A-C Management Prerogative (Cham)

8/10/2019 A-C Management Prerogative (Cham)

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TOYOTA MOTOR PHILS. WORKERS V. NLRC 537 SCRA 171 (2007)

FACTS: Toyota Motor Philippines Corporation Workers Association (Union) and itsdismissed officers and members seek to set aside the decision declaring illegal thestrikes staged by the Union and upholding the dismissal of the 227 Union officers and

members. On the other hand, Toyota prays for the recall of the award of severancecompensation to the 227 dismissed employees.1. The Union is a legitimate labor organization duly registered with the DOLE and is

the sole and exclusive bargaining agent of all Toyota rank and file employees.2. Med-Arbiter Order certified the Union as the sole and exclusive bargaining agent

of all the Toyota rank and file employees. Toyota challenged said Order via anappeal to the DOLE Secretary.

3. The Union submitted its CBA proposals to Toyota, but the latter refused tonegotiate in view of its pending appeal. Consequently, the Union filed a notice ofstrike based on Toyotas refusal to bargain.

4. 135 Union officers and members failed to render the required overtime work, and

instead marched to and staged a picket in front of the BLR office. The Union alsorequested that its members be allowed to be absent on February 22, 2001 toattend the hearing and instead work on their next scheduled rest day. Thisrequest however was denied by Toyota.

5. Despite denial of the Unions request, more than 200 employees staged massactions to protest the partisan and anti-union stance of Toyota.

6. Due to the deliberate absence of a considerable number of employees Toyotaexperienced acute lack of manpower in its manufacturing and production lines,and was unable to meet its production goals resulting in huge losses.

7. Toyota terminated the employment of 227 employees for participation inconcerted actions in violation of its Code of Conduct and for misconduct under

Article 282 of the Labor Code.

ISSUE: WON the mass actions committed by the Union on different occasions areillegal strikes.

HELD: The Court affirmed the decision of NLRC which held that the strike was illegalbut deleted the grant of severance compensation.

The protest actions undertaken by the Union officials and members on February 21 to23, 2001 are not valid and proper exercises of their right to assemble and askgovernment for redress of their complaints, but are illegal strikes in breach of the LaborCode. The concerted actions were undertaken without satisfying the prerequisites for avalid strike under Art. 263 of the Labor Code

With respect to the strikes committed from March 17 to April 12, 2001, those wereinitially legal as the legal requirements were met. However, the Union barricaded thegates of the Bicutan and Sta. Rosa plants and blocked the free ingress to and egressfrom the company premises. These strikes were illegal because unlawful means wereemployed. The acts of the Union officers and members are in palpable violation of Art.


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264(e) which proscribes acts of violence, coercion, or intimidation, or which obstruct thefree ingress to and egress from the company premises.

The individual respondents who staged illegal concerted actions on May 23 and 28,2001 in contravention of the Order of the DOLE Secretary that no acts should be

undertaken by them to aggravate the already deteriorated situation.While it may beconceded that there was no work disruption in the two Toyota plants, the Union and itsmembers picketed and performed concerted actions in front of the Company premises.This is a patent violation of the assumption of jurisdiction and certification Order of theDOLE Secretary, which ordered the parties to cease and desist from committing anyact that might lead to the worsening of an already deteriorated situation.

It is high time that employer and employee cease to view each other as adversaries andinstead recognize that theirs is a symbiotic relationship, wherein they must rely on eachother to ensure the success of the business. When they consider only their own self-interests, and when they act only with their own benefit in mind, both parties suffer from

short-sightedness, failing to realize that they both have a stake in the business. Theemployer wants the business to succeed, considering the investment that has beenmade. The employee in turn, also wants the business to succeed, as continuedemployment means a living, and the chance to better ones lot in life. It is clear thenthat they both have the same goal, even if the benefit that results may be greater forone party than the other. If this becomes a source of conflict, there are various, moreamicable means of settling disputes and of balancing interests that do not add fuel tothe fire, and instead open avenues for understanding and cooperation between theemployer and the employee. Even though strikes and lockouts have been recognizedas effective bargaining tools, it is an antiquated notion that they are truly beneficial, asthey only provide short-term solutions by forcing concessions from one party; butstaging such strikes would damage the working relationship between employers andemployees, thus endangering the business that they both want to succeed. The moreprogressive and truly effective means of dispute resolution lies in mediation,conciliation, and arbitration, which do not increase tension but instead provide relieffrom them. In the end, an atmosphere of trust and understanding has much more tooffer a business relationship than the traditional enmity that has long divided theemployer and the employee.


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GONZALEZ V. NLRC 313 SCRA169 (1999)

FACTS: Petitioner Gonzales has been a schoolteacher in the Elementary Departmentof private respondent Ateneo since 1974.

1. Ateneo Grade School Headmaster, sent a letter informing petitioner of the

complaints of two (2) parents for alleged use of corporal punishment on herstudents.2. It was only two (2) years after the complaints were made that she discovered,

through her students and their parents, that ATENEO was soliciting complainantsto lodge written complaints against her. She wrote a letter to Fr. Oscar Millar,S.J., demanding that she be formally informed of the complaint and be dulyinvestigated.

3. An investigative committee organized by Fr. Oscar Millar, S.J., to look into thealleged use of corporal punishment by petitioner in disciplining her students. Shewas duly furnished with the rules of procedure, informed of the schedule of thehearings, and given copies of the affidavits executed by the students who

testified against her.4. Petitioner refused to take part in the investigation unless the rules of procedurelaid down by the Committee be revised, contending that the same were violativeof her right to due process. Petitioner specifically objected to the provision whichstated: . . . 3) Counsel for Ms. Lorlene Gonzales shall not directly participate inthe investigation but will merely advise Ms. Gonzales ...

5. Ateneo refused to change the rules of procedure. The Committee commencedwith its investigation without petitioners participation. Private respondent serveda Notice of Termination on petitioner pursuant to the findings andrecommendation of the Committee.

6. Petitioner filed a complaint before the Labor Arbiter for illegal dismissal. LaborArbiter found her dismissal illegal for lack of factual basis, although petitioner wasafforded procedural due process respondent institution "failed to establishsubstantial evidence as to the guilt of the complainant of the offense charged."NLRC reversed the decision of the Labor Arbiter and declareed petitionersdismissal valid and legal

ISSUE: WON the NLRC committed grave abuse of discretion in sustaining as valid andlegal the dismissal of petitioner by private respondent ATENEO.

HELD: The conclusion of the NLRC is unwarranted. Employment is not merely acontractual relationship; it has assumed the nature of property right. It may spell thedifference whether or not a family will have food on their table, roof over their heads andeducation for their children. It is for this reason that the State has taken up measures toprotect employees from unjustified dismissals. It is also because of this that the right tosecurity of tenure is not only a statutory right but, more so, a constitutional right.The NLRC, in our view, appears to have skirted several important issues raised bypetitioner foremost of which is the absence of due process. Ample opportunity must beafforded the employee to defend herself either personally and/or with assistance of arepresentative; to know the nature of her offense; and, to cross examine and confront


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face to face the witnesses against her. The adamant refusal of the Committee to accedeto this demand resulted in her failure to confront and cross-examine her accusers. Thisis not "harping at technicalities" as wrongfully pointed out by the NLRC but a seriousviolation of petitioner's statutory and constitutional right to due process that ultimatelyvitiated the investigation.

ATENEO failed to prove by substantial evidence that petitioner had inflicted corporalpunishment on her students. Substantial evidence is more than mere scintilla. It meanssuch relevant evidence as a reasonable mind might accept as adequate to support aconclusion." The evidence of private respondent did not measure up to this standard. Itrelied solely on the witnesses' affidavits with questionable veracity.


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CAPITOL MEDICAL CENTER V. MERIS 470 SCRA 125 (2005)

FACTS: Capital Medical Center hired Dr. Meris as in charge of its ISU (IndustrialService Unit). He has been medical services as the Chief of ISU since 1974 until theclosure of the ISU on April 30, 1992.

