would
cast doubt on the veracity of the company-designated physician's assessment, the company-designated physician's findings shall prevail.
17
Maula v. Ximex Delivery Express, Inc.
G.R. No. 207838, 25 January 2017

Preventive Suspension
Preventive suspension is justified where the employee's continued employment poses a serious and imminent threat to the life
or property of the employer or of the employee's co-workers. Without this kind of threat, preventive suspension is not proper. Here, it
cannot be said that petitioner posed a danger on the lives of the officers or employees of respondent or their properties. Being one of the
Operation Staff, which was a rank and file position, he could not and would not be able to sabotage the operations of respondent. The
difficulty of finding a logical and reasonable connection between his assigned tasks and the necessity of his preventive suspension is
apparent from the fact that even respondent was not able to present concrete evidence to support its general allegation.
18
Asian Institute of Management v. Asian Institute of Management Faculty Assn.
G.R. No. 207971, 23 January 2017, Del Castillo, J

Union; Cancellation of Certificate of Registration

In case of alleged inclusion of disqualified in a union, the proper procedure for an employer is to directly file a petition for
cancellation of the union’s certificate of registration due to misrepresentation, false statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as amended (Holy Child Catholic School v. Hon. Sto. Tomas, 714 Phil. 427, 453 [2013], citing
Sta. Lucia East Commercial Corporation v. Secretary of Labor and Employment, 612 Phil. 998, 1007-1008 [2009]).

Petitioner’s sole ground for seeking cancellation of respondent’s certificate of registration – that its members are managerial
employees and for this reason, its registration is thus a patent nullity for being an absolute violation of Article 245 of the Labor Code which
declares that managerial employees are ineligible to join any labor organization – is, in a sense, an accusation that respondent is guilty
misrepresentation for registering under the claim that its members are not managerial employees.
19
De La Salle Araneta Univ. v. Bernardo
G.R. No. 190809, 13 February 2017

Part-time Lecturer
For a private school teacher to acquire permanent status, viz.: (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 (St. Mary’s University v. Court of Appeals, 493
 12

Phil. 232, 237 [2005]). In addition, he must have a master’s degree (UE v. Pepanio, 2013). Bernardo was a part-time lecturer at DLS-AU,
with a fixed-term employment. As a part-time lecturer, he did not attain permanent status. Nonetheless, Bernardo did not sue for illegal
dismissal nor claim separation pay. He simply asserted his right to retirement benefits given the termination of his employment with DLS-
AU when he was already 75 years old.

Q: Since Bernardo has not been granted retirement benefits under any agreement with or by voluntary act of DLS-AU,
the next question then is, can Bernardo claim retirement benefits by mandate of any law?

A: Yes.

Republic Act No. 7641 is a curative social legislation. It precisely intends to give the minimum retirement benefits
to employees not entitled to the same under collective bargaining and other agreements. It also applies to establishments with
existing collective bargaining or other agreements or voluntary retirement plans whose benefits are Jess than those prescribed
in said law.

Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641, reads:

Art. 302 [287]. Retirement. -Any employee may be retired upon reaching the retirement age established
in the collective bargaining agreement or other applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned
under existing Jaws and any collective bargaining agreement and other agreements: Provided however, That an employee's
retirement benefits under any collective bargaining and other agreement shall not be less than those provided herein.

In the absence of retirement plan or agreement providing for retirement benefits of employees in the establishment.
an employee upon reaching the age of sixty (60) years or more, but not beyond sixty five (65) years which is hereby declared
the compulsory retirement age, who has served at least five (5) years in said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months
being considered as one whole year.

Unless the parties provide for broader inclusions, the term one-half month salary shall mean fifteen (15) days plus
one twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.

Bernardo's employment was extended beyond

the compulsory retirement age and the cause of
action for his retirement benefits accrued only
upon the termination of his extended employment
with DLSAU.

Article 306 [291] of the Labor Code mandates:

Art. 306 [291]. Money claims. - All money claims arising from employer-employee relations accruing
during the effectivity of this Code shall be filed within three years from the time the cause of action accrued;
otherwise they shall be forever barred.

