Labor Law 1 A2010 - 37 - DisiniDMA SHIPPING PHILS INC V CABILLAR

452 SCRA 551CALLEJO, SR; February 28, 2005

NATUREPetition for Review

FACTS- Henry Cabillar was hired by Monsoon, through DMA Shipping, as Chief Officer of the M/V Eagle Moon.- After three (3) months, Cabillar wrote the manager of Monsoon, requesting for an early repatriation and for his reliever grounded on the failure of DMA Shipping to give the promised additional allowance. Monsoon approved an increase in Cabillars wage and the latter withdrew his request for repatriation.- While the vessel was docked in India, the gantry crane operators refused to work and demanded for an increase in their allowance. The master of the M/V Eagle Moon instructed Cabillar to talk to the crew members under his immediate supervision to convince them not to proceed with the intended strike and have the matter discussed with the management when the vessel returns to Singapore.- Instead of talking to the crew members, Cabillar himself joined the strike. Monsoon expressed its displeasure on Cabillar for joining the strike. Nevertheless, Monsoon agreed to the demands of the striking crew members to avert any further losses.- When the vessel arrived at Singapore, officers of Monsoon informed Cabillar that he has been separated from his employment because of the incident in Calcutta.- Cabillar filed a complaint with the POEA against DMA and Monsoon seeking payment for the unexpired portion of his contract.- The Executive Labor Arbiter rendered a decision in favor of Cabillar declaring his dismissal as illegal. The NLRC and the Court of Appeals affirmed. Hence this petition.

ISSUES1. WON the respondent was dismissed by the petitioner Monsoon and2. If so, WON his dismissal was for a valid cause3. WON the respondent is entitled to backwages, damages and attorneys fees

HELD1. Petitioner was dismissed.Ratio WON the respondent was dismissed or that he resigned as chief officer of the vessel is a question of fact. The labor arbiter ruled that the respondent was dismissed. The NLRC and the Court of Appeals affirmed. Petitioners failed to make a clear showingthat the findings were are arbitrary and bereft of any rational basis.Reasoning- The entry in the logbook of the vessel shows that the ship captain, for and in behalf of the petitioners, dismissed the respondent for joining the strike.- The petitioners failed to adduce documentary evidence to prove their allegation that (1) they and the respondent agreed that in consideration for the respondents resignation, they would give him a very good rating (2) they defrayed his plane fare back to the Philippines (3) they paid for his hotel bills in Singapore. 2. Respondent was dismissed for just cause.Ratio Under their employment contracts, the crew and officers of the vessel bound themselves to follow certain procedures for their grievances.Reasoning- The crew and the respondent refused to follow the procedure and stop the strike.

- They may have a valid grievance against the petitioners but they are bound to follow the procedures set forth in their contracts of employment to address said grievances.3. Petitioners are to pay indemnity.Ratio The petitioners themselves violated their contracts of employment with the respondent and the crew because the captain of the vessel failed to comply with the disciplinary procedures.Reasoning- The respondent was not furnished with any written notice of any charges against him.- There was no formal investigation of the charges.- Respondent was not furnished with a copy of the written notice of the penalty imposed on him.- For such violation, petitioners are liable for moral damages or for indemnity of P30,000, if the respondent fails to prove such moral damages.1 In this case, the respondent failed to prove such moral damages.Disposition AFFIRMED with MODIFICATION. Petitioners are

ordered to pay P30,000by way of indemnity. The awards for other damages and

attorneys fees are deleted.

UY V BUENO484 SCRA 628

PUNO; March 14, 2006

NATUREPetition for review on certiorari of a decision of the CA

FACTS- Amalia Bueno was the Manager of Countrywide Rural Bank of La Carota, Inc. (bank hereafter) Marbel Branch. She was verbally and summarily dismissed by Atty. Andrea Uy, interim President and Corporate Secretary of the bank, during a depositors' meeting.- Bueno filed a case for illegal dismissal and prayed for reinstatement with full backwages and damages.

ISSUEWON Uy is an officer of the bank, making her soldarily liable with the corporation for illegal dismissal

HELDNO- The minutes of the depositors' meeting clearly showed that Uy was a mere depositor of the bank. She was only elected as officer of the Interim Board of Directors craeted by the association of depositors with the sole task of rehabilitating the bank (which is under receivership).- There is no evidence that the association of depositors that elected the interim board was recognized by BSP. Hence, it had no legal authority to act for the bank.- The act of dismissing Bueno by Uy cannot be deemed as an act as an officer of the bank. Consequently, it cannot be held that there existed an employer-employee relationship between Uy and Bueno.- The requirement of employer-employee relationship is jurisdictional for the provisions of the Labor Code on Post-employment to apply. Since such relationship was not established, the labor arbiter never acquired jurisdiction over Uy.Disposition CA decision finding Uy solidarily liable with the bank reversed

CABRERA V NLRC (NATIONAL SERVICE CORPORATION, VILLAMOR)

198 SCRA 5731 Agabon v. NLRC, G.R. No. 158693, 442 SCRA 573, Nov. 17, 2004.

Labor Law 1 A2010 - 38 - DisiniCRUZ; June 27, 1991

NATUREAppeal from the decision of the NLRC dismissing the complaint for illegal dismissal by the petitioners on the ground that it is without jurisdiction.

FACTS- Dismissed by the National Service Corporation, the petitioners complained to the Ministry of Labor and Employment on September 17, 1980. After considering the position papers of the parties, the Labor Arbiter ordered the petitioners' reinstatement without loss of seniority rights and the payment to them of two years back wages and other benefits. 3 The decision was appealed to and affirmed by the First Division of the NLRC on December 9, 1985, and in due time, the petitioners moved for the issuance of a writ of execution. This was opposed by NASECO on the ground that it had not been furnished with a copy of the decision, but the opposition was rejected and the petition was granted. Reconsideration of the order having been denied, the NASECO appealed to the NLRC, which, through its Third Division this time, declared itself without jurisdiction and dismissed the case on August 18, 1987. 4 Citing the NHA case, the public respondent held that the NASECO was not covered by the Labor Code but by Civil Service rules and regulations, being a government-owned or controlled corporation.

ISSUEWON the National Service Corporation is covered by the Labor Code

HELDYES- The decision in National Housing Corporation v. Juco was already overturned by the decision in National Service Corporation v. NLRC. The NLRC erred in dismissing the petitioners' complaint for lack of jurisdiction because the rule now is that only government-owned or controlled corporations with original charters come under the Civil Service. The NASECO having been organized under the Corporation Law and not by virtue of a special legislative charter, its relations with its personnel are governed by the Labor Code and come under the jurisdiction of the National Labor Relations Commission.