1. Dr. Clemente, President and Chairman of the Board sent a notice to Dr. Merisadvising him of the managements decision to abolish the ISU and the consequent termination of his services as Chief due to the almost extinctdemand for direct medical service by the private and semi-governmentcorporations in providing health care for their employees;and that such extinctdemand was brought about by the existing trend of industrial companiesallocating their health care requirements to Health Maintenance Organizations(HMOs) or thru a tripartite arrangement with medical insurance carriers anddesignated hospitals.

2. Dr. Meris doubted the reason behind the managements decision to close theISU and believe that the ISU was not abolished instead it continued its

operations with Dr. Clemente. The notice of closure was a mere ploy to for hisouster because of his refusal to retire despite Dr. Clementes prodding to do so.He then filed a case against Capital Medical and Dr. Clemente for illegaldismissal and reinstatement with claims for backwages, moral and exemplarydamage plus attorneys fees.

3. Labor Arbiter held that the abolition of ISU was a valid and lawful exercise ofmanagement prerogative and there was convincing evidence that shows ISUwas operating at a loss.

4. On appeal, NLRC held that in the exercise of Capitols Management prerogative,it had the right to close even if it was not suffering business loss in view of Article283 of LC and jurisprudence.

5. Dr. Meris elevated the case to the CA which reverse the decision of NLRC andheld that the Capitols evidence failed to meet the standard of sufficient andadequate proof of loss necessary to justify the abolition, thus this petition.

ISSUE: WON not the CA erred in not upholding the petitioners managementprerogative to abolish the ISU.

HELD: Work is a necessity that has economic significance deserving legal protection.The social justice and protection to labor provisions in the Constitution dictate so.Employers are also accorded rights and privileges to assure their self-determination andindependence and reasonable return of capital. This mass of privileges comprises theso-called management prerogatives. Although they may be broad and unlimited inscope, the State has the right to determine whether an employers privilege is exercisedin a manner that complies with the legal requirements and does not offend the protectedrights of labor. One of the rights accorded an employer is the right to close anestablishment or undertaking.

The right to close the operation of an establishment or undertaking is explicitlyrecognized under the Labor Code as one of the authorized causes in terminating


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employment of workers, the only limitation being that the closure must not be for thepurpose of circumventing the provisions on termination of employment embodied in theLabor Code.

It would indeed be stretching the intent and spirit of the law if a court were to unjustly

interfere in managements prerogative to close or cease its business operations justbecause said business operation or undertaking is not suffering from any loss. As longas the companys exercise of the same is in good faith to advance its interest andnot for the purpose of defeating or circumventing the rights of employees underthe law or a valid agreement,such exercise will be upheld. Clearly then, the right toclose an establishment or undertaking may be justified on grounds other than businesslosses but it cannot be an unbridled prerogative to suit the whims of the employer. Theultimate test of the validity of closure or cessation of establishment or undertaking is thatit must be bona fide in character. And the burden of proving such falls upon theemployer

In the case at bar, Capitol failed to sufficiently prove its good faith in closing the ISU.Capitol failed, however, to present sufficient and convincing evidence to support suchclaim of extinct demand. In fact, the employees of Capitol submitted a petition dated

April 21, 1992 addressed to Dr. Clemente opposing the abolition of the ISU. Theclosure of ISU then surfaces to be contrary to the provisions of the Labor Code ontermination of employment. The termination of the services of Dr. Meris not having beenpremised on a just or authorized cause, he is entitled to either reinstatement orseparation pay if reinstatement is no longer viable, and to backwages.

Reinstatement, however, is not feasible in case of a strained employer-employeerelationship or when the work or position formerly held by the dismissed employee nolonger exists, as in the instant case. Dr. Meris is thus entitled to payment of separationpay at the rate of one (1) month salary for every year of his employment, with a fractionof at least six (6) months being considered as one(1) year, and full backwages from thetime of his dismissal from April 30, 1992 until the expiration of his term as Chief of ISUor his mandatory retirement, whichever comes first.


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BRO. LABOR UNITY V. ZAMORA 147 SCRA 49 (1987)

FACTS: The petitioners are workers who have been employed at the San Miguel ParolaGlass Factory since 1961. They worked as "cargadores" or "pahinante" at the SMCPlant loading, unloading, piling or palleting empty bottles and woosen shells to and from

company trucks and warehouses. At times, they accompanied the company trucks ontheir delivery routes.1. The petitioners first reported for work to Superintendent-in-Charge Camahort.

They were issued gate passes signed by Camahort and were provided by SanMiguel with the tools, equipment and paraphernalia used in the loading,unloading, piling and hauling operation.

2. Job orders emanated from Camahort. Work at times, exceeded the eight (8) hourday and necessitated work on Sundays and holidays. For this, they were neitherpaid overtime nor compensation for work on Sundays and holidays.

3. The petitioners worked exclusive at the SMC plant, never having been assignedto other companies or departments of SMC plant, even when the volume of work

was at its minimum.4. Sometime in January, 1969, the petitioner workers numbering 140 organizedand affiliated themselves with the petitioner union and engaged in unionactivities. Believing themselves entitled to overtime and holiday pay, thepetitioners pressed management, airing other grievances such as being paidbelow the minimum wage law, inhuman treatment, being forced to borrow atusurious rates of interest and to buy raffle tickets, coerced by withholding theirsalaries, and salary deductions made without their consent. However, their gripesand grievances were not heeded by the respondents.

5. The complainant union through its officers presented a letter to the respondentcompany containing proposals and/or labor demands together with a request forrecognition and collective bargaining. San Miguel refused to bargain with thepetitioner union alleging that the workers are not their employees.

6. On February 20, 1969, all the petitioners were dismissed from their jobs and,thereafter, denied entrance to respondent company's glass factory despite theirregularly reporting for work. A complaint for illegal dismissal and unfair laborpractice was filed by the petitioners. Thus this petition.

ISSUE: WON an employer-employee relationship exists between petitioners-membersof the "Brotherhood Labor Unit Movement of the Philippines" (BLUM) and respondentSan Miguel Corporation

HELD: Evidence shows there existence of an employer-employee relationship betweenpetitioner workers and respondent San Miguel Corporation.

In determining the existence of an employer-employee relationship, the elements thatare generally considered are the following: (a) the selection and engagement of theemployee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer'spower to control the employee with respect to the means and methods by which the


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work is to be accomplished. It. is the called "control test" that is the most importantelement.

The respondent asserts that the petitioners are employees of the Guaranteed LaborContractor, an independent labor contracting firm.

The existence of an independent contractor relationship is generally established by thefollowing criteria: "whether or not the contractor is carrying on an independent business;the nature and extent of the work; the skill required; the term and duration of therelationship; the right to assign the performance of a specified piece of work; the controland supervision of the work to another; the employer's power with respect to the hiring,firing and payment of the contractor's workers; the control of the premises; the duty tosupply the premises tools, appliances, materials and labor; and the mode, manner andterms of payment" None of the above criteria exists in the case at bar.

Each of the petitioners have worked continuously and exclusively for an average of 7

years for SMC plant. Considering the length of time that the petitioners have workedwith the respondent company, there is justification to conclude that they were engagedto perform activities necessary or desirable in the usual business or trade of therespondent, and the petitioners are, therefore regular employee.

The Guaranteed and Reliable Labor contractors have neither substantial capital norinvestment to qualify as an independent contractor under the law. The premises, tools,equipment and paraphernalia used by the petitioners in their jobs are admittedly allsupplied by respondent company. The alleged contractor's office, which consists of aspace at respondent company's warehouse, table, chair, typewriter and cabinet, areprovided for by respondent SMC. It is only the manpower or labor force which thealleged contractors supply, suggesting the existence of a "labor only" contractingscheme prohibited by law.