Q: DLS-AU invokes UST Faculty Union v. National Labor Relations Commission, 266 Phil. 441, 448 [1990], wherein it
was held that when an employee or official has reached the compulsory retirement age, he is thereby effectively separated from the
service. And so, DLS-AU maintains that Bernardo's cause of action for his retirement benefits, which is patently a money claim, accrued
when he reached the compulsory retirement age of 65 years old, and had already prescribed when Bernardo filed his complaint only 10
years later, when he was already 75 years old. Is the contention correct? Why?

A: No.

The case of UST Faculty Union is not in point as the issue involved therein was the right of a union to intervene in the
extension of the service of a retired employee. Professor Tranquilina J. Marilio (Prof. Marilio) already reached the compulsory retirement
age of 65 years old, but was granted by the University of Sto. Tomas (UST) an extension of two years tenure. UST no longer needed to
consult the union before refusing to further extend Prof. Marilio' s tenure.

Bernardo's right to retirement benefits and the obligation of DLS-AU to pay such benefits are already established under Article
302 [287] of the Labor Code, as amended by Republic Act No. 7641. However, there was a violation of Bernardo's right only after DLS-AU
informed him on November 8, 2003 that the university no longer intended to offer him another contract of employment, and already
accepting his separation from service, Bernardo sought his retirement benefits, but was denied by DLSAU. Therefore, the cause of action for
Bernardo's retirement benefits only accrued after the refusal of DLS-AU to pay him the same, clearly expressed in Dr. Bautista's letter dated
 13

February 12, 2004. Hence, Bernardo's complaint, filed with the NLRC on February 26, 2004, was filed within the three-year prescriptive
period provided under Article 291 of the Labor Code.

DLS-AU, in this case, not only kept its silence that Bernardo had already reached the compulsory retirement age of 65 years old,
but even continuously offered him contracts of employment for the next 10 years. It should not be allowed to escape its obligation to pay
Bernardo's retirement benefits by putting entirely the blame for the deferred claim on Bernardo's shoulders.
20
GSIS v. Pauig
G.R. No. 210328, 30 January 2017

Retirement Benefits: Concept; Coverage

Retirement benefits are given to government employees to reward them for giving the best years of their lives to the service of
their country. This is especially true with those in government service occupying positions of leadership or positions requiring
management skills because the years they devote to government service could be spent more profitably elsewhere, such as in lucrative
appointments in the private sector. Hence, in exchange for their selfless dedication to government service, they should enjoy security of
tenure and be ensured of a reasonable amount of support after they leave the government.

Compulsory coverage under the GSIS had previously and consistently included regular and permanent employees, and expressly
excluded casual, substitute or temporary employees from its retirement insurance plan. A permanent appointment is one issued to a person
who has met the requirements of the position to which appointment is made, in accordance with the provisions of the Civil Service Act and
the Rules and Standards, while temporary appointment is made in the absence of appropriate eligibles and it becomes necessary in the
public interest to fill a vacancy. Casual employment, on the other hand, is not permanent but occasional, unpredictable, sporadic and brief
in nature. Based on the records, Pauig began his career in the government on February 12, 1964 as Emergency Laborer on a casual status.
Then, he became a temporary employee from July 5, 1972 to July 18, 1977. However, the Court notes that it was not until 1997 that the
compulsory membership in the GSIS was extended to employees other than those on permanent status. Her casual and temporary service
must necessarily be excluded from the creditable period for retirement purposes.
21
Wesleyan Univ. of the Phils. v. Maglaya, Sr.
G.R. No. 212774, 23 January 2017

Jurisdiction Over Corporate Officers

It is apparent from the By-laws of WUP that the president was one of the officers of the corporation, and was an honorary
member of the Board. He was appointed by the Board and not by a managing officer of the corporation. One who is included in the by-laws
of a corporation in its roster of corporate officers is an officer of said corporation and not a mere employee.

The alleged "appointment" of Maglaya instead of "election" as provided by the by-laws neither converted the president of
university to a mere employee, nor amended his nature as a corporate officer. With the office specifically mentioned in the by-laws, the
NLRC erred in taking cognizance of the case, and in concluding that Maglaya was a mere employee and subordinate official because of the
manner of his appointment, his duties and responsibilities, salaries and allowances.
A corporate officer's dismissal is always a corporate act, or an intracorporate controversy which arises between a stockholder
and a corporation, and the nature is not altered by the reason or wisdom with which the Board of Directors may have in taking such action
. The issue of the alleged termination involving a corporate officer, not a mere employee, is not a simple labor problem but a matter that
comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code.