GAMUGAMO V PNOC SHIPPING AND TRANSPORT CORP

381 SCRA742DAVIDE JR; May 7, 2002

NATURESpecial Civil Action in the Supreme Court. Certiorari

FACTS- On January 23,1963, petitioner Cayo Gamogamo was employed with the Department of Health as Dental Aide (wherein he was also promoted to the position of Dentist 1). He remained employed at the DOH for 14 years until he resigned on November 2, 1977. - On November 9, 1977, petitioner was hired as a company dentist by Luzon Stevedoring Corporation (LUSTEVECO). Subsequently, respondent PNOC Shipping and Transport Corp acquired and took over the shipping business of LUSTEVECO. Petitioner was among those who opted to be absorbed by the respondent. He continued to work as a company dentist.- ON June 10,1993, President Fidel V. Ramos issued a memorandum approving the privatization of PNOC subsidiaries, including respondent pursuant to the provisions of Section III (B) of the Guidelines and Regulations to implement E.O. No. 37. Respondent implemented a Manpower Reduction Program to govern employees whose respective positions have been classified as redundant (respondent decreased its operations

and downsized its organization due to lay up and sale of its vessels.- Sometime in 1995, petitioner requested to be included in the next retrenchment schedule. However, his request was turned down because: 1.) he was holding a permanent position 2.) he was already due for mandatory retirement in April 1995 under his retirement plan. Eventually petitioner retired after serving respondent for 17 years and 4 mos. He received a retirement pay which is equivalent to one month pay for every year of service and other benefits (P512,524.15)- On August 30,1995, respondents president died and was replaced by Nemesio Prudente who implemented significant cost-saving measures. He ordered that a study on the cost-effect of the retrenchment of employees be conducted (upon motion of 2 other employees, Dr. Rogelio Buena (company doctor) and Mrs. Luz C. Reyes (telephone operator) who were holding permanent/non-redundant positions. These 2 employees were retrenched and paid a 2-month separation pay for every year of service under Respondents Manpower Reduction Program.- In view of the action taken by respondent in the retrenchment of the said 2 employees, petitioner filed a complaint at the NLRC for the full payment of his retirement benefits. Petitioner argued that his service with the DOH should have been included in the computation of his years of service. Hence, with an accumulated service of 32 years he should have been paid a 2-month pay for every year of service per the retirement plan (and thus should have received at least P1,833,920)- The Labor Arbiter dismissed petitioners complaint. On appeal however, the NLRC reversed the decision of the Labor Arbiter (considering the 14 years of his service to DOH)- Respondent filed with the CA a special civil action for certiorari. CA set aside the judgment of the NLRC. Hence, petitioner filed this petition alleging that 1.) his years of service with the DOH must be considered as creditable service for the purpose of computing his retirement pay 2.) he was discriminated against in the application of the Manpower Reduction Program.

ISSUEWON, for the purpose of computing an employees retirement pay, prior service rendered in a government agency can be tacked in and added to the creditable service later acquired in a government-owned and controlled corporation without original charter.

HELDNO- Petition denied and the appealed decision in CA is affirmed (in favor of respondent)Ratio The Court cannot uphold petitioners contention that his 14 years of service with the DOH should be considered because his last 2 employers were government-owned and controlled corporations and fall under the Civil Service Law. Article IX (B), Section 2 paragraph 1 of the 1987 Constitution states: The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government owned or controlled corporations with original charters. While respondent and LUSTEVECO are government-owned and controlled corporations, they have no original charters; hence, they are not under the Civil Service LawReasoning - totalization of service credits is only resorted to when the retiree does not qualify for benefits in either of both systems. In this case, petitioner is qualified to receive benefits granted by the GSIS, if such right has not yet been exercised. - It may also be pointed out that upon his receipt of the amount of P512,524.15 from respondent as retirement benefit pursuant to its retirement scheme, petitioner signed and delivered to respondent a release and undertaking wherein he waives all actions, causes of actions, debts, dues, monies and accounts in connection with his employment with respondent. This

Labor Law 1 A2010 - 39 - Disiniquitclaim releases respondent from any other obligation in favor of petitioner.

LIGHT RAILWAY TRANSIT AUTHORITY V VENUS485 SCRA 301

PUNO; March 24, 2006

FACTS- consolidated petitions of Light Rail Transit Authority (LRTA) and Metro Transit Organization, Inc. (METRO), seeking the reversal of the Decision of the Court of Appeals directing them to reinstate private respondent workers to their former positions without loss of seniority and other rights and privileges, and ordering them to jointly and severally pay the latter their full back wages, benefits, and moral damages. The LRTA and METRO were also ordered to jointly and severally pay attorneys fees equivalent to ten percent (10%) of the total money judgment.- Petitioner LRTA is a government-owned and controlled corporation created by Executive Order No. 603, Series of 1980, as amended, to construct and maintain a light rail transit system and provide the commuting public with an efficient, economical, dependable and safe transportation. Petitioner METRO, formerly Meralco Transit Organization, Inc., was a qualified transportation corporation duly organized in accordance with the provisions of the Corporation Code, registered with the Securities and Exchange Commission, and existing under Philippine laws. petitioner LRTA, after a bidding process, entered into a ten (10)-year Agreement for the Management and Operation of the Metro Manila Light Rail Transit System from June 8, 1984 until June 8, 1994 with petitioner METRO.- The Agreement provided, among others, that

4. METRO shall be free to employ such employees and officers as it shall deem necessary in order to carry out the requirements of [the] Agreement. Such employees and officers shall be the employees of METRO and not of the AUTHORITY [LRTA]. METRO shall prepare a compensation schedule and the corresponding salaries and fringe benefits of [its] personnel in consultation with the AUTHORITY [LRTA] [par. 3.05];

- On July 25, 2000, the Union filed a Notice of Strike with the National Conciliation and Mediation Board National Capital Region against petitioner METRO on account of a deadlock in the collective bargaining negotiation. On the same day, the Union struck. They completely paralyzed the operations of the entire light rail transit system. As the strike adversely affected the mobility of the commuting public, then Secretary of Labor Bienvenido E. Laguesma issued on that same day an assumption of jurisdiction order [3] directing all the striking employees to return to work immediately upon receipt of this Order and for the Company to accept them back under the same terms and conditions of employment prevailing prior to the strike- Despite the issuance, posting, and publication of the assumption of jurisdiction and return to work order, the Union officers and members failed to return to work. Thus, effective July 27, 2000, private respondents, were considered dismissed from employment- Workers filed a complaint for illegal dismissal. On October 1, 2001, Labor Arbiter Luis D. Flores rendered a consolidated judgment in favor of the private respondent workers- On May 29, 2002, on appeal, the NLRC found that the striking workers failed to heed the return to work order and reversed and set aside the decision of the labor arbiter. The suit against LRTA was dismissed since LRTA is a government-owned and controlled corporation created by virtue of Executive Order No. 603 with an original charter and it ha[d] no participation whatsoever with the termination of complainants employment. In fine, the cases against the LRTA and METRO

were dismissed, respectively, for lack of jurisdiction and for lack of merit.- On a petition for certiorari however, the Court of Appeals reversed the NLRC and reinstated the Decision rendered by the Labor Arbiter. Public respondent appellate court declared the workers dismissal as illegal, pierced the veil of separate corporate personality and held the LRTA and METRO as jointly liable for back wages.

ISSUEWON LRTA should be held liable for the illegal dismissal of employees

HELDNO- petitioner LRTA argues that it has no employer-employee relationship with private respondent workers as they were hired by petitioner METRO alone pursuant to its ten (10)-year Agreement for the Management and Operation of the Metro Manila Light Rail Transit System with petitioner METRO. Piercing the corporate veil of METRO was unwarranted, as there was no competent and convincing evidence of any wrongful, fraudulent or unlawful act on the part of METRO, and, more so, on the part of LRTA.- Petitioner LRTA further contends that it is a government-owned and controlled corporation with an original charter, Executive Order No. 603, Series of 1980, as amended, and thus under the exclusive jurisdiction only of the Civil Service Commission, not the NLRC.- We agree with petitioner LRTA. Section 2 (1), Article IX B, 1987 Constitution, expressly provides that [t]he civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters. Corporations with original charters are those which have been created by special law and not through the general corporation law.- In Philippine National Oil Company Energy Development Corporation v. Hon. Leogrado- under the present state of the law, the test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law is the manner of its creation such that government corporations created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage.- There should be no dispute then that employment in petitioner LRTA should be governed only by civil service rules, and not the Labor Code and beyond the reach of the Department of Labor and Employment, since petitioner LRTA is a government-owned and controlled corporation with an original charter, Executive Order No. 603, Series of 1980- In contrast, petitioner METRO is covered by the Labor Code despite its later acquisition by petitioner LRTA. In Lumanta v. National Labor Relations Commission, this Court ruled that labor law claims against government-owned and controlled corporations without original charter fall within the jurisdiction of the Department of Labor and Employment and not the Civil Service Commission- We therefore hold that the employees of petitioner METRO cannot be considered as employees of petitioner LRTA. The employees hired by METRO are covered by the Labor Code and are under the jurisdiction of the Department of Labor and Employment, whereas the employees of petitioner LRTA, a government-owned and controlled corporation with original charter, are covered by civil service rules. Herein private respondent workers cannot have the best of two worlds, e.g., be considered government employees of petitioner LRTA, yet allowed to strike as private employees under our labor laws.