THE PAYMENT OF WAGES. The amount paid by respondent company to the allegedindependent contractor considers no business expenses or capital outlay of the latter.Nor is the profit or gain of the alleged contractor in the conduct of its business providedfor as an amount over and above the workers' wages. Instead, the alleged contractorreceives a percentage from the total earnings of all the workers plus an additionalamount corresponding to a percentage of the earnings of each individual worker.

EMPLOYERS POWER OF CONTROL. Documentary evidence presented by thepetitioners establish respondent SMC's right to impose disciplinary measures forviolations or infractions of its rules and regulations as well as its right to recommendtransfers and dismissals of the piece workers. The inter-office memoranda submitted inevidence prove the company's control over the petitioners.


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GRANDTEQ INDUSTRIAL STEEL PRODUCTS V. EDNA MARGALLO, G.R. NO.181393 (2009)

FACTS: Grandteq is a domestic corporation engaged in the business of selling weldingelectrodes, alloy steels, aluminum and copper alloys. Gonzales is the President/Owner

of Grandteq. Grandteq employed Margallo as Sales Engineer beginning 3 August 1999.1. Margallo availed herself of the car loan program offered to her by Grandteq as areward for being "Salesman of the Year." She paid the down payment on a brandnew Toyota Corolla. She paid the half of the amortization of the car and the otherhalf was paid by Grandteq.

2. Grandteq sent a letter requiring petitioner to provide her written explanation forallegedly committing: Moonlighting, Sabotage and Breach of trust and confidencefor working with JVM Industrial Supply and Allied Services while being employedwith Grandteq. Responding to the foregoing letter, Margallo contends that shewas only instructed by her superior to deliver the said items.

3. Margallo averred that De Leon asked her to resign, promising that if she did, she

will still be paid her commissions and other benefits as well as be reimbursed hercar loan payment. Relying on De Leons promise, Margallo resigned. Margalloalleged that she was never paid her money claims. After Margallos resignation,Grandteq sold her car to Annaliza Estrella, another employee.

4. Margallo filed a complaint before the Labor Arbiter for recovery of salescommission, cash incentive and car loan payment. Grandteq and Gonzalesinsisted that Margallo had no right to the refund of her car loan payments underthe car loan agreement she executed with Grandteq, which expressly providedthat in the event that Margallo resigned or was terminated for cause during theeffectivity of said agreement, her car loan payments would be forfeited in favor ofGrandteq, and Grandteq would regain possession of the car.

5. Labor Arbiter dismissed all her claims. NLRC reversed the previos decision bygrating Margallo her claims for sales commission, reimbursement of her car loanpayments and attorneys fees. Grandteq elevated the case to the CA. Like theNLRC, Court of Appeals found that Margallo had a right to be reimbursed her carloan payments, and the terms of the car loan agreement between Margallo andGrandteq should not be applied for being highly prejudicial to the employeesinterest.

ISSUE: WON the CA erred in declaring the car loan agreement between Grandteq andMargallo, particularly the provision therein on the forfeiture of car loan payments in favorof Grandteq should Margallo resign from the company, as null and void.

HELD: The provision in the car loan agreement between Grandteq and Margallo whichprovides the forfeiture of the car loan payments in favor of Grandteq should Margalloresign from the company is null and void.

Contracts are respected as the law between the contracting parties. The contractingparties may establish such stipulations, clauses, terms and conditions as they may


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deem convenient, provided they are not contrary to law, morals, good customs, publicorder or public policy.

Said provisions plainly are contrary to the fundamental principles of justice and fairness.It must be remembered that Margallo herself paid for the down payment and her share

in the monthly amortization of the car. The principle that no person may unjustly enrichoneself at the expense of another is the "basic principles to be observed for the rightfulrelationship between human beings and for the stability of the social order. There isunjust enrichment when a person unjustly retains a benefit at the loss of another, orwhen a person retains the money or property of another against the fundamentalprinciples of justice, equity and good conscience.

The principle against unjust enrichment obliges Grandteq and Gonzales to refund toMargallo the car loan payments she had made, since she has not actually acquired thecar. To relieve Grandteq and Gonzales of their obligation to reimburse Margallo would,indeed, be to sanction unjust enrichment in favor of the first two and cause unjust

poverty to the latter.

The Court rigorously disapproves contracts that demonstrate a clear attempt to exploitthe employee and deprive him of the protection sanctioned by both the Constitution andthe Labor Code. The Constitution and the Labor Code mandate the protection of labor.Hence, as a matter of judicial policy, this Court has, in a number of instances, leanedbackwards to protect labor and the working class against the machinations andincursions of their more financially entrenched employers.

Although not strictly a labor contract, the car loan agreement herein involves a benefitextended by the employers, Grandteq and Gonzales, to their employee, Margallo. Itshould benefit, and not unduly burden, Margallo. The Court cannot, in any way, upholda car loan agreement that threatens the employee with the forfeiture of all the car loanpayments he/she had previously made, plus loss of the possession of the car, shouldthe employee wish to resign; otherwise, said agreement can then be used by theemployer as an instrument to either hold said employee hostage to the job or punishhim/her for resigning.


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SAN MIGUEL V. ABALLA, 462 SCRA 392 (2005)

FACTS: Petitioner San Miguel Corporation (SMC) and Sunflower Multi-PurposeCooperative (Sunflower), entered into a one-year Contract of Services commencing onJanuary 1, 1993, to be renewed on a month to month basis until terminated by either

party. The pertinent provisions of the contract are:a. The cooperative agrees and undertakes to perform and/or provide for thecompany, on a non-exclusive basis for a period of one year the followingservices for the Bacolod Shrimp Processing Plant: Messengerial/Janitorial,Shrimp Harvesting/Receiving, Sanitation/Washing/Cold Storage

b. There is no employer-employee relationship between the company andthe cooperative, or the cooperative and any of its members, or thecompany and any members of the cooperative.

1. Pursuant to the contract, Sunflower engaged private respondents to, as they did,render services at SMCs Bacolod Shrimp Processing Plant at Sta. Fe, BacolodCity. The contract was deemed renewed by the parties every month after its and

private respondents continued to perform their tasks until September 11, 1995.2. Private respondents filed a complaint before the NLRC, praying to be declared asregular employees of SMC, with claims for recovery of all benefits and privilegesenjoyed by SMC rank and file employees. Private respondents subsequently filedan Amended Complaint to include illegal dismissal as additional cause of actionfollowing SMCs closure of its Bacolod Shrimp Processing Plant which resulted inthe termination of their services.

3. SMC filed a Motion to implead Sunflower as Third Party Defendant which,granted by Labor. In the meantime, SMC filed before the Regional Office at IloiloCity of the DOLE a Notice of Closure of its aquaculture operations effective oneven date citing serious business losses.

4. Labor Arbiter and NLRC dismissed private respondents complaint for lack ofmerit, finding that third party respondent Sunflower was an independentcontractor.

5. The CA reversed the NLRC decision and accordingly found for privaterespondents. The CA held that there being a finding of labor-only contracting,liability must be shouldered either by SMC or [Sunflower] or shared by both. SMChowever should be held solely liable for [Sunflower] became non-existent withthe closure of the aquaculture business of SMC.

6. SMC insists that private respondents are the employees of Sunflower, anindependent contractor. On the other hand, private respondents assert thatSunflower is a labor-only contractor.

ISSUE: WON Sunflower Multi-Purpose Cooperative is considered an IndependentContractor or a Labor-only Contractor.

HELD: The test to determine the existence of independent contractorship is whetherone claiming to be an independent contractor has contracted to do the workaccording to his own methods and without being subject to the control of theemployer, except only as to the results of the work.


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In legitimate labor contracting, the law creates an employer-employee relationship for alimited purpose, i.e., to ensure that the employees are paid their wages. The principalemployer becomes jointly and severally liable with the job contractor, only for thepayment of the employees wages whenever the contractor fails to pay the same. Otherthan that, the principal employer is not responsible for any claim made by the

employees.