The long-established rule is that the jurisdiction over a subject matter is conferred by law. Perforce, Section 5 (c) of PD 902-A,
as amended by Subsection 5.2, Section 5 of Republic Act No. 8799, which provides that the regional trial courts exercise exclusive
jurisdiction over all controversies in the election or appointment of directors, trustees, officers or managers of corporations, partnerships
or associations, applies in the case at bar.
22
Chateau Royale Sports and Country Club, Inc. v. Balba, et al.
G.R. No. 197492, 18 January 2017

Transfer of Employee
In the resolution of whether the transfer of the employees from one area of operation to another was valid, finding a balance
between the scope and limitation of the exercise of management prerogative and the employees' right to security of tenure is necessary.
The Court has to weigh and consider, on the one hand, that management has a wide discretion to regulate all aspects of employment,
including the transfer and re-assignment of employees according to the exigencies of the business; and, on the other, that the transfer
constitutes constructive dismissal when it is unreasonable, inconvenient or prejudicial to the employee, or involves a demotion in rank or
diminution of salaries, benefits and other privileges, or when the acts of discrimination, insensibility or disdain on the part of the
employer become unbearable for the employee, forcing him to forego her employment.

Having expressly consented to the foregoing, the respondent had no basis for objecting to their transfer. According to Abbot
Laboratories (Phils.), Inc. v. National Labor Relations Commission, No. L-76959, October 12, 1987, 154 SCRA 713, 719, the employee who
has consented to the company’s policy of hiring sales staff willing to be assigned anywhere in the Philippines as demanded by the
employer’s business has no reason to disobey the transfer order of management. Verily, the right of the employee to security of tenure
 14

does not give her a vested right to her position as to deprive management of its authority to transfer or re-assign her where she will be
most useful.
23
C.J.M. Mission Seminaries School of Theology, Inc., et al. v. Perez
G.R. No. 220506, 18 January 2017

Backwages: Computation
In the event the aspect of reinstatement is disputed, backwages, including separation pay, shall be computed from the time of
dismissal until the finality of the decision ordering the separation pay. In Gaco v. NLRC, 300 Phil. 261 [1994],it was ruled that with respect
to the payment of backwages and separation pay in lieu of reinstatement of an illegally dismissed employee, the period shall be reckoned
from the time compensation was withheld up to the finality of this Court's decision.

The reason for this was explained in Bani Rural Bank, Inc. v. De Guzman., 721 Phil. 84 [2013].When there is an order of
separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or subsequently ordered in light of a supervening
event making the award of reinstatement no longer possible), the employment relationship is terminated only upon the finality of the
decision ordering the separation pay. The finality of the decision cuts-off the employment relationship and represents the final settlement
of the rights and obligations of the parties against each other. Hence, backwages no longer accumulate upon the finality of the decision
ordering the payment of separation pay because the employee is no longer entitled to any compensation from the employer by reason of
the severance of his employment. One cannot, therefore, attribute patent error on the part of the CA when it merely affirmed the NLRC's
conclusion, which was clearly based on jurisprudence.

2016
DECISIONS
(Sourced from UP Law Center)
1
Alma Covita v. SSM Maritime Services, Inc.
G.R. No. 206600, 7 Dec. 2016

Seafarer is a Contractual Employee

A seafarer is governed by the contract he signs everytime he is rehired and his employment is terminated when his contract
expires.
2
Peninsula Employees Union v. Michael Esquivel, et al.
G.R. No. 218454, 1 Dec. 2016

Agency Fee
The union’s right to agency fee is neither contractual nor statutory, but quasi-contractual, deriving from the established
principle that non-union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by the
bargaining union.
3
Marina’s Creation Enterprises, et al. v. Romeo Ancheta
G.R No. 218333, 7 Dec. 2016

Medical Termination
Non-submission of a fit-to-work certificate after illness does not justify denial of work. The ORILC allows medical termination on
the basis only of a medical certificate issued by a competent public health authority that the employee’s disease is of such nature or at such
stage that it is incurable in 6 months even with adequate medical attention.
4
Buenaflor Car Services, Inc. v. Cesar David Jr.
G.R. No. 222730, 7 Nov. 2016