EBRO III V NLRC (INTERNATIONAL CATHOLIC MIGRATION COMMISSION)

Labor Law 1 A2010 - 40 - Disini261 SCRA 399

MENDOZA; September 4, 1996

NATUREPetition for review on certiorari to set aside the order dated October 13, 1992 and the resolution dated March 3, 1993 of the National Labor Relations Commission.

FACTS - Private respondent International Catholic Migration Commission (ICMC) is a non-profit agency engaged in international humanitarian and voluntary work. It is duly registered with the United National Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II. It was one of the agencies accredited by the Philippine Government to operate the refugee processing center at Sabang, Morong, Bataan.- On June 24, 1985, private respondent ICMC employed petitioner Jose G. Ebro III to teach "English as a Second Language and Cultural Orientation Training Program" at the refugee processing center. The employment contract provided in pertinent part:

Salary: Your monthly salary for the first 6 months probationary period is P3,155.00 inclusive of cost of living allowance. Upon being made regular after successful completion of the six (6) months probationary period your monthly salary will be adjusted to P3,445.00 inclusive of cost of living allowanceIf either party wishes to terminate employment, a notice of two (2) weeks should be given in writing to the party.

- After six months, ICMC notified petitioner that effective December 21, 1985, the latter's services were terminated for his failure to meet the requirements of "1. classroom performance . . . up to the standards set in the Guide for Instruction; 2. regular attendance in the mandated teacher training, and in the schedule team meetings, one-on-one conferences with the supervisor, etc.; and 3. compliance with ICMC and PRPC policies and procedures."- On February 4, 1986, petitioner filed a complaint for illegal dismissal, unfair labor practice, underpayment of wages, accrued leave pay, 14th month pay, damages, attorney's fees, and expenses of litigation. Petitioner alleged that there was no objective evaluation of his performance to warrant his dismissal and that he should have been considered a regular employee from the start because ICMC failed to acquaint him with the standards under which he must qualify as such. He prayed for reinstatement with backwages; P3,155.00 for probationary and P3,445.00 for regular salary adjustments; value of lodging or dormitory privileges; cost of insurance coverage for group life, medical, death, dismemberment and disability benefits; moral, and exemplary, and nominal damages plus interest on the above claims with attorney's fees.- Answering the complaint, ICMC claimed that petitioner failed to quality for regular employment because he showed no interest in improving his professional performance both in and out of the classroom after he had been periodically evaluated; that petitioner was paid his salary up to December 31, 1985, two weeks pay in lieu of notice, and 14th month pay pro-rata; and that his accrued leave balance already been converted to cash.- After the parties had formally offered their evidence, private respondents submitted their memorandum on July 31, 1989 in which, among other things, they invoked ICMC's diplomatic immunity on the basis of the Memorandum of Agreement signed on July 15, 1988 between the Philippines government and ICMC.- The Labor Arbiter held that ICMC's legal immunity under the Memorandum could not be given retroactive effect since "[that would] deprive complainant's property right without due process and impair the obligation of contract of employment." He also expressed doubt on the ground that it was provided for by agreement and not through an act of Congress. Accordingly,

the Labor Arbiter ordered ICMC to reinstate petitioner as regular teacher without loss of seniority rights and to pay him one year backwages, other benefits, and ten percent attorney's fees for a total sum of P70,944.85.- Both parties appealed to the NLRC. On August 13, 1990, petitioner moved to dismiss private respondent's appeal because of the latter's failure to post a cash/surety bond. In its order of October 13, 1992, however, the NLRC ordered the case dismissed on the ground that, under the Memorandum of Agreement between the Philippine government and ICMC, the latter was immune from suit.

ISSUEWON the Memorandum of Agreement executed on July 15, 1988 granted ICMC immunity from suit

HELDYESRatio The grant of immunity from local jurisdiction to ICMC . . . is clearly necessitated by their international character and respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their internal workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance with international practice, from political pressure or control by the host country to the prejudice of member State of the organization, and to ensure the unhampered performance of their functions. (International Catholic Migration Commission v. Calleja)Reasoning - The grant of immunity to ICMC is in virtue of the Convention on the Privileges and Immunities of Specialized Agencies of the United Nations, adopted by the UN General Assembly on November 21, 1947, and concurred in by the Philippine Senate on May 17, 1949. This Convention has the force and effect of law, considering that under the Constitution, the Philippines adopts the generally accepted principles of international law as part of the law of the land.- The scope of immunity of the ICMC contained in the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations is instructive. Art. III, 4 of the Convention provides for immunity from "every form of legal process." Thus, even if private respondents had been served summons and subpoenas prior to the execution of the Memorandum, they, as officers of ICMC, can claim immunity under the same in order to prevent enforcement of an adverse judgment, since a writ of execution is "a legal process" within the meaning of Article III, 4.- Art III 4 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations requires that the waiver of the privilege must be express. There was no such waiver of immunity in this case. Nor can ICMC be estopped from claiming diplomatic immunity since estoppel does not operate to confer jurisdiction to a tribunal that has none over a cause of action.- Finally, neither can it be said that recognition of ICMC's immunity from suit deprives petitioner of due process. As pointed out in ICMC v. Calleja, petitioner is not exactly without remedy for whatever violation of rights it may have suffered for the following reason:Section 31 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations provides that "each specialized agency shall make provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of private character to which the specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement between ICMC and the Philippine Government, whenever there is any abuse of privilege by ICMC, the Government is free to withdraw the privileges and immunities accorded.Disposition Petition is DISMISSED for lack of merit.

Labor Law 1 A2010 - 41 - DisiniNATIONAL MINES AND ALLIED WORKERS UNION V

SAN ILDEFONSO COLLEGE

CHIANG KAI SHEK COLLEGE V CA (NLRC, CALAYLAY, AQUINO, GACUTAN, BELO)

437 SCRA 171DAVIDE, JR; August 24, 2004

FACTS- In 1992, Ms. Diana Belo, a teacher of Chiang Kai Shek College since 1977, applied for a leave of absence for the school year 1992-1993. Upon submitting her application, she was informed of the school policy that if she takes a leave of absence, she is not assured of a teaching load upon her return. She was likewise informed that only teachers in active service may enjoy the privilege and benefits provided by the school, such as free tuition for the teachers children.- Ms. Belo, nonetheless, took her leave of absence. In May 1993, she attempted to return to CKSC and signified her readiness to teach for the coming school year. However, she was not allowed to return. Hence, she filed a complaint for illegal dismissal, among others, against CKSC.- The Labor Arbiter dismissed the complaint but the NLRC disagreed. The Court of Appeals upheld the NLRCs ruling. Hence, this petition.