In labor-only contracting, the statute creates an employer-employee relationship for acomprehensive purpose: to prevent a circumvention of labor laws. The contractor isconsidered merely an agent of the principal employer and the latter is responsible to theemployees of the labor-only contractor as if such employees had been directlyemployed by the principal employer.

The Contract of Services between SMC and Sunflower shows that the parties clearlydisavowed the existence of an employer-employee relationship between SMC andprivate respondents. The language of a contract is not, however, determinative of the

parties relationship;rather it is the totality of the facts and surrounding circumstances ofthe case. A party cannot dictate, by the mere expedient of a unilateral declaration in acontract, the character of its business, i.e., whether as labor-only contractor or jobcontractor, it being crucial that its character be measured in terms of and determined bythe criteria set by statute.

Sunflower does not have substantial capitalization or investment in the form of tools,equipment, machineries, work premises and other materials to qualify it as anindependent contractor. The lot, building, machineries and all other working toolsutilized by private respondents in carrying out their tasks were owned and provided bySMC.

And from the job description provided by SMC itself, the work assigned to privaterespondents was directly related to the aquaculture operations of SMC. The nature ofthe work performed by private respondents in shrimp harvesting, receiving and packingformed an integral part of the shrimp processing operations of SMC. As for janitorialand messengerial services, that they are considered directly related to the principalSunflower did not carry on an independent business or undertake the performance of itsservice contract according to its own manner and method, free from the control andsupervision of its principal, SMC, its apparent role having been merely to recruit personsto work for SMC.

Control of the premises in which private respondents worked was by SMC. These tendto disprove the independence of the contractor. Sunflower did not cater to clients otherthan SMC, and with the closure of SMCs Bacolod Shrimp Processing Plant, Sunflowerlikewise ceased to exist.


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FARLEY FULACHE ET AL VS. ABS-CBN G.R. NO 183810 ( 2010)

FACTS: Petitioners worked as driver/cameramen, drivers, cameramen/editors ofrespondent ABS-CBN, filed separate complaints for regularization, unfair labor practiceand several money claims against:

a. They were excluded from the coverage of the CBA as ABS-CBNconsidered them temporary and not regular employees in violation of theLabor Coe

b. Having rendered more than 1 year of service in the company, they shouldbe recognized as regular employees

1. ABS-CBN, on the other hand, contended that:a. The production of programs per se is not necessary or desirable in its

business because it could generate profits by selling airtime to block-timers or through advertising

b. It contracts on a case-to-case basis the services of persons who possessthe necessary talent, skills, training, etc to meet the requirements of its

programs and productions. These contracted persons are called talentsand are considered independent contractors who offer their services tobroadcasting companies

c. Instead of salaries, talents are paid a pre-arranged consideration calledtalent fee taken from the budget of a particular program and subject to10% withholding tax. Talents do not undergo probation. Their services areengaged for a specific program, production or segment thereof. Theircontracts are terminated once the program, production or segment iscompleted

2. LA held that petitioners were regular employees of ABS-CBN and are entitled tothe benefits and privileges of regular employees

3. While the appeal of the regularization case was pending, ABS-CBN dismissedpetitioners for their refusal to sign the contract of employment with servicecontractor Able Services. As such, petitioners filed a complaint for illegaldismissal

4. LA held that petitioners were dismissed due to redundancy which is anauthorized cause under the law

5. NLRC held that petitioners were regular employees and held their dismissalillegal. There was an employer-employee relationship between petitioners and

ABS-CBN based on the following:a. Petitioners were engaged to perform activities usually necessary or

desirable in ABS-CBN trade or businessb. The company exercised control over the petitioners in the performance of

their workc. Petitioners were not paid by the result of their work but on a monthly basis

and were required to do their work in accordance with the companysschedule

ISSUE: WON petitioners are regular employees


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HELD: Respondent alleged that the petitioners were not employees (whose servicestherefore could be terminated through dismissal under the Labor Code); they wereindependent contractors whose services could be terminated at will, subject only to theterms of their contracts. To justify the termination of service, the company citedredundancy as its authorized cause but offered no justificatory supporting evidence. It

merely claimed that it was contracting out the petitioners activities in the exercise of itsmanagement prerogative.

By claiming redundancy as authorized cause for dismissal, it impliedly admitted that thepetitioners were regular employees whose services, by law, can only be terminated forthe just and authorized causes defined under the Labor Code. It similarly forgot that anexercise of management prerogative can be valid only if it is undertaken in good faithand with no intent to defeat or circumvent the rights of its employees under the laws orunder valid agreements.


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DEVELOPMENT BANK OF THE PHILS V. NLRC 233 SCRA 250 (1994)

FACTS: Private respondents were hired as security guards by Confidential Investigatonand Security Corp (CISCOR). In the course of their employment, the privaterespondents were assigned to secure the premises of CISCORs client, DBP which, in

turn, assigned them to secure the Riverside Mills Corp, one of its properties or assets1. Private respondents eventually resigned from CISCOR. Thereafter, they claimedfrom CISCOR the return of their cash bond and payment of their 13 thmonth payand service incentive leave pay

2. For failure of CISCOR to grant their claims, private respondents filed againstCISCOR a complaint for recovery of their cash bond, payment of 13thmonth payand their service incentive leave pay

3. CISCOR alleged that private respondents failed to secure the required clearance,their cash bond deposit, proportionate 13thmonth pay and service incentive leavepay were withheld to answer for liabilities incurred while private respondentswere guarding Riverside Mills Corp

4. CISCOR filed a motion to implead petitioner bank and averred that in view of itscontract with the petitioner whereby, for a certain service fee, CISCOR undertookto guard petitioners premises. Under the Labor Code, both CISCOR andpetitioner are jointly and severally liable to pay the salaries and other statutorybenefits due the private respondents

5. Petitioner posits that it is not the employer of private respondents and shouldthus not be held liable for the latters claims. In addition, it avers that it was notproperly impleaded as it was CISCOR and Medina who filed the motion toimplead petitioner, and not the private respondents, as complainants therein.Petitioner even goes further by countering that, assuming arguendo, it was theindirect employer of private respondents, Article 106 of the Labor Code 4cannotbe applied to the present case as there was no failure on the part of CISCORand Medina, as direct employer, to pay the claims of private respondents, butonly a failure on the part of the latter to present the proper clearance to pave theway for the payment of the claims.

ISSUE: WON petitioner is jointly and severally liable for the payment of the privaterespondents salary

HELD: Nothing in Art 106 indicates that insolvency or unwillingness to pay by thecontractor or direct employer is a prerequisite for the joint and several liability of theprincipal or indirect employer. In fact, the rule is that in job contracting, the principal is

jointly and severally liable with the contractor. The statutory basis for this joint andseveral liability is set forth in Arts 107 and 109 in relation to Art 106 Labor Code. Thereis no doubt that private respondents are entitled to the cash benefits due them. Thepetitioner is also, no doubt, liable to pay such benefits because the law mandates the

joint and several liability of the principal and the contractor for the protection of labor.

In Eagle Security Agency Inc v. NLRC, the SC held that joint and several liability of thecontractor and the principal is mandated by the Labor Code to assure compliance of the


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provisions therein including the statutory minimum wage (Art 99, Labor Code). Thecontractor is made liable by virtue of his status as direct employer. The principal, on theother hand, is made the indirect employer of the contractors employees for purposes ofpaying the employees their wages should the contractor be unable to pay them. This

joint and several liability facilitates, if not guarantees, payment of the workers

performance of any work, task, job or project, thus giving the workers ample protectionas mandated by the 1987 Constitution.