Purchase Orders; Loss of Trust & Confidence

The spurious purchase orders commenced the procurement process. Said purchase orders had to be approved by the Service
Manager, David, Jr. before the delivery and payment process could even commence. Hence, being the approving authority, he cannot
disclaim culpability in the resultant issuance of the questioned checks. Only substantial evidence is required to establish the basis of loss of
trust and confidence.
5
Philippine Auto Components, Inc. v. Ronnie Jumadla, et al.
G.R. Nos. 218980 & 219124, 28 Nov. 2016

Loss of Trust & Confidence;

Qualified Theft; Substantial Evidence
The employees were charged with the delicate task of ensuring the safety, proper handling and distributing of company
products, e.g., radiator fans. Hence, a high degree of honesty and responsibility was required and expected of them. Being managers, i.e.,
for being officers or members of the managerial staff, they could be terminated for loss of trust and confidence based on substantial
 15

evidence of the pilferage, i.e., sworn statements of apprehended employees who acted on the complainant’s instructions, delivery receipts,
police blotter, police certification, photographs of the stolen radiator fan assembly units, resolution of the City Prosecutor finding a prima
facie case of qualified theft, and the information for qualified theft.

6
Gerino Yukit, et al. v. Tritran, Inc.
G.R. No. 184841, 21 Nov. 2016

Closure; Serious Business Losses

Substantial business losses (serious) must be proven with financial statements duly certified by an independent external
auditor. Although no separation pay should be paid owing to proof of closure with substantial evidence of serious business losses, the
employer voluntarily assumed the obligation to pay; hence, it must be ordered to pay it.

7
Dee Jay’s Inn Cafe, et al. v. Lorina Rañeses
G.R. No. 191825, 5 Oct. 2016

Abandonment: Burden of Proof

It is the burden of the employee to prove the fact of her dismissal before the employer can be burdened with the duty to justify
it. The employer never raised abandonment as a defense as there was no dismissal in the first place. It did not argue that the employee
abandoned her work which justified her dismissal. It merely alleged the fact that she, after being scolded, no longer returned to work.

8
Sonedco Workers Free Labor Union (SWOFLU),
et al. v. Universal Robina Corp., Sugar Division –
Southern Negro’s Dev’t Corp. (SONEDCO).
G.R. No. 220383, 5 Oct. 2016

ULP; CBA provision in print.

6 May 2002 - SONEDCO and PACIWU entered into a CBA for 2002-2006.

17 May 2002- SWOFLU won the CE and replaced PACIWU. The latter questioned the CE result. Meantime, the company refused to
collectively bargain with SWOFLU.

6 Dec. 2006- Although it was still the EBR, SWOFLU filed a CE petition in view of the impending expiration of the 2002-2006 CBA.

28 Aug. 2007- Still without a CBA with SWOFLU, the company offered financial benefits to its workers on condition that they
signed a waiver to the effect that, in case of a new CBA, it shall take effect starting 1 January 2008 only. It explained that said waiver would
prevent double compensation.

20 Aug. 2008- SWOFLU won the CE. It demanded to collectively bargain with the company. Finally, a CBA for January 2009-
December 2013 was perfected.

2 July 2009- Workers who refused to sign the waiver sued the company for ULP. Allegedly, the waiver violated their right to
self-organization, collective bargaining and concerted activity. The LA dismissed the complaint; the NLRC affirmed; and the CA
dismissed the workers petition for certiorari.

Held: The company committed ULP when it refused to collectively bargain with SWOFLU on the basis of the 2002-2006 CBA. That
CBA, in view of the filing of the CE petition, was to apply temporarily only; hence, its refusal amounted to ULP under Art. 259, LC, although
– as wrongly argued by the company – the workers’ right to self-organization was not violated.

As to the continuing payment of the 2007 financial benefits, they cannot be carried over to the 2009-2013 CBA. Hence, they
cannot be demanded under said CBA because only printed provisions can be implemented. At any rate, the new CBA provides for salary
increases already.

9
Geraldine Michelle Failarme, et al. v.
San Juan de Dios Educational Foundation, et al.
G.R. Nos. 190015 & 190019, 14 Sept. 2016

Teachers: Regularization Requisites

While the LC provides general rules as to probationary employment, they are supplemented by the Manual of Regulations for
Private Schools (MRPS) as follows: (a) full-time teaching; (b) 3 years/ 6 consecutive semesters; and (c) satisfactory service (Note: 4th is
master’s degree, 2013 UE v. Pepanio Ruling).
 16

10
Mario Felicilda v. Manchester Uy
G.R. No. 221241, 14 Sept. 2016

Wage
While the compensation was determined on a “per trip” or commission basis, such did not negate employer-employee
relationship. The definition of wage in Art. 97, LC, includes the phrase “however designated.”
11
Atty. Marcos D. Risonar, Jr. v. Cor Jesu College, et al.
G.R. No. 198350, 14 Sept. 2016

Automatic Renewal of Law Dean’s

Fixed-Term Employment Contract
Non-service of 30-day notice and allowing a Law Dean to continue acting as such beyond the date of expiry of his contact
indicates intent of the employer to renew. A contrary interpretation would render inutile the self-imposed contractual duty to serve notice
of non-renewal. If there be any ambiguity in the contract, Art. 1377, NCC, provides that the party who prepared it should not be favored.
12
Jakerson Gargallo v. DOHLE Seafront Crewing (Mla), et al.
G.R. No. 215551, 17 Aug. 2016

Solidary Liability of Corporate Officers

Corporate officers are solidarily liable with their corporations for 2 reasons: (a) it is imposed by Sec. 10, R.A. 8042 (now Sec. 7,
R.A. 10022); and (b) the manning agent corporation is deemed to have submitted a verified undertaking by its officers and directors that
they will be jointly and severally liable with the company over claims arising from EER when it applied for a license to operate a seafarer’s
manning agency as required by the POEA-SEC.
13
Holcim Phils., Inc. v. Renante Obra
G.R. No. 220998, 8 Aug. 2016

Harsh Penalty
Dismissal for theft is harsh under these circumstances: the employee took a piece of wire and tried to bring it outside company
premises under the belief that same was for disposal already; the company never denied that the wire was of no value already; after
discovery, the employee returned it; hence, the company suffered no loss; and the employees showed remorse.
14
Antonio Valeroso, et al. v. Skycable Corp.
G.R. No. 202015, 13 July 2016

Control
As account executives whose task was to solicit cable subscriptions, complainants claim employee status based on an
employment certification issued by the Territory Manager; 2001-2006 payslips showing payment of commissions and allowance; and
guidelines.

There is no EER. The certification was an accommodation to allow the complainants to apply for loans and credit cards, and it
does not specify the true nature of their engagement. The alleged guidelines simply pertained to updates on new promos, new price
listings, meetings and trainings of new account executives, imposition of quotas, penalties, and giving commendations for meritorious
performance – not to means and methods of performance.
15
Rowena Santos v. Integrated Pharmaceutical, Inc.
G.R. No. 204620, 11 July 2016

Padding of Expense Report

The first memo charged expense report padding. The notice of termination stated different infractions of which the employee
was not notified, viz., habitual tardiness, insubordination, and dishonesty.

Past offenses may be taken into consideration in imposing the appropriate penalty. However, due process is violated.
16
Sugarsteel Industrial Inc., et al. v. Victor Albina, et al.
G.R. No. 168749, 6 June 2016

Corrective Jurisdiction; Grounds for Appeal

Even if the factual findings of the LA and NLRC are uniform, the CA can review the evidence when warranted by the
circumstances, e.g., said findings are not it accordance with the evidence on record and the applicable law and jurisprudence, because the
NLRC is not infallible.
 17

The NLRC’s dismissal of the employer’s appeal – which was grounded on its submittal that the LA’s decision was “not
supported by evidence” and was “contrary to the facts obtaining.” – on the ground that it was not based on any of the grounds specified
by Art. 223 (now Art. 229), LC, amounted to grave abuse of discretion. The enumeration of the grounds for an appeal need not be exactly
followed. The employer’s articulation of its ground for reversal is contemplated by the first and last grounds listed under Art. 229. At any
rate, the decision affirmed by the NLRC which awarded separation pay based on ½ month salary despite the finding of a valid dismissal
contravened the law.

17
South Cotabato Communication Corp.v. Hon. Sto. Tomas
G.R. No. 217575, 15 June 2016

Visitorial Power; Employer-Employee Relationship

The exercise of visitorial power rests on employer-employee relationship. The RD/SOLE must make an express finding of its
existence; otherwise, it cannot exercise visitorial power or the power to order the rectification of labor standards law violations. Moreover,
Sec. 14, Art. VIII of the Constitution requires courts to express clearly and distinctly the facts and law on which decisions are based. Here,
both RD and SOLE made no factual findings at all.

18
Divine Word College of Laoag (DWCL) v. Shirley Mina, as Substitute of the Late Delfin Mina
G.R. No. 195155, 13 April 2016

Portability Clause; Retirement Pay;

Backwages and Separation Pay
The Society of Divine Word Educational Association, under SVD which ran DWCLaoag, established a Retirement Plan which
contained the following portability clause:
When a member, who resigns from an Participating Employer and who is employed by another
Participating Employer, the member will carry the credit he earned under his former Participating Employer to his
new Employer and the length of Service in both will be taken into consideration in determining, his total years of
continuous service on the following conditions:
a. The transfer is approved by both the Participating Employer whose service he is leaving and
the new Participating Employer;
b. The Retirement Board is notified of the transfer; and
c. The member is employed by another Participating Employer on the next working day
following his resignation.
In 1971, Delfin Mina was hired by the Academy of St. Joseph (ASJ) as a highschool teacher; in 1979, he transferred to DWCL; in
2003, he was unlawfully transferred (hence, constructively dismissed); in 2004, he was offered early retirement; invoking the portability
provision, he asked that his 8 years with the ASJ be added to his 25 years (he requested that his retirement be adjusted to September 2004
in order to avail of the 25-year benefits); his request having been denied, he sued for constructive dismissal; in June 2005, he died on the
case.
How much is Mina’s:
(a) Backwages
(b) Separation Pay; and
(c) Retirement Pay
As to backwages, the computation shall be from date of constructive dismissal (1 June 2003) to actual reinstatement or
finality of judgment.
As to separation pay, the computation shall be from date of hiring by DWCL(1979) to date of death (2005), or 26 years.
As to retirement pay, the computation shall be from 1979 (not 1971 because he did not comply with portability conditions)
to date of retirement/death).

Note: The CA erroneously computed backwages from 1979 (instead of date of constructive dismissal which was 2003) to date
of death (2005).
19
Industrial Personnel & Management Services, Inc., et al. v. Jose de Vera, et al.
G.R. No. 205703, 7 March 2016

Lex Loci Celebrationis

Philippine laws apply even to overseas employment contracts by force of Sec. 3, Art. XIII of the Constitution (Full Protection
Clause).
As exception, the parties may agree that a foreign law shall govern the employment contract, subject to these conditions:
1. It must be expressly stipulated that a specific foreign law shall apply;
2. The foreign law invoked must be proven pursuant the Philippine-rules on evidence;
3. The foreign law must not be contrary to law, morals, good customs, public order or public policy in the
Philippines; and
4. The employment must be processed thru the POEA.
 18

20
Alumamay Jamias, et al., v. NLRC, et al.
G.R. No. 159350, 9 March 2016

Evidence Aliunde;
Project Employment; Fixed-Term Contracts
The fixing by the employer of the period specified in the employment contracts do not indicated ill-motive to circumvent
security of tenure. It cannot be presumed that the fixing of the 1-year term was intended to evade or avoid the protection to tenure under
Art. 280 (now Art. 295), LC, in the absence of other evidence establishing such intention. This presumption must be based on some other
aspect of the contract other than its fixed-term, or on evidence aliunde of the intent to evade.
21
Universal Robina Sugar Milling Corp. v. Elmer Albay, et al.
G.R. No. 218172, 16 March 2016

The Helpful Employees

The employees committed misconduct when they assisted the Sheriff in effecting levy on their employer’s forklift and
depositing same with the municipal hall for safekeeping in order to finally collect the balance of their unpaid claims. However, their
misconduct is not serious absent intent to gain or wrongful intent. They were just impelled, although wrongly, by their belief that they
were merely facilitating enforcement of a favorable decision in a labor standards case. Hence, a penalty less punitive than a dismissal
should have been imposed.
22
Manila Memorial Park Cemetery Inc. v. Ezard D. Lluz, et al.
G.R. No. 208451, 3 Feb. 2016

Substanitial Capital or Investment

The Contract of Services provides that Ward Trading has substanitial capital or investment, as well as adequate workers.
However, the CS contains stipulations indicating otherwise, such as: Manila Memorial retained the right to control the performance of the
employees concerned; the contractor shall purchase ₱1.4M worth of equipment belonging to the principal but no actual sale took place
because the contractor realized income of ₱53K only from its business; the contractor shall store subject equipment inside the principal’s
premises where it shall hold office also; and, in case of poor performance, the principal shall take over the work.
23
Arlene T. Samonte, et al. v. La Salle Greenhills, Inc., et al.
G.R. No. 199683, 10 Feb. 2016

Inconsistent Defenses
Independent contractor defense is inconsistent with fixed-term employee defense. The first is a non-employee, whereas the
second is an employee. Therefore, based on these inconsistent defenses, employer-employee relationship is deemed admitted.
24
Albert Austria v. Crystal Shipping Inc., et al.
G.R No. 206256, 24 Feb 2016

Theory of Aggravation
Every workingman brings with him to his employment certain infirmities, and while the employer is not the insurer of the
health of his employees, he takes them as he finds them, and assumes that risk of having the weakened condition aggravated by some
injury which might not hurt or bother a perfectly normal, healthy person. The degree of contribution of the employment to the worsening
of the seafarer’s condition is not significant to the compensability of the illness.

The employer argues that “Dilated Cardiomyopathy, Biscupid Aortic Stenosis” is congenital and is not caused or aggravated by
the working conditions of a Chief Cook. Moreover, PEME is non-exploratory; hence, the seafarer cannot argue that he could have developed
his disease owing to his working conditions. This argument must be rejected. The seafarer is a Chief Cook as to be exposed to heat all
throughout the day. The steady and prolonged exposure to heat naturally causes exhaustion which could unduly burden his heart and
interfere with the normal functioning of his cardio-vascular system.

Even assuming the disease is congenital, pre-existence of a disease does not bar compensability because disability laws still
grant compensation as long as working conditions have contributed even in a small measure to the aggravation thereof.
25
Lorelei Iladan v. La Suerte Int’l Manpower Agency, Inc., et al.
G.R. No. 203882, 11 Jan. 2016

Resignation Letter;
Intimidation as Vice of Consent

To vitiate consent, the following must be present:

(a) The intimidation caused the consent to be given;

(b) The threatened act must be unjust or unlawful;
 19

(c) The threat must be real or serious, there being evident disproportion between the evil and the resistance which all men
can offer, leading to the choice of doing the act which is forced on the person to do as the lesser evil; and
(d) It produces a well-grounded fear from the fact that the person from whom it comes has the necessary means or ability to
inflicit to his person or property.
The employee executed a resignation letter in her own handwriting. She also accepted ₱35K as financial assistance and
executed an Affidavit of Release, Waiver and Quitclaim and an Agreement, as settlement and waiver of any cause of action against the
employer. The waiver and settlement were subscribed before the Labor Attache and duly authenticated by Philippine Consulate.
26
Emma Quiro-Quiro v. Balagtas Credit Cooperative & Communication Dev’t, Inc.
G.R. No. 209921, 13 Jan. 2016

Execution Pending Appeal

Unless execution is enjoined by the CA, the NLRC’s decision attains finality after 10 days from receipt by counsel thereof; hence,
the LA can issue the writ of execution motu proprio or on motion (Sec.14, Rule VII and Sec.1 Rule XI, respectively, of the NLRC Rules of
Procedure)
Before the NLRC’s decision declaring the dismissal as illegal could be reversed by the CA, a writ of execution was issued by the
LA. In view thereof, the employer offered to pay the judgment award. Based on said offer, the employee argued before the SC that there was
an offer of compromise which put an end to the litigation (as to make her the ultimate winner). But the SC did not regard the offer to
satisfy judgment as an offer of compromise. Due to the employee’s motion for issuance of the writ, the employer was forced to satisfy the
judgment.
_________________

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