ISSUEWON private respondent was constructively dismissed

HELDYES- Under the Manual of Regulations for Private Schools, for a private school teacher to acquire a permanent status of employment and, therefore, be entitled to a security of tenure, the following requisites must concur: (a) the teacher is a full-time teacher; (b) the teacher must have rendered three consecutive years of service; and (c) such service must have been satisfactory. Since Ms. Belo has measured up to these standards, she therefore enjoys security of tenure. - Constructive dismissal is defined as a cessation from work because continued employment is rendered impossible, unreasonable, or unlikely; when there is a demotion in rank or a diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.- Ms. Belo was constructively dismissed when the petitioners, in implementing their policies, effectively barred her from teaching for the school year 1993-1994. The three policies are (1) the non-assurance of a teaching load to a teacher who took a leave of absence; (2) the hiring of non-permanent teachers in April to whom teaching loads were already assigned when Ms. Belo signified in May 1993 her intention to teach; and (3) the non-applicability to children of teachers on leave of the free tuition fee benefits extended to children of teachers in service.- Ms. Belo was definitely singled out in the implementation of a future policy (i.e., the policy that employees not in service are not entitled to any benefit extended by the school). The petitioners did not take heed of the principle enshrined in our labor laws that policies should be adequately known to the employees and uniformly implemented to the body of employees as a whole and not in isolation.- The continued employment of Ms. Belo was also rendered unlikely by the insistence of the petitioners in implementing the alleged policy that a teacher who goes on leave for one year is not assured of a teaching load. While this alleged policy was mentioned in Mr. Chiens letter of 9 June 1992, it was not included in the schools written statement of policies dated 13 March 1992. Hence, it was then a non-existent policy. When a non-existent policy is implemented and, in this case, only to Ms. Belo, it constitutes a clear case of discrimination.

- Petitioners invocation of the third policy that of giving teaching assignments to probationary teachers in April to justify their refusal to provide Ms. Belo a teaching load is a lame excuse that rings of untruth and dishonesty. Patently clear is the illegal manner by which the petitioners eased out Ms. Belo from the teaching corps.- Likewise, we do not find merit in petitioners assertion that the Court of Appeals should not have passed upon the illegality of the school policy of non-assurance of a teaching load, since the alleged illegality was never raised as an issue before the respondent court or in the forums below. As pointed out by the private respondent, that policy was part of the defense invoked by the petitioners in the Arbiter level, in the NLRC, and in the respondent court to the charge of illegal dismissal; and, hence, it must necessarily be passed upon and scrutinized. Besides, that policy is intimately intertwined with the main issue of whether Ms. Belo was illegally dismissed.- This case is an exception to the general rule that the factual findings and conclusions of the Labor Arbiter are accorded weight and respect on appeal, and even finality. For one thing, the findings of the NLRC and the Labor Arbiter are contrary to each other; hence, the reviewing court may delve into the records and examine for itself the questioned findings. Disposition The Petition is DENIED.

AUSTRIA V NLRC (CENTRAL PHIL. UNION MISSION CORP. OF THE 7TH-DAY ADVENTIST)

312 SCRA 410KAPUNAN; August 16, 1999

FACTS- Pastor Dionisio Austria worked with the Central Philippine Union Mission Corporation of the Seventh Day Adventists (SDA) for 28 years from 1963 to 1991. He began his work with the SDA on 15 July 1963 as a literature evangelist, selling literature of the SDA over the island of Negros. From then on, he worked his way up the ladder and got promoted several times. In January, 1968, he became the Assistant Publishing Director in the West Visayan Mission. In July, 1972, he was elevated to the position of Pastor covering the island of Panay, and the provinces of Romblon and Guimaras. He held the same position up to 1988. Finally, in 1989, he was promoted as District Pastor of the Negros Mission of the SDA and was assigned at Sagay, Balintawak and Toboso, Negros Occidental, with 12 churches under his jurisdiction. In January, 1991, he was transferred to Bacolod City. He held the position of district pastor until his services were terminated on 31 October 1991.- On various occasions from August up to October, 1991, Eufronio Ibesate, the treasurer of the Negros Mission asked him to admit accountability and responsibility for the church tithes and offerings collected by his wife, Thelma Austria, in his district which amounted to P15,078.10, and to remit the same to the Negros Mission. Petitioner reasoned out that he should not be made accountable for the unremitted collections since it was Pastor Gideon Buhat and Ibesate who authorized his wife to collect the tithes and offerings since he was very sick to do the collecting at that time.- On 16 October 1991, petitioner went to the office of Pastor Buhat, the president of the Negros Mission. During said call, petitioner tried to persuade Pastor Buhat to convene the Executive Committee for the purpose of settling the dispute between him and Pastor David Rodrigo. The dispute between David Rodrigo and petitioner arose from an incident in which petitioner assisted his friend, Danny Diamada, to collect from Pastor Rodrigo the unpaid balance for the repair of the latter's motor vehicle which he failed to pay to Diamada. Due to the assistance of petitioner in collecting Pastor Rodrigo's debt, the latter harbored ill-feelings against petitioner. When news reached petitioner that Pastor Rodrigo was about to file a complaint against him with the Negros Mission, he immediately proceeded to the office of Pastor Buhat and asked the latter to

Labor Law 1 A2010 - 42 - Disiniconvene the Executive Committee. Pastor Buhat denied the request of petitioner since some committee members were out of town and there was no quorum. Thereafter, the two exchanged heated arguments. Petitioner then left the office of Pastor Buhat. While on his way out, petitioner overheard Pastor Buhat saying "Pastor daw inisog na ina iya (Pastor you are talking tough)." Irked by such remark, petitioner returned to the office of Pastor Buhat, and tried to overturn the latter's table, though unsuccessfully, since it was heavy. Thereafter, petitioner banged the attache case of Pastor Buhat on the table, scattered the books in his office, and threw the phone. Fortunately, Pastors Yonillo Leopoldo and Claudio Montao were around and they pacified both.- On 17 October 1991, petitioner received a letter inviting him and his wife to attend the Executive Committee meeting. From October 21 to 22, the fact-finding committee conducted an investigation. Petitioner immediately wrote Pastor Rueben Moralde, president of the SDA and chairman of the fact-finding committee, requesting that certain members of the fact-finding committee be excluded in the investigation and resolution of the case. Out of the 6 members requested to inhibit themselves from the investigation and decision-making, only 2 were actually excluded: Pastor Buhat and Pastor Rodrigo. Subsequently, petitioner received a letter of dismissal citing misappropriation of denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and commission of an offense against the person of employer's duly authorized representative, as grounds for the termination of his services.