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CARINO V. COMMISSION ON HUMAN RIGHTS 204 SCRA 283 (1991)

FACTS: On September 17, 1990, some 800 school teachers, among them members ofthe Manila Public School Teachers Association (MPSTA) engaged in a series of massconcerted actions to dramatize and highlight their plight resulting from the alleged failure

of the public authorities to act upon grievances that had been brought to the lattersattention.1. Through their representatives, the teachers participating in the mass actions

were served with an order of DECS to return to work in 24 hours or facedismissal and a memorandum directing the DECS officials concerned to initiatedismissal proceedings against those who did not comply and to hire theirreplacements. Despite this, the mass actions continued into the week

2. Among those who took part in the concerted mass actions were the 8 privaterespondents who had agreed to support the non-political demands of MPSTA

3. For failure to heed the return to work order, they were administratively chargedon the basis of the principals report and given 5 days to answer the charges.

They were also preventively suspended for 90 days4. Private respondents submitted sworn statements to CHR to complain that whilethey were participating in peaceful mass actions, they suddenly learned of theirreplacements as teachers, allegedly without notice and consequently for reasonscompletely unknown to them

5. Through the OSG, DECS secretary sought and was granted leave to file amotion to dismiss the case alleging that the complaint does not state any causeof action and that the CHR has no jurisdiction over the case

ISSUE: WON CHR, like a court of justice or even a quasi-judicial agency, has thejurisdiction or adjudicatory powers, over or the power to try and decide or hear anddetermine the case at bar

HELD: The SC held that the CHR has no such power. The most that may beconceded to the Commission in the way of adjudicative power is that it may investigate,i.e., receive evidence and make findings of fact as regards claimed human rightsviolations involving civil and political rights. But fact finding is not adjudication, andcannot be likened to the judicial function of a court of justice, or even a quasi-judicialagency or official. The function of receiving evidence and ascertaining there from thefacts of a controversy is not a judicial function, properly speaking. To be consideredsuch, the faculty of receiving evidence and making factual conclusions in a controversymust be accompanied by the authority of applying the law to those factual conclusionsto the end that the controversy may be decided or determined authoritatively, finally anddefinitively, subject to such appeals or modes of review as may be provided by law.

Having merely the power "to investigate," CHR cannot and should not "try and resolveon the merits" (adjudicate) the matters involved in Striking Teachers More particularly,the Commission has no power to "resolve on the merits" the question of (a) whether ornot the mass concerted actions engaged in by the teachers constitute and areprohibited or otherwise restricted by law; (b) whether or not the act of carrying on and


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taking part in those actions, and the failure of the teachers to discontinue those actions,and return to their classes despite the order to this effect by the Secretary of Education,constitute infractions of relevant rules and regulations warranting administrativedisciplinary sanctions, or are justified by the grievances complained of by them; and (c)what where the particular acts done by each individual teacher and what sanctions, if

any, may properly be imposed for said acts or omissions.

These are matters undoubtedly and clearly within the original jurisdiction of theSecretary of Education, being within the scope of the disciplinary powers granted to himunder the Civil Service Law, and also, within the appellate jurisdiction of the CivilService Commission.


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SAN MIGUEL CORP V. LAYOC 537 SCRA 77 (2007)

FACTS: Respondents were among the supervisory security guards of the Beer Divisionof San Miguel Corp. From the commencement of their employment, the respondentswere required to punch their time cards for purposes of determining the time they would

come in and out of the companys work place. They were also availing the benefits forovertime, holiday and night premium duty through time card punching1. However, in the early 1990s, SMC embarked on a decentralization program

aimed at enabling the separate divisions of SMC to pursue a more efficient andeffective management of their respective operations

2. As a result, the Beer Division implemented a no time card policy wherebySupervisory I and II comprised of the supervising security guards of the BeerDivision no longer required to punch their time cards. Without prior consultationwith the private respondents, the time cards were ordered confiscated and thelatter were no longer allowed to render overtime work

3. In lieu of the overtime pay and premium pay, the personnel of the Beer Division

affected by the no time card policy were given a 10% across the board increaseon their basic pay while the supervisors who were assigned in the night shiftwere given night shift allowance ranging from P2,000 to P2,500

4. Respondents, then, filed a complaint for unfair labor practice, violation of Art 100Labor Code, and violation of the equal protection clause and due process of lawin relation to par 6-8 Art 32 NCC

5. Respondents alleged that SMC maliciously and fraudulently refused payment oftheir overtime, holiday and night premium pay because of the new policy.Moreover, petitioners had no written authority to stop respondents from punchingtheir time cards because the alleged memorandum authorizing such stoppagedid not include supervisory security guards

6. Petitioners maintained that respondents were supervisory security guards whowere exempt from the provisions of the Labor Code on hours of work, weekly restperiods and rest days. Petitioners further asserted that the no time card policywas a valid exercise of management prerogative and that all supervisors in theBeer Division were covered the said policy, which classification was distinct andseparate from the other divisions within SMC

7. LA held in favor respondents and noted that petitioner SMC failed to show goodfaith in the exercise of their management prerogative in altering companypractice because petitioners changed the terms and conditions of employmentfrom hours of work rendered to result only with respect to respondents and notwith other supervisors in other departments. NLRC affirmed the same

ISSUE: WON the circumstances in the present case constitute and exception to therule that supervisory employees are not entitled to overtime pay

HELD: Both petitioners and respondents agree that respondents are supervisingsecurity guards and, thus, managerial employees. The dispute lies on whetherrespondents are entitled to render overtime work and receive overtime pay despite theinstitution of the "no time card policy" because (1) SMC previously allowed them to


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render overtime work and paid them accordingly, and (2) supervising security guards inother SMC divisions are allowed to render overtime work and receive the correspondingovertime pay.

Art 82 Labor Code states that the provisions of the Labor Code on working conditions

and rest periods shall not apply to managerial employees. The other provisions in theTitle include normal hours of work (Art 83), hours worked (Arte 84), meal periods (Art85), night shift differential (Art 86), overtime work (Art 87), under time not offset byovertime (Art 88), emergency overtime work (Art 89), and computation of additionalcompensation (Art 90). It is thus clear that, generally, managerial employees such asrespondents are not entitled to overtime pay for services rendered in excess of eighthours a day. Respondents failed to show that the circumstances of the present caseconstitute an exception to this general rule.

Respondents assert that Art 100 Labor Code prohibits the elimination or diminution ofbenefits. However, contrary to the nature of benefits, petitioners did not freely give the

payment for overtime work to respondents. Petitioners paid respondents overtime payas compensation for services rendered in addition to the regular work hours.Respondents rendered overtime work only when their services were needed after theirregular working hours and only upon the instructions of their superiors. Respondentseven differ as to the amount of overtime pay received on account of the difference in theadditional hours of services rendered.

The "no time card policy" affecting all of the supervisory employees of the Beer Divisionis a valid exercise of management prerogative. The "no time card policy" undoubtedlycaused pecuniary loss to respondents. However, petitioners granted to respondents andother supervisory employees a 10% across-the-board increase in pay and night shiftallowance, in addition to their yearly merit increase in basic salary, to cushion theimpact of the loss. So long as a company's management prerogatives are exercised ingood faith for the advancement of the employer's interest and not for the purpose ofdefeating or circumventing the rights of the employees under special laws or under validagreements, this Court will uphold them.


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OLLENDORF V. ABRAHAMSON 38 PHIL 585 (1918)

FACTS: Plaintiff Ollendorf is engaged in the business of manufacturing ladiesembroidered underwear for export in the Philippines. He imports the material fromwhich is underwear is made and adopts decorative designs which are embroidered

upon it by Filipino needle workers from patterns selected and supplied by him. Most ofthe embroiderers employed by plaintiff are under contract to work for plaintiffexclusively.