ISSUES1. WON the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by petitioner against the SDA2. WON the termination of the services of petitioner is an ecclesiastical affair, and, as such, involves the separation of church and state3. WON such termination is valid

HELD1. YES and 2. NO [Resolved jointly since they are related]Ratio An ecclesiastical affair is one that concerns doctrine, creed or form or worship of the church, or the adoption and enforcement within a religious association of needful laws and regulations for the government of the membership, and the power of excluding from such associations those deemed unworthy of membership.Reasoning - Based on this definition, an ecclesiastical affair involves the relationship between the church and its members and relate to matters of faith, religious doctrines, worship and governance of the congregation. To be concrete, examples of this so-called ecclesiastical affairs to which the State cannot meddle are proceedings for excommunication, ordinations of religious ministers, administration of sacraments and other activities which attached religious significance. The case at bar does not even remotely concern any of the above cited examples. While the matter at hand relates to the church and its religious minister it does not ipso facto give the case a religious significance. Simply stated, what is involved here is the relationship of the church as an employer and the minister as an employee. It is purely secular and has no relation whatsoever with the practice of faith, worship or doctrines of the church. In this case, petitioner was not excommunicated or expelled from the membership of the SDA but was terminated from employment.- Aside from these, SDA admitted in a certification issued by its officer, Ibesate, that petitioner has been its employee for 28 years. SDA even registered petitioner with the SSS as its employee. The worker's records of petitioner have been submitted by private respondents as part of their exhibits. From all of these it is clear that when the SDA terminated the services of petitioner, it was merely exercising its management

prerogative to fire an employee which it believes to be unfit for the job. As such, the State, through the Labor Arbiter and the NLRC, has the right to take cognizance of the case.- Finally, private respondents are estopped from raising the issue of lack of jurisdiction for the first time on appeal. The active participation of a party coupled with his failure to object to the jurisdiction of the court or quasi-judicial body is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or body's jurisdiction.3. NO.Reasoning - The issue being the legality of petitioner's dismissal, the same must be measured against the requisites for a valid dismissal, namely: (a) the employee must be afforded due process, i.e., he must be given an opportunity to be heard and to defend himself, and; (b) the dismissal must be for a valid cause as provided in Article 282 of the Labor Code. Without the concurrence of these twin requirements, the termination would, in the eyes of the law, be illegal.As to Due Process- Article 277(b) of the Labor Code further require the employer to furnish the employee with 2 written notices, to wit: (a) 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, (b) 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.- The first notice, which may be considered as the proper charge, serves to apprise the employee of the particular acts or omissions for which his dismissal is sought. The second notice on the other hand seeks to inform the employee of the employer's decision to dismiss him. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge and ample opportunity to be heard and defend himself with the assistance of a representative, if he so desires. Non-compliance therewith is fatal because these requirements are conditions sine quo non before dismissal may be validly effected.- SDA failed to substantially comply with the above requirements. With regard to the first notice, the letter dated 17 October 1991, which notified petitioner and his wife to attend the meeting on 21 October 1991, cannot be construed as the written charge required by law. A perusal of the said letter reveals that it never categorically stated the particular acts or omissions on which his impending termination was grounded. In fact, the letter never even mentioned that he would be subject to investigation. The letter merely mentioned that he and his wife were invited to a meeting wherein what would be discussed were the alleged unremitted church tithes and the events that transpired on 16 October 1991. For this reason, it cannot be said that petitioner was given enough opportunity to properly prepare for his defense. While admittedly, SDA complied with the second requirement, the notice of termination, this does not cure the initial defect of lack of the proper written charge required by law.As to Just Cause- Private respondents allege that they have lost their confidence in petitioner for his failure, despite demands, to remit the tithes and offerings which were collected in his district. Settled is the rule that under Article 282 (c) of the Labor Code, the breach of trust must be willful. A breach is 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 rest on substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion, otherwise, the employee would eternally remain at the mercy of the employer. It should be genuine and not simulated. This ground has never been intended to afford an

Labor Law 1 A2010 - 43 - Disinioccasion for abuse, because of its subjective nature. The records show that there were only 6 instances when petitioner personally collected and received from the church treasurers the tithes, collections, and donations for the church. The testimony of Naomi Geniebla, the Negros Mission Church Auditor and a witness for private respondents, show that Pastor Austria was able to remit all his collections to the treasurer of the Negros Mission. Private respondents try to pin on petitioner the alleged non-remittance of the tithes collected by his wife. In the absence of conspiracy and collusion, which private respondents failed to demonstrate, between petitioner and his wife, he cannot be made accountable for the alleged infraction committed by his wife. After all, they still have separate and distinct personalities. Thus, the allegation of breach of trust has no leg to stand on.- Misconduct has been defined as 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. For misconduct to be considered serious it must be of such grave and aggravated character and not merely trivial or unimportant. Based on this standard, we believe that the act of petitioner in banging the attache case on the table, throwing the telephone and scattering the books in the office of Pastor Buhat, although improper, cannot be considered as grave enough to be considered as serious misconduct. After all, as correctly observed by the Labor Arbiter, though petitioner committed damage to property, he did not physically assault Pastor Buhat or any other pastor present during the incident of 16 October 1991. In fact, the alleged offense committed upon the person of the employer's representatives was never really established or proven by private respondents. Hence, there is no basis for the allegation that petitioner's act constituted serious misconduct or that the same was an offense against the person of the employer's duly authorized representative.- The final ground alleged by private respondents, gross and habitual neglect of duties, does not requires an exhaustive discussion. All private respondents had were allegations but not proof. Aside from merely citing the said ground, private respondents failed to prove culpability. In fact, the evidence on record shows otherwise. Petitioner's rise from the ranks proves that he was actually a hard-worker. Private respondents' evidence, which consisted of petitioner's Worker's Reports, revealed how petitioner travelled to different churches to attend to the faithful under his care. Indeed, he labored hard for the SDA, but, in return, he was rewarded with a dismissal from the service for a non-existent cause.Disposition Finding of the Labor Arbiter that petitioner was terminated from service without just or lawful cause is SUSTAINED. Petitioner is entitled to reinstatement without loss of seniority right and the payment of full back-wages without any deduction corresponding to the period from his illegal dismissal up to the actual reinstatement. Challenged Resolution of NLRC is NULLIFIED and SET ASIDE.

PEARANDA V BAGANGA PLYWOOD CORP [PAGE 1]

CBTC EMPLOYEES UNION V CLAVE141 SCRA 9

DE LA FUENTE; January 7, 1986

NATUREPetition for certiorari seeking to annul and set aside the decision of the respondent Presidential Executive Assistant

FACTS- Commercial Bank and Trust Company Employees' Union lodged a complaint with the Department of Labor, against Comtrust Bank for non-payment of the holiday pay benefits

provided for under Art 95 of the Labor Code in relation to Rule X, Book III of the Rules and Regulations Implementing the Labor Code.- Failing to arrive at an amicable settlement at conciliation level, the parties opted to submit their dispute for voluntary arbitration. The issue presented was: "Whether the permanent employees of the Bank within the collective bargaining unit paid on a monthly basis are entitled to holiday pay effective November 1, 1974, pursuant to Article 95 (now Article 94) of the Labor Code, as amended and Rule X (now Rule IV), Book III of the Rules and Regulations Implementing the Labor Code. "- In addition, the disputants signed a Submission Agreement stipulating as final, unappealable and executory the decision of the Arbitrator, including subsequent issuances for clarificatory and/or relief purposes, notwithstanding Article 262 of the Labor Code.- In the course of the hearing, the Arbitrator apprised the parties of an interpretative bulletin on "holiday pay" about to be issued by the Department of Labor.- The Union filed a Manifestation stating that in the event that said Interpretative Bulletin regarding holiday pay would be adverse to the present claim union respectfully reserves the right to take such action as may be appropriate to protect its interests, a question of law being involved. An Interpretative Bulletin which was inexistent at the time the said commitment was made and which may be contrary to the law itself should not bar the right of the union to claim for its holiday pay benefits- Voluntary Arbitrator stated that, there is more reason to believe that, if the Bank has never made any deduction from its monthly-paid employees for unworked Saturdays, Sundays, legal and special holidays, it is because there is really nothing to deduct properly since the monthly, salary never really included pay for such unworked days-and which give credence to the conclusion that the divisor '250' is the proper one to use in computing the equivalent daily rate of the monthly-paid employees; that both the decree itself and the Rules mentioned enumerated the excepted workers. It is a basic rule of statutory construction that putting an exception limits or modifies the enumeration or meaning made in the law. It is thus easy to see that a mere reading of the Decree and of the Rules would show that the monthly-paid employees of the Bank are not expressly included in the enumeration of the exception.- Voluntary Arbitrator directed the bank to pay its monthly paid employees their legal holiday pay. - The next day, the Department of Labor released Policy Instructions No. 9 which clarifies controversies on the entitlement of monthly paid employees. The new determining rule is this: If the monthly paid employee is receiving not less than P 240, the maximum monthly minimum wage, and his monthly pay is uniform from January to December, he is presumed to be already paid the ten (10) paid legal holidays. However, if deductions are made from his monthly salary on account of holidays in months where they occur, then he is still entitled to the ten (10) paid legal holidays.- Bank appealed to NLRC but appeal was dismissed because it was filed way beyond the ten-day period for perfecting an appeal and because it contravened the agreement that the award shall be final and unappealable.- Acting Secretary of Labor reversed NLRC decision and ruled that the appeal was filed on time and that a review of the case was inevitable as the money claim exceeded P100,000.00.- Presidential Executive Assistant affirmed DOJ ruling, relying heavily on the Manifestation and Policy Instructions No. 9.Petitioners ClaimThe legal presumption established in Section 2, Rule IV, Book 1112, of the Rules and Regulations implementing particularly

2 SECTION 2. Status of employees paid by the month -Employees who are uniformly paid by the month, irrespective of the number of' working days therein with a salary of not less than the statutory or established minimum wage, shall be presumed to be paid for all days in the month whether worked or not.For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve.

Labor Law 1 A2010 - 44 - DisiniArticle 94 (formerly Article 208) of the Labor Code, is merely a disputable presumptionRespondents Comments- The Bank maintains that, since its inception or start of operations in 1954, all monthly-paid employees in the Bank are paid their monthly salaries without any deduction for unworked Saturdays, Sundays, legals and special holidays. On the other hand, it also maintains that, as a matter of fact, 'always conscious of its employee who has to work, on respondent's rest days of Saturdays and Sundays or on a legal holiday, an employee who works overtime on any of said days is paid one addition regular pay for the day plus 50% of said regular pay- The Bank further maintains that the holiday pay is intended only for daily-paid workers.- The question submitted for arbitration is now moot and academic.

ISSUEWON the permanent employees of the bank are entitled to holiday pay

HELDYES- In excluding the union members of herein petitioner from the benefits of the holiday pay law, public respondent predicated his ruling on Section 2, Rule IV, Book III of the Rules to implement Article 94 of the labor Code promulgated by the then Secretary of labor and Policy Instructions No. 9.- In Insular Bank of Asia and America Employees' Union (IBAAEU) vs. Inciong, 7 this Court's Second Division, speaking through former Justice Makasiar, expressed the view and declared that the aforementioned section and interpretative bulletin are null and void, having been promulgated by the then Secretary of Labor in excess of his rule-making authority. It was pointed out, inter alia, that in the guise of clarifying the provisions on holiday pay, said rule and policy instructions in effect amended the law by enlarging the scope of the exclusions. - The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add another excluded group, namely, 'employees who are uniformly paid by the month'. While the additional exclusion is only in the form of a presumption that all monthly paid employees have already been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires.Disposition The questioned decision set aside and the award of the arbitrator reinstated.

SONZA V ABS-CBN BROADCASTING CORPORATION431 SCRA 587

CARPIO; June 10, 2004

NATURE Petition for review on certiorari

FACTS - ABS-CBN signed Agreement with Mel and Jay Management and Devt Corp (MJMDC), which agreed to provide Sonzas services exclusively to the network as talent for radio and TV.- Sonza resigned and complained that network didnt pay his salaries, separation pay, service incentive leave pay, etc. ABS filed Motion to Dismiss because there was no employer-employee relationship. ABS continued to remit Sonzas monthly talent fees.- Labor Arbiter dismissed complaint because of lack of jurisdiction. NLRC affirmed Arbiters decision. Sonza filed certiorari action with CA, which dismissed the case. Hence this petition.

ISSUEWON there was an employer-employee relationship between ABS-CBN and Sonza

HELD NO- This is the first Court resolution on nature of relationship between a station and a talent.- There are 4 elements of employer-employee relationship:1. Selection of employee

- if Sonza didnt possess his skills, talents and celebrity status, ABS-CBN would not have entered into agreement with him but would have hired him through personnel department

2. Payment of wages- whatever Sonza received arose from the contract and not from the employer-employee relation- the talent fee is so huge that it indicates more a contractual than an employment relationship

3. Power to dismiss- ABS-CBN coulnt retrench Sonza because it is obligated to pay talent fees for duration of contract

4. Control on employee on means and methods - also called control test; most impt to determine

relationship- Sonza contends ABS exercised control over means and methods of his work. Court said ABS merely reserved the right to modify the program format and airtime schedule. Its sole concern was the quality of the show and the ratings. How Sonza appeared, sounded, etc. is outside control of ABS.- Sonza contends that ABS exercised control in providing equipment and crew. Court said these are not tools needed by Sonza. What he needed were his talent, skills, costume.- Sonza contends that ABS subjected him to rules and standards. Court said that the rules are the TV and Radio Code of the Kapisanan ng Broadcaster sa Pilipinas, merely adopted by ABS as its code of ethics. It applies to broadcasters, not just to ABS employees. Besides, these rules are merely guidelines.- Sonza said his exclusivity is a form of control by ABS. Court said exclusivity is a widespread practice in entertainment industry, as protection of investment in building up a talent. Besides, the huge talent fees of an exclusive talent compensates for exclusivity.

- Arbiter ruled that as talent of MJMDC, Sonza is not an employee of ABS. Sonza insists that MJMDC is a labor-only contractor and ABS is his employer. In labor-only contract, there are 3 parties the contractor, employee and the principal (deemed the real employer). Under this, the contractor is the agent of the principal. If Sonzas argument was true, then MJMDC turns to be the agent of both Sonza and ABS. Besides, in the Agreement, there were only two parties mentioned Sonza and ABS, with MJMDC as Sonzas agent.- Sonza argues Policy Instruction No. 40 by Minister of Labor said the types of employees in broadcast are the station and program employees. Court said this instruction is a mere executive issuance not binding on the Court.- Court also said that Arbiter can decide a case without a formal trial.- Sonza argues that treating talents as contractors violates right to security of tenure. Court said this right exists only if there is an employer-employee relation. Besides, law also protects rights of talents to contract. Besides, if hosts were employees, managers can dictate what hosts will say, and this is not conducive to press freedom.- Difference in tax treatment also showed that theres no employer-employee relation.- Sonzas claim is based on their agreement. Therefore, action should not be based on Labor Code but on breach of contract.

Labor Law 1 A2010 - 45 - DisiniRIZAL EMPIRE INSURANCE GROUP V NLRC (RUIZ,

CORIA)150 SCRA 565

PARAS; May 29, 1987

NATUREPetition for certiorari

FACTS- August, 1977- Coria was hired by Rizal Empire Insurance Group(REIG) as a casual employee with a salary of P10.00 a day. - January 1, 1978- Coria was made a regular employee, having been appointed as clerk-typist, with a monthly salary of P300.00. - Being a permanent employee, he was furnished a copy of petitioner company's "General Information, Office Behavior and Other Rules and Regulations."- In the same year, without change in his position-designation, he was transferred to the Claims Department and his salary was increased to P450.00 a month. - 1980- he was transferred to the Underwriting Department and his salary was increased to P580.00 a month plus cost of living allowance, until he was transferred to the Fire Department as filing clerk. - July, 1983- he was made an inspector of the Fire Division with a monthly salary of P685.00 plus allowances and other benefits. - Oct. 15, 1983- Coria was dismissed from work, on the grounds of tardiness and unexcused absences. - Coria filed a complaint with MOLE - March 14, 1985- LA Ruiz reinstated him to his position with back wages. - REIG appealed to the NLRC but was dismissed on the ground that the same had been filed out of time. Hence this petition.