1. In 1915, plaintiff and defendant Abrahamson entered into a contract ofemployment. One of the provisions in the same stipulated that the defendant maynot enter or engage himself directly or indirectly, nor permit any other personunder his control to enter or engage in similar or competitive business to that ofOllendorf within the Philippines for 5 years from the execution of the contract

2. While in Ollendorfs establishment, Abrahamson had the opportunity to acquainthimself with the plaintiffs method of business and business connection. But in1916, defendant Abrahamson left Olldendorfs company due to ill health and

went back to the US3. Thereafter, Abrahamson returned to Manila as the manager of the PhilippineUnderwear Company. This corporation does not maintain a factory in thePhilippines but sends material and embroidery designs from New York to its localrepresentative in the Philippines who employs Filipino needle workers toembroider the designs and garments in their homes.

4. The only difference between the plaintiffs business and defendants company isthe method of doing the finishing workthe manufacture of the embroideredmaterial into finished garments. Defendant admits that both firms produce thesame class of goods and that they are exported into the same market. It alsoappears that defendant has employed in his firm some of the same workersemployed by Ollendorf.

5. Plaintiff filed a complaint praying for preliminary injunction to enjoin the defendantfrom engaging in a similar or competitive business to that of the plaintiff. The trialcourt held in favor of the plaintiff

ISSUE: WON defendant Abrahamson violated the non-complete clause of the contracthe entered into with plaintiff Ollfendorf

HELD: The business in which defendant is engaged is not only very similar to that ofplaintiff, but that it is conducted in open competition with that business within themeaning of the contract in question. Defendant himself expressly admitted, on cross-examination, that the firm by which he is now employed puts out the same class offoods as that which plaintiff is engaged in producing. When two concerns operate in thesame field, produce the same class of goods and dispose them in the same market,their businesses are of necessity competitive. Defendant having engaged in thePhilippine Islands in a business directly competitive with that of plaintiff, within five yearsfrom the date of his contract of employment by plaintiff, under the terms of which heexpressly agreed that he would refrain from doing that very thing. As such, his conductconstitutes a breach of that agreement.


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PHARMACIA AND UPJOHN INC (NOW PFIZER PHILS) V. ALBAYDA G.R. NO172724 (2010)

FACTS: Respondent Albayda worked for petitioner Pharmacia as a district salesmanager assigned in the Western Visayas area

1. Respondent received in 1999, a memorandum announcing his reassignment tothe Northern Mindanao sales area. Albayda wrote a letter requesting to remain inhis current assignment as he feared his transfer could me a means toconstructively dismiss him and also he did not want to dislocate his family whowas already based in Bacolod City. His request was denied by the company

2. Albayda requested several times to remain in his current assignment but despitehis request the company denied it. According to Pharmacia, since he had beenperforming well in his current assignment, he could apply his sales expertise inthe Northern Mindanao area which was performing dismally. The companystressed that the transfer was purely a business decision

3. Thereafter, Montilla, VP of Sales and Marketing, met with respondent to discuss

his situation. He was informed that his request to continue his assignment in theVisayas area was denied since there are currently no vacant positions in thearea. He was given an option to either be assigned in Manila or in Cagayan deOro. The company even gave the respondent some time to consider his options

4. Respondent was subsequently served a final notice to work in Manila otherwisehe would be terminated on the basis of being absent without official leave(AWOL). Despite due notice, respondent refused to report to his newassignment. As a result, Pharmacia issued a memorandum informing him of theirdecision to terminate his services

5. Albayda, then, filed a complaint for constructive dismissal. LA dismissed the casefor lack of merit. NLRC affirmed the same

6. Upon appeal, CA reversed the NLRC decision and remanded to case to NLRCfor proper determination of the petitioners claims

ISSUE: WON respondents transfer to a differentsales area constitutes a valid exerciseof management prerogative

HELD: Yes.

Jurisprudence recognizes the exercise of management prerogative to transfer or assignemployees from one office or area of operation to another, provided there is nodemotion in rank or diminution of salary, benefits, and other privileges, and the action isnot motivated by discrimination, made in bad faith, or effected as a form of punishmentor demotion without sufficient cause.

To determine the validity of the transfer of employees, the employer must show that thetransfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does itinvolve a demotion in rank or a diminution of his salaries, privileges and other benefits.Should the employer fail to overcome this burden of proof, the employee's transfer shallbe tantamount to constructive dismissal.


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In the case at bar, Pharmacias transfer of respondent was a valid exercise of alegitimate management prerogative to maximize business opportunities, growth anddevelopment of personnel and that the expertise of respondent was needed to build thecompanys business in Cagayan de Oro City which dismally performed in 1999. Thereassignment of respondent was not a demotion as he will also be assigned as a

District Sales Manager in Mindanao or in Metro Manila and that the notice of his transferdid not indicate that his emoluments will be reduced.

Furthermore, there is no evidence to prove that the restructuring move of respondentcompany was done with ill motives or with malice and bad faith purposely toconstructively terminate respondentsemployment. Such misinterpretation or misguidedsupposition by Albayda is belied by the fact that respondents officers had in severalcommunications officially sent to complainant, expressly recognized complainantsexpertise and capabilities as a top sales man and manager for which reason therespondent company needs his services and skills to energize the low-performing areasin order to maximize business opportunities and to afford complainant an opportunity for

further growth and development. Respondent persistently refused instead of taking thisopportunity as a challenge after all, the nature of employment of a sales man or salesmanager is that it is mobile or ambulant being always seeking for possible areas tomarket goods and services. He totally forgot the terms and conditions in hisemployment contract which stipulated that he may be assigned to any work orworkplace for such period as may be determined by the company and whenever theoperations require such assignment.


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DE LEON V. NLRC 176 SCRA 615 (1989)

FACTS: Petitioner De Leon was employed by private respondent La Tondena at theMaintenance section of its Engineering department in Manila. His work consisted mainlyof painting company building and equipment, and other odd jobs relating to

maintenance. He was paid on a daily basis through petty cash vouchers1. After service of more than 1 year, petitioner requested from respondent companythat he be included in the payroll of regular workers, instead of being paidthrough petty cash vouchers. Private respondents respondents to this requestwas to dismiss petitioner from his employment

2. Petitioner then filed a complaint for illegal dismissal, reinstatement and paymentof back wages

3. Private respondent claimed that petitioner was not a regular employee but only acasual worker hired allegedly only to paint a certain building in the companypremises and that his work as a painter was terminated upon completion of thepainting job

4. LA held in favor of petitioner citing that De Leon was not a merely casualemployee but a regular employee and that his dismissal was prompted by hisrequest to be included in the list of regular employees and to be paid through thepayroll and is as such, an attempt to circumvent the legal obligations of theemployer towards a regular employee

5. NLRC reversed LA decision and held that De Leon was a casual employee andthere was no illegal dismissal. NLRC based its decision on the finding thatrespondent hired petitioner on a causal basis and it was made known to him atthe beginning that he would be so engaged on such and that painting work is notpart of the main business of the company

ISSUE: WON petitioner is a regular or casual employee

HELD: Regular employee

Art 281 Labor Code is clear that an employment is deemed regular when the activitiesperformed by the employee are usually necessary or desirable in the usual business ortrade of the employer. Not considered regular are the so-called "project employment"the completion or termination of which is more or less determinable at the time ofemployment, such as those employed in connection with a particular constructionproject and seasonal employment which by its nature is only desirable for a limitedperiod of time. However, any employee who has rendered at least one year of service,whether continuous or intermittent, is deemed regular with respect to the activity heperformed and while such activity actually exists.

The primary standard, therefore, of determining a regular employment is the reasonableconnection between the particular activity performed by the employee in relation to theusual business or trade of the employer. The test is whether the former is usuallynecessary or desirable in the usual business or trade of the employer. The connectioncan be determined by considering the nature of the work performed and its relation to


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the scheme of the particular business or trade in its entirety. Also, if the employee hasbeen performing the job for at least one year, even if the performance is not continuousor merely intermittent, the law deems the repeated and continuing need for itsperformance as sufficient evidence of the necessity if not indispensability of that activityto the business. Hence, the employment is also considered regular, but only with

respect to such activity and while such activity exists.

In the case at bar, the respondent company, which is engaged in the business ofmanufacture and distillery of wines and liquors, claims that petitioner was contracted ona casual basis specifically to paint a certain company building and that its completionrendered petitioner's employment terminated. This may have been true at thebeginning, and had it been shown that petitioner's activity was exclusively limited topainting that certain building, respondent company's theory of casual employment wouldhave been worthy of consideration.

However, during petitioner's period of employment, the records reveal that the tasks

assigned to him included not only painting of company buildings, equipment and toolsbut also cleaning and oiling machines, even operating a drilling machine, and other oddjobs assigned to him when he had no painting job.

The law demands that the nature and entirety of the activities performed by theemployee be considered. In the case of petitioner, the painting and maintenance workgiven him manifest a treatment consistent with a maintenance man and not just apainter, for if his job was truly only to paint a building there would have been no basisfor giving him other work assignments In between painting activities.

Moreover, it is untenable to argue that the painting and maintenance work of petitionerare not necessary in respondent's business of manufacturing liquors and wines, just asit cannot be said that only those who are directly involved in the process of producingwines and liquors may be considered as necessary employees. Otherwise, there wouldhave been no need for the regular Maintenance Section of respondent company'sEngineering Department, manned by regular employees like Emiliano Tanque Jr.,whom petitioner often worked with.


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DELA CRUZ V. MAERSK FILIPINAS CREWING 551 SCRA 284 (2008)

FACTS: Respondent Elite Shipping A.S. hired petitioner Dela Cruz as third engineer forits vessel through its local agency, Maersk Filipinas Crewing Inc. The contract foremployment was for a period of 9 months, starting April 1999 with a basic salary of

US$1,004 plus other benefits. Petitioner was subsequently deployed to UAE1. In June 1999, the chief engineer of the vessel expressed his dissatisfaction overpetitioners performance. He was then informed of his discharge through a notice

2. Petitioner thereafter filed a complaint for illegal dismissal with money claimsequivalent to the unexpired portion of his contract

3. LA ruled that petitioner was dismissed without just cause and due process as thelogbook entry (which respondents claimed to be the 1stnotice to petitioner) wasvague. It failed to expound on or state the details of petitioners shortcomings orinfractions. As such, petitioner was deprived of a real opportunity to explain hisside. NLRC affirmed the same

4. Petitioner also alleged that he was already a regular employee when his services

were terminated. Respondents, on the other hand, insisted that Dela Cruz wasthen still on probationary status which entitled them to dismiss him in accordancewith the terms of the CBA

ISSUE: WON petitioner is a regular employee

HELD:Contractual employee

As held in Brent School v. Zamora, seafarers are not covered by the term regularemployment defined in Art 280 Labor Code. Instead, they are considered contractualemployees whose rights and obligations are governed primarily POEA StandardEmployment Contract for Filipino Seamen, the Rules and Regulations governingOverseas Employment, and more importantly, by RA 8042 (Migrant Workers andOverseas Filipinos Act) Even the POEA Standard Employment Contract itself mandatesthat in no case shall a contract of employment concerning seamen exceed 12 months.

It is an accepted maritime industry practice that the employment of seafarers is for afixed period only. The Court acknowledges this to be for the mutual interest of both theseafarer and the employer. Seafarers cannot stay for a long and indefinite period of timeat sea as limited access to shore activity during their employment has been shown toadversely affect them. Furthermore, the diversity in nationality, culture and languageamong the crew necessitates the limitation of the period of employment.

While petitioner was a registered member of the Associated Marine Officers andSeamen's Union of the Philippines which had a CBA with respondent Elite Shipping

A.S. providing for a probationary period of employment, the CBA cannot override theprovisions of the POEA Standard Employment Contract. The law is read into, and formspart of, contracts. And provisions in a contract are valid only if they are not contrary tolaw, morals, good customs, public order or public policy.


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In using the terms "probationary" and "permanent" vis-a-vis seafarers, what wasreally meant was "eligible for re-hire

ILLEGAL DISMISSALProcedural due process requires that a seaman must be given a written notice of the

charges against him and afforded a formal investigation where he can defend himselfpersonally or through a representative before he can be dismissed and disembarkedfrom the vessel. The employer is bound to furnish him two notices: (1) the writtencharge and (2) the written notice of dismissal (in case that is the penalty imposed). Thisis in accordance with the POEA Revised Standard Employment Terms and ConditionsGoverning the Employment of Filipino Seafarers on Board Ocean-Going Vessels(POEA Revised Standard Employment Terms and Conditions).

Contrary to respondents' claim, the logbook entries did not substantially comply with thefirst notice, or the written notice of charge(s). It did not state the particular acts oromissions for which petitioner was charged. The statement therein that petitioner had

"not been able to live up to the company's SMS job description for 3

rd

Engineer" andthat he had "been informed that if he [does] not improve his job/working performancewithin [a] short time he will have to be signed off according to CBA Article 1 (7)" wascouched in terms too general for legal comfort.


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Section 93 of the 1992 Manual of Regulations for Private Schools provides that full-timeteachers who have satisfactorily completed their probationary period shall beconsidered regular or permanent. Moreover, for those teaching in the tertiary level, theprobationary period shall not be more than six consecutive regular semesters ofsatisfactory service. The requisites to acquire permanent employment, or security of

tenure, are (1) the teacher is a full-time teacher; (2) the teacher must have renderedthree consecutive years of service; and (3) such service must have been satisfactory.

As previously held, a part-time teacher cannot acquire permanent status. Only whenone has served as a full-time teacher can he acquire permanent or regular status. Thepetitioner was a part-time lecturer before she was appointed as a full-time instructor onprobation. As a part-time lecturer, her employment as such had ended when hercontract expired. Thus, the three semesters she served as part-time lecturer could notbe credited to her in computing the number of years she has served to qualify her forpermanent status.

In the case at bar, completing the probation period does not automatically qualify her tobecome a permanent employee of the university. Petitioner could only qualify tobecome a permanent employee upon fulfilling the reasonable standards for permanentemployment as faculty member. Consistent with academic freedom and constitutionalautonomy, an institution of higher learning has the prerogative to provide standards forits teachers and determine whether these standards have been met. At the end of theprobation period, the decision to re-hire an employee on probation, belongs to theuniversity as the employer alone.

Upon expiration of their contract of employment, academic personnel on probationcannot automatically claim security of tenure and compel their employers to renew theiremployment contracts. In the instant case, petitioner, did not attain permanent statusand was not illegally dismissed. As found by the NLRC, her contract merely expired.


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PANGILINAN ET AL V. GENERAL MILLING CORP G.R. NO 149329 (2004)

FACTS: Respondent General Milling Corp (GMC) is a domestic corporation engaged inthe production and sale of livestock and poultry. It also distributes dressed chicken tovarious restaurants and establishments nationwide. As such, it employs hundreds of

employees, some on regular basis and others on casual basis, as emergency workers:1. Petitioners were hired on different dates as emergency workers under separatetemporary/casual contracts of employment for five months. Most of themworked as dressers and packagers. Upon the expiration of their contracts, theirservices were terminated

2. Petitioners then filed a complaint for illegal dismissal and nonpayment of holidaypay, 13thmonth pay, night-differential pay and service incentive leave pay

3. Petitioners alleged that their work as chicken dressers was necessary anddesirable in the usual business of the respondent. They stressed that based onthe nature of their work, they were regular employees of the respondent. Hence,they could not be dismissed unless for just cause and after due notice

4. LA held in favor of petitioners and declared them as regular employees.5. NLRC reversed the decision, holding that the petitioners who were temporary orcontractual employees of the respondent, were legally terminated upon theexpiration of their respective contracts. Although their work was necessary anddesirable in the usual business of GMC, they cannot be considered as regularemployees since they agreed to a fixed term. CA affirmed the same

ISSUE: WON petitioners were regular employees of the respondent GMC when theiremployment was terminated

HELD: Fixed period employees

A regular employee is one who is engaged to perform activities which are necessaryand desirable in the usual business or trade of the employer as against those which areundertaken for a specific project or are seasonal. There are two separate instanceswhereby it can be determined that an employment is regular: (1) if the particular activityperformed by the employee is necessary or desirable in the usual business or trade ofthe employer; and, (2) if the employee has been performing the job for at least a year.

Art 280 Labor Code does not proscribe or prohibit an employment contract with a fixedperiod. We furthered that it does not necessarily follow that where the duties of theemployee consist of activities usually necessary or desirable in the usual business ofthe employer, the parties are forbidden from agreeing on a period of time for theperformance of such activities. There is thus nothing essentially contradictory between adefinite period of employment and the nature of the employee's duties.

As held in Brent School v. Zamora, stipulations in employment contracts providing forterm employment or fixed period employment are valid when the period were agreedupon knowingly and voluntarily by the parties without force, duress or improperpressure, being brought to bear upon the employee and absent any other


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CASERES V. UNIVERSAL ROBINA SUGAR MILLING CORP 534 SCRA 356 (2007)

FACTS: Respondent Universal Robina Sugar Mililng Corp (Robina) is a corporationengaged in the cane sugar milling business. Petitioners worked for Robina from 1989,and at the start of their employment, they were made to sign a contract of employment

for specific project or undertaking. Petitioners contracts were renewed from time to timeuntil May 1999 when they were informed that their contracts will not be renewed1. Petitioners filed a complaint for illegal dismissal, regularization, nonpayment of

service incentive leave pay, and 13 thmonth pay2. LA dismissed the complaint for not being substantiated with clear and convincing

evidence. NLRC affirmed the same

ISSUE: WON the petitioners are seasonal/project/term employees not regularemployees of respondent

HELD: Seasonal employees

Art 280 Labor Code provides for three kinds of employees: (a) regular employees orthose who have been engaged to perform activities which are usually necessary ordesirable in the usual business or trade of the employer; (b)project employeesor thosewhose employment has been fixed for a specific project or undertaking, the comp letionor termination of which has been determined at the time of the engagement of theemployee or where the work or services to be performed is seasonal in nature and theemployment is for the duration of the season; and (c) casual employeesor those whoare neither regular nor project employees.

The principal test for determining whether an employee is a project employee or aregular employee is whether the employment has been fixed for a specific project orundertaking, the completion or termination of which has been determined at the time ofthe engagement of the employee. A project employee is one whose employment hasbeen fixed for a specific project or undertaking, the completion or termination of whichhas been determined at the time of the engagement of the employee or where the workor service to be performed is seasonal in nature and the employment is for the durationof the season. A true project employee should be assigned to a project which beginsand ends at determined or determinable times, and be informed thereof at the time ofhiring.

As found by LA and NLRC:a. Complainants never bothered to deny that they voluntarily, knowingly and willfully

executed the contracts of employment.b. The very nature of the terms and conditions of complainants' hiring reveals that

they were required to perform phases of special projects for a definite periodafter, their services are available to other farm owners. This is so because theplanting of sugar does not entail a whole year operation, and utility works arecomparatively small during the off-milling season.


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The fact that petitioners were constantly re-hired does not ipso factoestablish that theybecame regular employees. Their respective contracts with respondent show that therewere intervals in their employment. These support the conclusion that they were indeedproject employees, and since their work depended on the availability of such contractsor projects, necessarily the employment of respondents work force was not permanent

but co-terminus with the projects to which they were assigned and from whose payrollsthey were paid. As ruled in Palomares v. NLRC, it would be extremely burdensome fortheir employer to retain them as permanent employees and pay them wages even ifthere were no projects to work on.

Moreover, even if petitioners were repeatedly and successively re-hired, still it did notqualify them as regular employees, as length of service is not the controllingdeterminant of the employment tenure of a project employee, but whether theemployment has been fixed for a specific project or undertaking, its completion hasbeen determined at the time of the engagement of the employee. Furthermore, Art 280states that an employee who has rendered service for at least one (1) year shall be

considered a regular employee, pertains to casual employees and not to projectemployees.


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HACIENDA FATIMA V. NATIONAL FEDERATION OF SUGARCANE WORKERS 396SCRA 518 (2003)

FACTS: Workers of Hacienda Fatima organized themselves into a union. However, theorganization was not favored by the petitioners. Thus, when the union was certified as

the collective bargaining representative in the certification elections, petitioners refusedto sit down with the union for the purpose of entering into a collective bargainingagreement. In protest, complainants staged a strike which was settled upon the signingof a MOA.

1. Another dispute arose between the parties, it was alleged that respondent unionfailed to load 15 wagons, so petitioners reneged on its commitment to sit downand bargain collectively

2. Petitioners prevented the organizers from entering the premises and startingSeptember 1991, did not assign any work forcing the union to stage a strike. Butdue to the conciliation efforts by the DOLE, another MOA was signed by thecomplainants. Among other things, the Agreement aims to resolve the status of

the subject 36 hacienda workers, to determine whether or not the concernedUnion members are hacienda workers or employees3. The parties subsequently met and a list of employees was submitted. Four

people are deemed not considered employees, one employee shall be verified inthe 1990 payroll and 12 employees are to be reinstated immediately uponavailability of work. However, despite of the Agreement, petitioners againreneged on its commitment

4. The complaint of the union was lodged to NLRC and CA. The appellate courtsboth found that the accusation that the workers refused to work and was choosyin the kind of work they have to perform are groundless. Further, CA affirmedthat while the work of respondents was seasonal in nature, they were consideredto be merely on leave during the off-season and were therefore still employed bypetitioners. Moreover, the workers enjoyed security of tenure. Any infringementupon this right was deemed by the CA to be tantamount to illegal dismissal. TheCA likewise concurred with the NLRC's finding that petitioners were guilty ofunfair labor practice.

ISSUE: WON respondents are seasonal or regular employees

HELD: Regular employees

For respondents to be excluded from those classified as regular employees, it is notenough that they perform work or services that are seasonal in nature. They must havealso been employed only for the duration of one season. The evidence proves theexistence of the first, but not of the second, condition. Evidently, petitioners employedrespondents for more than one season. Therefore, the general rule of regularemployment is applicable.

The test of whether or not an employee is a regular employee has been laid down in DeLeon v. NLRC, in which this Court held: "The primary standard, therefore, of


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determining regular employment is the reasonable connection between the particularactivity performed by the employee in relation to the usual trade or business of theemployer.

The test is whether the former is usually necessary or desirable in the usual trade or

business of the employer. The connection can be determined by considering the natureof the work performed and its relation to the scheme of the particular business or tradein its entirety. Also if the employee has been performing the job for at least a year, evenif the performance is not continuous and merely intermittent, the law deems repeatedand continuing need for its performance as sufficient evidence of the necessity if notindispensability of that activity to the business. Hence, the employment is consideredregular, but only with respect to such activity and while such activity exists.

The fact that respondents do not work continuously for one whole year but only for theduration of the season does not detract from considering them in regular employmentsince in a litany of cases this Court has already settled that seasonal workers who are

called to work from time to time and are temporarily laid off during off-season are notseparated from service in said period, but merely considered on leave until re-employed.

Mercado v. NLRC is not applicable to the case at bar. In the earlier case, the workerswere required to perform phases of agricultural work for a definite period of time, afterwhich their services would be available to any other farm owner. They were not hiredregularly and repeatedly for the same phase/s of agricultural work, but on and off forany single phase thereof. On the other hand, herein respondents, having performed thesame tasks for petitioners every season for several years, are considered the latter'sregular employees for their respective tasks. Petitioners' eventual refusal to use theirservices even if they were ready, able and willing to perform their usual dutieswhenever these were available and hiring of other workers to perform the tasksoriginally assigned to respondents amounted to illegal dismissal of the latter.

A-C Management Prerogative (Cham)

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