ISSUEWON it is still within the jurisdiction of the SC

HELD NO- Under the provisions of the Revised NLRC Rules, the decision appealed from in this case has become final and executory and can no longer be subject to appeal. Ratio Administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, and are entitled to great respect (Espanol v. Philippine Veterans Administration, 137 SCRA 314 [1985])..Reasoning - The record shows that REIG received a copy of the decision of the LA on April 1, 1985. - It filed a Motion for Extension of Time to File Memorandum of Appeal on April 11, 1985 and filed the Memorandum of Appeal on April 22, 1985. - Rule VIII of the Revised Rules of the NLRC on appeal, provides that decisions or orders of a LA shall be final and executory unless appealed to the Commission by any or both of the parties within 10 calendar days from receipt of notice and that no motion or request for extension of the period within which to perfect an appeal shall be entertained. NLRC correctly dismissed REIGs appeal pursuant to said rules.- The NLRC didnt commit GAD amounting to lack of jurisdiction in arbitrarily dismissing petitioners' appeal on a technicality. - SC need not interpret the Revised Rules of the NLRC as they are clear and explicit and leave no room for interpretation. - Even on the merits, the ruling of the LA appears to be correct; the consistent promotions in rank and salary of the private respondent indicate he must have been a highly efficient worker, who should be retained despite occasional lapses in

punctuality and attendance. Perfection cannot after all be demanded. Disposition Petition DISMISSED.

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO V GLAXO WELLCOME PHILIPPINES INC

438 SCRA 343TINGA; September 17, 2004

NATUREPetition for review on certiorari of the decision and resolution of the Court of Appeals

FACTS- Petitioner Tecson was hired by respondent Glaxo Wellcome Philippines, Inc. (Glaxo) as medical representative after Tecson had undergone training and orientation. Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study and abide by existing company rules; to disclose to management any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies and should management find that such relationship poses a possible conflict of interest, to resign from the company.- The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform management of any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies. If management perceives a conflict of interest or a potential conflict between such relationship and the employees employment with the company, the management and the employee will explore the possibility of a transfer to another department in a non-counterchecking position or preparation for employment outside the company after six months.- Tecson was initially assigned to market Glaxos products in the Camarines Sur-Camarines Norte sales area. Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra Pharmaceuticals (Astra), a competitor of Glaxo. Bettsy was Astras Branch Coordinator in Albay. She supervised the district managers and medical representatives of her company and prepared marketing strategies for Astra in that area. Even before they got married, Tecson received several reminders from his District Manager regarding the conflict of interest which his relationship with Bettsy might engender. Still, love prevailed, and Tecson married Bettsy.- Tecsons superiors informed him that his marriage to Bettsy gave rise to a conflict of interest. Tecsons superiors reminded him that he and Bettsy should decide which one of them would resign from their jobs, although they told him that they wanted to retain him as much as possible because he was performing his job well.- Tecson requested for time to comply with the company policy against entering into a relationship with an employee of a competitor company. He explained that Astra, Bettsys employer, was planning to merge with Zeneca, another drug company; and Bettsy was planning to avail of the redundancy package to be offered by Astra. With Bettsys separation from her company, the potential conflict of interest would be eliminated. At the same time, they would be able to avail of the attractive redundancy package from Astra.- Tecson again requested for more time resolve the problem. Tecson applied for a transfer in Glaxos milk division, thinking

Labor Law 1 A2010 - 46 - Disinithat since Astra did not have a milk division, the potential conflict of interest would be eliminated. His application was denied in view of Glaxos least-movement-possible policy. Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but his request was denied.- Tecson sought Glaxos reconsideration regarding his transfer and brought the matter to Glaxos Grievance Committee. Glaxo, however, remained firm in its decision and gave Tecson time to comply with the transfer order. Tecson defied the transfer order and continued acting as medical representative in the Camarines Sur-Camarines Norte sales area.- During the pendency of the grievance proceedings, Tecson was paid his salary, but was not issued samples of products which were competing with similar products manufactured by Astra. He was also not included in product conferences regarding such products.- Because the parties failed to resolve the issue at the grievance machinery level, they submitted the matter for voluntary arbitration. Glaxo offered Tecson a separation pay of one-half month pay for every year of service, or a total of P50,000.00 but he declined the offer. The National Conciliation and Mediation Board (NCMB) rendered its Decision declaring as valid Glaxos policy on relationships between its employees and persons employed with competitor companies, and affirming Glaxos right to transfer Tecson to another sales territory.- Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing the NCMB Decision. The Court of Appeals promulgated its Decision denying the Petition for Review on the ground that the NCMB did not err in rendering its Decision. The appellate court held that Glaxos policy prohibiting its employees from having personal relationships with employees of competitor companies is a valid exercise of its management prerogatives. Tecson filed a Motion for Reconsideration of the appellate courts Decision, but the motion was denied by the appellate court.

ISSUES1. WON the Court of Appeals erred in ruling that Glaxos policy against its employees marrying employees from competitor companies is valid, and in not holding that said policy violates the equal protection clause of the Constitution2. WON petitioner was constructively dismissed

HELD1. NO- Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors, especially so that it and Astra are rival companies in the highly competitive pharmaceutical industry.- The prohibition against personal or marital relationships with employees of competitor companies upon Glaxos employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.- That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to 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. The law also recognizes 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 petitioners erroneously suggest. It is a settled principle that the commands of the equal protection clause are addressed only to the state or those

acting under color of its authority. Corollarily, it has been held in a long array of U.S. Supreme Court decisions that the equal protection clause erects no shield against merely private conduct, however, discriminatory or wrongful. The only exception occurs when the state in any of its manifestations or actions has been found to have become entwined or involved in the wrongful private conduct. Obviously, however, the exception is not present in this case. Significantly, the company actually enforced the policy after repeated requests to the employee to comply with the policy. Indeed, the application of the policy was made in an impartial and even-handed manner, with due regard for the lot of the employee.- In any event, from the wordings of the contractual provision and the policy in its employee handbook, it is clear that Glaxo does not impose an absolute prohibition against relationships between its employees and those of competitor companies. Its employees are free to cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of interest between the employee and the company that may arise out of such relationships.- The Court of Appeals also correctly noted that the assailed company policy which forms part of respondents Employee Code of Conduct and of its contracts with its employees, such as that signed by Tecson, was made known to him prior to his employment. Tecson, therefore, was aware of that restriction when he signed his employment contract and when he entered into a relationship with Bettsy. Since Tecson knowingly and voluntarily entered into a contract of employment with Glaxo, the stipulations therein have the force of law between them and, thus, should be complied with in good faith. He is therefore estopped from questioning said policy.2. NO- Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or unlikely; when there is a demotion in rank or diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. None of these conditions are present in the instant case. The record does not show that Tecson was demoted or unduly discriminated upon by reason of such transfer. Glaxo properly exercised its management prerogative in reassigning Tecson to the Butuan City sales area. When the problem could not be resolved after several years of waiting, Glaxo was constrained to reassign Tecson to a sales area different from that handled by his wife for Astra. Notably, Glaxo did not terminate Tecson from employment but only reassigned him to another area where his home province, Agusan del Sur, was included. In effecting Tecsons transfer, Glaxo even considered the welfare of Tecsons family. Clearly, the foregoing dispels any suspicion of unfairness and bad faith on the part of Glaxo.

SALINAS V NLRC (ATLANTIC GULF AND PACIFIC CO)319 SCRA 54

PURISIMA; November 24, 1999

FACTS- Petitioners were employed with Atlantic Gulf and Pacific Co. (AG & P):

Salinas: 1983-1988 as carpenter/finishing carpenterAlejandro: 1982-1989 as bulk cement operator, bulk cement plant/carrier operator & crane driverCortez: 1979-1988 as carpenter/forklift operator

Labor Law 1 A2010 - 47 - DisiniSamulde: 1982-1989 as lubeman/stationary operator

- Complaints (separate but consolidated by the LA): illegal dismissal- Petitioners Claim: They had been covered by a number of contracts renewed continuously, with periods ranging from five (5) to nine (9) years, and they performed the same kind of work through out their employment, and such was usually necessary and desirable in the trade or business of the respondent corporation; and their work did not end on a project-to-project basis, although the contrary was made to appear by the employer through the signing of separate employment contracts.- LA: Dismissed petitions on the ground that the petitioners are project employees are project employees whose work contracts with AG & P indicate that they were employed in such category; that they have been assigned to different work projects, not just to one and that their work relation with AG & P, relative to termination, is governed by Policy Instruction No. 20 (rule governing project employees).- Appeal to NLRC: Affirmed LAs findings

ISSUES1. WON the petitioners are project employeesProcedural2. WON this petition for certiorari was proper

HELD1. NO- The petitioners are regular employees.- The mandate in Article 281 of the Labor Code, which pertinently prescribes that the 'provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements 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' and 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,' should apply in the case of petitioner. - Failure to report the termination to Public Employment Office is a clear indication that petitioners were not and are not project employees. (PI No. 20 requires reports of terminations)- It is basic and irrefragable rule that in carrying out and interpreting the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. The interpretation herein made gives meaning and substance to the liberal and compassionate spirit of the law enunciated in Article 4 of Labor Code that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor".- It is beyond cavil that petitioners had been providing the respondent corporation with continuous and uninterrupted services, except for a day or so gap in their successive employment contracts. Their contracts had been renewed several times, with the total length of their services ranging from five (5) to nine (9) years. Throughout the duration of their contracts, they had been performing the same kinds of work (e.g., as lubeman, bulk cement operator and carpenter), which were usually necessary and desirable in the construction business of AG & P, its usual trade or business.- Undoubtedly, periods in the present case have been imposed to preclude the acquisition of tenurial security by petitioners, and must be struck down for being contrary to public policy, morals, good customs or public order.2. YES- Anent the issue that the petition should have been brought under Rule 65 and not under Rule 45 of the Revised Rules of Court, this rule is not inflexible. In the interest of justice, often the Court has judiciously treated as special civil actions for

certiorari petitions erroneously captioned as petitions for review on certiorari.- With regard to the issue on non-exhaustion of administrative remedies, the Court hold that the failure of petitioners to interpose a motion for reconsideration of the NLRC decision before coming to this Court was not a fatal omission. The exhaustion of administrative remedies doctrine is not a hard and fast rule and does not apply where the issue is purely a legal one. A motion for reconsideration as a prerequisite for the bringing of an action under Rule 65 may be dispensed with where the issue is purely of law, as in this case. At all events and in the interest of substantial justice, especially in cases involving the rights of workers, procedural lapses, if any, may be disregarded to enable the Court to examine and resolve the conflicting rights and responsibilities of the parties. This liberality is warranted in the case at bar, especially since it has been shown that the intervention of the Court is necessary for the protection of the herein petitioner(s).Disposition The questioned Resolution of the NLRC is SET ASIDE and another one is hereby ENTERED ordering the respondent corporation to reinstate petitioners without loss of seniority and with full backwages.

ABELLA V NLRC (QUITCO, DIONELE)152 SCRA 140

PARAS; July 20, 1987

FACTS- Petitioner Rosalina Perez Abella leased a farm land in Ponteverde, Negros Occidental, known as Hacienda Danao-Ramona, for a period of ten (10) years, renewable, at her option, for another ten (10) years. She did renew for another ten years. During the existence of the lease, she employed private respondents. Private respondent Ricardo Dionele, Sr. has been a regular farm worker for 33 years while . On the other hand, private respondent Romeo Quitco started worked for 14 years. Upon the expiration of her leasehold rights, petitioner dismissed private respondents and turned over the hacienda to the owners thereof, who continued the management, cultivation and operation of the farm

ISSUEWON private respondents are entitled to separation pay

HELDYES- The closing wasnt due to serious losses or financial reverses. The Court cited Article 284 (this should be 283) which says:

"Art. 284. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year."

- Petitioner then contends that the aforequoted provision violates the constitutional guarantee against impairment of

Labor Law 1 A2010 - 48 - Disiniobligations and contracts, because when she leased Hacienda Danao-Ramona, neither she nor the lessor contemplated the creation of the obligation to pay separation pay to workers at the end of the lease. The Court said that this contention by petitioner is untenable. The law is clear and to permit such an argument would mean that the years of service given by the workers will mean nothing since there is no agreement here that the new management will be the one to shoulder the separation pay. The old management, pertaining to Abella in this case, should give the payment. - In any event, it is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. (Volshel Labor Union v. Bureau of Labor Relations, 137 SCRA 43 [1985]). It is the kind of interpretation which gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that `all doubts in the implementation and interpretation of the provisions of this Code including its implementing rules and regulations shall be resolved in favor of labor." The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor.Disposition Petition is DISMISSED.

ASIAN TRANSMISSION CORP V CA (BISIG NG ASIAN TRANSMISSION LABOR UNION)

425 SCRA 478CARPIO-MORALES; March 15, 2004

NATUREPetition for certiorari seeking the nullification of the March 28, 2000 Decision of the Court of Appeals

FACTS- The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993, wherein it clarified, that employees are entitled to 200% of their basic wage on April 9, 1993, which, apart from being Good Friday, and, therefore, a legal holiday, is also Araw ng Kagitingan, which is also a legal holiday, even if unworked.- Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan - Despite the explanatory bulletin, petitioner Asian Transmission Corporation opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998. - Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.- In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. - On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its covered employees "200% and not just 100% of their regular daily wages for the unworked April 9, 1998

- Subject of interpretation in the case at bar is Article 943 of the Labor which was amended by Executive Order No. 2034- In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula which is not changed by the fact that there are two holidays falling on one day; and that that the law, as amended, enumerates ten regular holidays for every year, and should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday."- The Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and that "there is no condition, qualification or exception for any variance from the clear intent that all holidays shall be compensated.- The Court of Appeals further held that "in the absence of an explicit provision in law which provides for [a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor."- Hence, this petition.

ISSUEWON daily-paid employees are entitled to be paid for two regular holidays which fall on the same day

HELDYES- Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay."8 It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance.- Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.- As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision is mandatory, regardless of whether an employee is paid on a monthly or daily basis. Unlike a bonus, which is a

3 ART. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and (c) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election4 regular holidays are now:1. New Years Day January 1; 2. Maundy Thursday Movable Date; 3. Good Friday Movable Date; 4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day); 5. Labor Day May 1; 6. Independence Day June 12; 7. National Heroes Day Last Sunday of August; 8. Bonifacio Day November 30; 9. Christmas Day December 25; 10. Rizal Day December 30

Labor Law 1 A2010 - 49 - Disinimanagement prerogative, holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine