Labor Assign 1

7/25/2019 Labor Assign 1

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Reyes, Hazel S.

20120649

Labor Law Rev Assignment

1.MATLING INDUSTRIAL AND COMMERCIAL CORP., ET AL V, COROS (GR NO.

157802, OCT. 13, 2010)

Facts

Respondent Coros was dismissed by Petitioners Matling and other corporate officers. Coros thenfiled a illegal dismissal case with in the NLRC, Sub-Regional Arbitration Branch XII, IliganCity. Petitioners moved to dismiss the case, stating that the SEC has jurisdiction over the case.Coros opposed such claiming that: he had not been formally elected as such; that he did not owna single share of stock in Matling, considering that he had been made to sign in blank an undated

indorsement of the certificate of stock he had been given in 1992; that Matling had taken backand retained the certificate of stock in its custody; and that even assuming that he had been aDirector of Matling, he had been removed as the Vice President for Finance and Administration,not as a Director, a fact that the notice of his termination dated April 10, 2000 showed. TheLabor Arbiter dismissed the case. On Appeal, the NLRC set aside the decision of the LA, statingthat such VP position was not listed in the Company's Constitution and By-Laws; hence, Coroswas not a corporate officer. The motion for reconsideration by petitioners was denied. Petitionersfiled a petition for certiorari with the CA, to which the latter dismissed: Coros' position was not acorporate office but an ordinary office.

Issue

Whether the respondent was a corporate officer of Matling or not. The resolution of the issuedetermines whether the LA or the RTC had jurisdiction over his complaint for illegal dismissal.

Held

Coros’ position was an ordinary office, not a corporate office. The Board of Directors of Matlingcould not validly delegate the power to create a corporate office to the President, in light ofSection 25 of the Corporation Code requiring the Board of Directors itself to elect the corporateofficers. Verily, the power to elect the corporate officers was a discretionary power that the lawexclusively vested in the Board of Directors, and could not be delegated to subordinate officers

or agents. The office of Vice President for Finance and Administration created by MatlingsPresident pursuant to By Law No. V was an ordinary, not a corporate, office. LA has jurisdictionover the case. Even though he might have become a stockholder of Matling in 1992, his promotion to the position of Vice President for Finance and Administration in 1987 was byvirtue of the length of quality service he had rendered as an employee of Matling. His subsequentacquisition of the status of Director/stockholder had no relation to his promotion. Besides, hisstatus of Director/stockholder was unaffected by his dismissal from employment as VicePresident for Finance and Administration. The criteria for distinguishing between corporate



officers who may be ousted from office at will, on one hand, and ordinary corporate employeeswho may only be terminated for just cause, on the other hand, do not depend on the nature of theservices performed, but on the manner of creation of the office. In the respondents case, he wassupposedly at once an employee, a stockholder, and a Director of Matling.

2.GENERAL MILLING CORPORATION. V. CA (GR NO. 146728, FEB 11 2004)

Facts

GMC and the General Milling Corporation Independent Labor Union concluded a collective bargaining agreement (CBA) which included the issue of representation effective for a term ofthree years. The CBA was effective for three years retroactive to December 1, 1988. Hence, itwould expire on November 30, 1991. Later on, the Union tried to renew the CBA after it expiredand the Company did not recognize them to be existing due to alleged massive disaffiliation ofmembers with it. GMC dismissed Marcia Tumbiga, a union member, was dismissed on groundsof incompetence. Union requested to have the matter submitted to the grievance procedure in the

CBA, but the Company did not.

Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, ArbitrationDivision, Cebu City. The complaint alleged unfair labor practice on the part of GMC. he laborarbiter dismissed the case with the recommendation that a petition for certification election beheld to determine if the union still enjoyed the support of the workers. The union appealed to the NLRC. NLRC set aside the decision of the LA, stating that the Company abide by the 1991-1993CBA draft that the union proposed, being still the exclusive bargaining agent. But later on, NLRC set aside its decision on GMC’s MR. CA however reversed the decision of the NLRC.

Issue

Whether or not GMC is guilty of unfair labor practice for violating the duty to bargaincollectively and/or interfering with the right of its employees to self-organization,

Whether or not the CA gravely abused its discretion in imposing upon GMC the draft CBA proposed by the union for two years to begin from the expiration of the original CBA.

Held

GMC is guilty on the first issue. It is indisputable that when the union requested for arenegotiation of the economic terms of the CBA on November 29, 1991, it was still the certifiedcollective bargaining agent of the workers, because it was seeking said renegotiation within five(5) years. GMCs failure to make a timely reply to the proposals presented by the union isindicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the unionno longer represented the workers, was mainly dilatory as it turned out to be utterly baseless.



There is no abuse. SC was not inclined to gratify GMC with an extended term of the old CBAafter it resorted to delaying tactics to prevent negotiations. Since it was GMC which violated theduty to bargain collectively, based on Kiok Loy and Divine Word University of Tacloban, it hadlost its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union. As provided by Art 253 of the Labor Code, as amended, the provision

mandates the parties to keep the status quo while they are still in the process of working out theirrespective proposal and counter proposal. However, when one of the parties abuses the grace period by purposely delaying the bargaining process, a departure from the general rule iswarranted.

3.COLEGIO DE SAN JUAN DE LETRAN V. ASSOCIATION OF EMPLOYEES AND

FACULTY OF LETRAN

Facts

On December 1992, Salvador Abtria, then President of respondent union initiated the

renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San Juan deLetran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. Ambas,newly elected union president wanted to continue the renegotiation of the CBA but petitioner,through Fr. Edwin Lao, claimed that the CBA was already prepared for signing by the parties.The parties submitted the disputed CBA to a referendum by the union members, who eventuallyrejected the said CBA. The parties agreed to disregard the unsigned CBA and to start negotiationon a new five-year CBA starting 1994-1999. During the course of the renegotiation, Ambas wasdismissed on the ground of insubordination. Later on, the union held a strike. Public respondentthe Secretary of Labor and Employment assumed jurisdiction and ordered all striking employeesincluding the union president to return to work and for petitioner to accept them back under thesame terms and conditions before the actual strike. Petitioner readmitted the striking members

except Ambas. The parties then submitted their pleadings including their position papers whichwere filed on July 17, 1996. Illegal dismissal case on 2 counts of unfair labor practice was filedagainst the School. The Secretary and the CA, on appeal to it, held in favor of the union. Hencethis petition,

Issue

Whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when itunilaterally suspended the ongoing negotiations for a new CBA upon mere information that a petition for certification has been filed by another legitimate labor organization?

Whether the termination of the union president amounts to an interference of the employees'right to self-organization?

Held:

Yes on both counts. Petitioner's utter lack of interest in bargaining with the union is obvious inits failure to make a timely reply to the proposals presented by the latter and is an indication of bad faith. More than a month after the proposals were submitted by the union, petitioner still had



not made any counter-proposals, in violation of the procedure in Article 250 of the Labor Code,as amended.

The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that shewas dismissed in order to strip the union of a leader who would fight for the right of her co-

workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had been working forthe petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award.Moreover, for the past ten (10) years her working schedule was from Monday to Friday.However, things began to change when she was elected as union president and when she startednegotiating for a new CBA. Thus, it was when she was the union president and during the periodof tense and difficult negotiations when her work schedule was altered from Mondays to Fridaysto Tuesdays to Saturdays. When she did not budge, although her schedule was changed, she wasoutrightly dismissed for alleged insubordination. When management refused to treat the chargeof insubordination as a grievance within the scope of the Grievance Machinery, the action of theCollege in finally dismissing her from the service became arbitrary, capricious and whimsical.

4.A ST. LUKE’S MEDICAL CENTER, INC. V. TORRES

Facts:

Private respondent SLMCEA-AFW brought to the attention of petitioner a letter dated July 4,1990 that the 1987-1990 was about to expire, and manifested in the process that privaterespondent wanted to renew the CBA. This development triggered round-table talks on whichoccasions petitioner proposed, among other items, a maximum across-the-board monthly salaryincrease of P375.00 per employee, to which proposal private respondent demanded a P1,500.00hike or 50% increase based on the latest salary rate of each employee, whichever is higher. Adeadlock on issues, especially that bearing on across-the-board monthly and meal allowances

followed and to pre-empt the impending strike as voted upon by a majority of privaterespondent's membership, petitioner lodged the petition below. The Secretary of Laborimmediately assumed jurisdiction and the parties submitted their respective pleadings. OnJanuary 28, 1991, public respondent Secretary of Labor issued the Order now under challenge.Said Order contained a disposition on both the economic and non-economic issues raised in the petition. One of the rulings in the order is the granting of the retroactive effect to theenforceability of the CBA.

Issue

Whether or not the CBA should be given retroactive effect

Held

The effectivity of the Order of January 28, 1991, must retroact to the date of the expiration ofthe previous CBA, contrary to the position of petitioner. Under the circumstances of the case,Article 253-A cannot be property applied to herein case. Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by theSecretary of Labor pursuant to Article 263 (g) of the Labor Code, such as herein involved, public



respondent is deemed vested with plenary and discretionary powers to determine the effectivitythereof.

4.B. PIER 8 ARRASTRE & STEVEDORING SERVICES, INC. V. ROLDAN-

CONFESSOR

Facts

Petitioner corporation and private respondent labor union entered into a three-year CollectiveBargaining Agreement (CBA) with expiry date on November 27, 1991. During the freedom period, NAFLU questioned the majority status of Private respondent through a petition forcertification election. The election conducted on February 27, 1992 was won by privaterespondent. On March 19 19912, private respondent was certified as the sole and exclusive bargaining agent of petitioner’s rank and file employees.

On June 22, 1992, private respondent’s CBA proposals were received by petitioner. Counter -

proposals were made by petitioner. Negotiations collapsed, and on August 24, 1992, private-respondent filed a notice of strike with the NCMB. The NCMB tried but failed to settle the parties’ controversy. On September 30, 1992, public respondent Secretary of Labor assumed

jurisdiction over the dispute. She resolved the bargaining deadlock between the parties throughan Rrder, dated March 4, 1993. On her order with regard to the effectivity of the CBA, she heldthat the CBA shall be effective from the time she assumed jurisdiction over the dispute, that is,on 22 September 1992, and shall remain effective for five (5) years thereafter. Petitioner sought partial reconsideration of the order. On June 8, 1993, public respondent affirmed her findings,except for the date of effectivity of the Collective Bargaining Agreement which was changed toSeptember 30, 1992. This is the date when she assumed jurisdiction over the deadlock.

Issue

Whether or not the Secretary of Labor committed grave abuse of discretion in making the CBAeffective on September 30, 1992 and not on March 4, 1993 when she rendered judgment over thedispute.

Held

In the case of Lopez Sugar Corporation v. Federation of Free Workers,

(189 SCRA 179), this Court reiterated the rule that although a CBA has expired, it continues to

have legal effects as between the parties until a new CBA has been entered into. It is the duty of both parties to the to keep the status quo (as provided in Art. 253 of the Labor Code, asamended) and to continue in full force and effect the terms and conditions of the existingagreement during the 5-day freedom period and/or until a new agreement is reached by the parties. Applied to the case at bench, the legal effects of the immediate past CBA between petitioner and private respondent terminated, and the effectivity of the new CBA began, only onMarch 4, 1993 when public respondent resolved their dispute.



4.C. MERALCO V. QUISUMBING

Facts

Meralco Employees and Workers Association (MEWA) informed MERALCO of its intention tore-negotiate the terms and conditions of their existing 1992-1997 Collective BargainingAgreement (CBA) covering the remaining period of two years starting from December 1, 1995to November 30, 1997. owever, despite the series of meetings between the negotiating panels ofMERALCO and MEWA, the parties failed to arrive at terms and conditions acceptable to both ofthem. Later MEWA filed a Notice of Strike with the NCMB. The NCMB then conducted a seriesof conciliation meetings but the parties failed to reach an amicable settlement. Later on, theSecretary assumed jurisdiction and made a Return-To-Work Order. The Secretary resolved andawarded to respondents an alleged grossly exhorbitant package and others, and also making theCBA effective not on the time the Secretary resolved such matter, exercising its discretion.

Issue

Whether or not retroactivity of arbitral awards shall commence at such time as granted bySecretary

Held

In general, a CBA negotiated within six months after the expiration of the existing CBA retroactsto the day immediately following such date and if agreed thereafter, the effectivity depends onthe agreement of the parties. On the other hand, the law is silent as to the retroactivity of a CBA

arbitral award or that granted not by virtue of the mutual agreement of the parties but byintervention of the government. In the absence of a CBA, the Secretary’s determination of the

date of retroactivity as part of his discretionary powers over arbitral awards shall control.Consequently, we find no sufficient legal ground on the other justification for the retroactiveapplication of the disputed CBA, and therefore hold that the CBA should be effective for a termof 2 years counted from December 28, 1996 (the date of the Secretary of Labors disputed orderon the parties motion for reconsideration) up to December 27, 1999.

Held 2: (August 1, 2000)

Upon a reconsideration of the Decision, this Court issued the assailed Resolution which ruledthat where an arbitral award granted beyond six months after the expiration of the existing CBA,and there is no agreement between the parties as to the date of effectivity thereof, the arbitralaward shall retroact to the first day after the six-month period following the expiration of the lastday of the CBA.



4.D LMG CHEMICALS CORPORATION V. SECRETARY OF DOLD

Facts

LMG Chemicals Corp, (petitioner) is a domestic corporation engaged in the manufacture andsale of various kinds of chemical substances, including aluminum sulfate which is essential in purifying water, and technical grade sulfuric acid used in thermal power plants. Petitioner hasthree divisions, namely: the Organic Division, Inorganic Division and the Pinamucan BulkCarriers. There are two unions within petitioner’s Inorganic Division. One union represents the

daily paid employees and the other union represents the monthly paid employees. ChemicalWorkers Union, respondent, is a duly registered labor organization acting as the collective bargaining agent of all the daily paid employees of petitioner’s Inorganic Division. Sometime inDecember 1995, the petitioner and the respondent started negotiation for a new CBA as their oldCBA was about to expire. They were able to agree on the political provisions of the new CBA,

but no agreement was reached on the issue of wage increase. The economic issues were not alsosettled. The parties failed to reach an amicable settlement with the NCMB. Secretary of Laborand Employment granted an increase of P140 (higher than the offer of petitioner-company ofP135). Also, as to the effectivity of the new CBA was given at the discretion of the Secretary,absent any agreement between the parties.

Issue

Whether or not the Secretary abused its discretion in setting the effectivity of the arbitral awards

Held

It is well settled in our jurisprudence that the authority of the Secretary of Labor to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industryindispensable to national interest includes and extends to all questions and controversies arisingtherefrom. The power is plenary and discretionary in nature to enable him to effectively andefficiently dispose of the primary dispute. Therefore in the absence of the specific provision oflaw prohibiting retroactivity of the effectivity of the arbitral awards issued by the Secretary of

Labor pursuant to Article 263(g) of the Labor Code, such as herein involved, public respondentis deemed vested with plenary powers to determine the effectivity thereof.

5. NUBE vs. PEMA & PNB

Facts: Respondent Philippine National Bank (PNB) used to be a government-owned andcontrolled banking institution. Its rank-and-file employees, being government personnel, wererepresented for collective negotiation by the Philnabank Employees Association (PEMA), a



public sector union. In 1996, the Securities and Exchange Commission approved PNB’s new

Articles of Incorporation and By-laws and its changed status as a private corporation. PEMAaffiliated with petitioner National Union of Bank Employees (NUBE), which is a laborfederation composed of unions in the banking industry, adopting the name NUBE-PNB Employees Chapter (NUBE-PEC).

NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB rank-and-file employees. A CBA was subsequently signed between NUBE-PEC and PNB coveringthe period of January 1, 1997 to December 31, 2001. Pursuant to Article V on Check-off andAgency Fees of the CBA, PNB shall deduct the monthly membership fee and other assessmentsimposed by the union from the salary of each union member, and agency fee (equivalent to themonthly membership dues) from the salary of the rank- and-file employees within the bargainingunit who are not union members. Moreover, during the effectivity of the CBA, NUBE, being theFederation union, agreed that PNB shall remit P15.00 of the P65.00 union dues per monthcollected by PNB from every employee, and that PNB shall directly credit the amount to NUBE’s current account with PNB. Following the expiration of the CBA, the

Philnabank Employees Association-FFW (PEMA-FFW) filed on January 2, 2002 a petition forcertification election among the rank-and-file employees of PNB. The petition sought theconduct of a certification election to be participated in by PEMA-FFW and NUBE-PEC.

While the petition for certification election was still pending, two significant eventstranspired the independent union registration of NUBE- PEC and its disaffiliation with NUBE.With a legal personality derived only from a charter issued by NUBE, decided to apply for aseparate registration with the (DOLE), then it was registered as an independent labororganization.

Thereafter, the Board of Directors of NUBE-PEC adopted a Resolution disaffiliatingitself from NUBE. It is claimed that said Resolution was ratified by about eighty-one percent(81%) of the total union membership. On June 25, 2003, NUBE-PEC filed a Manifestation andMotion8 before the Med-Arbitration Unit of DOLE, praying that, in view of its independentregistration as a labor union and disaffiliation from NUBE, its name as appearing in the official ballots of the certification election be changed to “Philnabank Employees Association (PEMA)”

or, in the alternative, both parties be allowed to use the name “PEMA” but with PEMA-FFW and NUBE-PEC be denominated as “PEMA-Bustria Group” and “PEMA-Serrana Group,”respectively. On the same date, PEMA sent a letter to the PNB management informing itsdisaffiliation from NUBE and requesting to stop, effective immediately, the check-off of theP15.00 due for NUBE. PNB informed NUBE of PEMA’s letter and its decision to continue the

deduction of the P15.00 fees, but stop its remittance to NUBE effective July 2003. PNB alsonotified NUBE that the amounts collected would be held in a trust account pending theresolution of the issue on PEMA’s disaffiliation. virtualaw library

NUBE replied that: it remains as the exclusive bargaining representative of the PNBrank-and-file employees; by signing the Resolution (on disaffiliation), the chapter officers haveabandoned NUBE-PEC and joined another union; in abandoning NUBE-PEC, the chapterofficers have abdicated their respective positions and resigned as such; in joining another union,the chapter officers committed an act of disloyalty to NUBE-PEC and the general membership;



the circumstances clearly show that there is an emergency in NUBE-PEC necessitating its placement under temporary trusteeship; and that PNB should cease and desist from dealing withSerrana, Roma, Latorre, Garcia, Medrano, and Magtibay, who are expelled from NUBE-PEC. With regard to the issue of non-remittance of the union dues, NUBE enjoined PNB tocomply with the union check-off provision of the CBA; otherwise, it would elevate the matter to

the grievance machinery in accordance with the CBA.

Despite NUBE’s response, PNB stood firm on its decision. NUBE brought the matter to

the (NCMB) for preventive mediation.In time, PNB and NUBE agreed to refer the case to theOff ice of the DOLE Secretary for voluntary arbitration. Meantime, the DOLE denied PEMA’s

motion to change its name in the official ballots. The certification election was finally held,thereafter PEMA filed before the voluntary arbitrator an Urgent Motion for Intervention, allegingthat it stands to be substantially affected by whatever judgment that may be issued, because oneof the issues for resolution is the validity of its disaffiliation from NUBE.

Only NUBE opposed the motion, arguing that PEMA has no legal personality to

intervene, as it is not a party to the existing CBA; and that NUBE is the exclusive bargainingrepresentative of the PNB rank-and-file employees and, in dealing with a union other than NUBE, PNB is violating the duty to bargain collectively, which is another form of ULP. Amonth after, DOLE denied PEMA’s motion for intervention and ordered PNB to release all

union dues withheld and to continue remitting the same to NUBE. It is well settled that [l]aborunions may disaffiliate from their mother federations to form a local or independent union onlyduring the 60-day freedom period immediately preceding the expiration of the CBA. However,such disaffiliation must be effected by a majority of the members in the bargaining unit.

Aggrieved, PEMA filed before the CA a petition under Rule 43 with prayer for theissuance of TRO) or writ of preliminary injunction (WPI) which the CA denied. However,

petitioner again filed an Urgent Motion for the Issuance of a TRO against the Resolution ofDOLE, which ordered PNB to properly issue a check directly payable to the order of NUBEcovering the withheld funds from the trust account. Considering the different factual milieu, theCA resolved to grant the motion. Subsequent to the parties’ submission of memoranda, the CA,declaring the validity of PEMA’s disaffiliation from NUBE and directing PNB to return tothe employees concerned the amounts deducted and held in trust for NUBE starting July 2003and to stop further deductions in favor of NUBE. NUBE filed its MR, but it was denied, hence,this petition.

Issue

Whether there was a valid disaffiliation.

Held

Yes. The right of the local union to exercise the right to disaffiliate from its mother union is wellsettled in this jurisdiction. A local union has the right to disaffiliate from its mother union ordeclare its autonomy. A local union, being a separate and voluntary association, is free to servethe interests of all its members including the freedom to disaffiliate or declare its autonomy from



the federation which it belongs when circumstances warrant, in accordance with theconstitutional guarantee of freedom of association. The purpose of affiliation by a local unionwith a mother union [or]a federation is to increase by collective action the bargaining power in respect of the terms andconditions of labor. Yet the locals remained the basic units of association, free to serve their own

and the common interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon theterms laid down in the agreement which brought it into existence."

Thus, a local union which has affiliated itself with a federation is free to sever suchaffiliation anytime and such disaffiliation cannot be considered disloyalty. In the absence ofspecific provisions in the federation's constitution prohibiting disaffiliation or the declaration ofautonomy of a local union, a local may dissociate with its parent union. In the landmark caseof Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc., we upheld the right oflocal unions to separate from their mother federation on the ground that as separate andvoluntary associations, local unions do not owe their creation and existence to the national

federation to which they are affiliated but, instead, to the will of their members. The sole essenceof affiliation is to increase, by collective action, the common bargaining power of local unionsfor the effective enhancement and protection of their interests. Admittedly, there are times whenwithout succor and support local unions may find it hard, unaided by other support groups, tosecure justice for themselves. Yet the local unions remain the basic units of association, free toserve their own interests subject to the restraints imposed by the constitution and by-laws of thenational federation, and free also to renounce the affiliation upon the terms laid down in theagreement which brought such affiliation into existence.

In the case at bar, there is nothing shown in the records nor is it claimed by NUBE thatPEMA was expressly forbidden to disaffiliate from the federation nor were there any conditionsimposed for a valid breakaway. This being so, PEMA is not precluded to disaffiliate from NUBEafter acquiring the status of an independent labor organization duly registered before the DOLE.Also, there is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid for non-observance of the procedure that union members should make such determination through secret ballot and after due deliberation, conformably with Article 241 (d) of the Labor Code, asamended.38 Conspicuously, other than citing the opinion of a “recognized labor law authority,”

NUBE failed to quote a s pecific provision of the law or rule mandating that a local union’sdisaffiliation from a federation must comply with Article 241 (d) in order to be valid andeffective. Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously bound the two entities was completely severed. As NUBE was divested of any and all power to act in representation of PEMA, any act performed by the former that affects theinterests and affairs of the latter, including the supposed expulsion of Serrana et al., is renderedwithout force and effect.

Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. Themoment that PEMA separated from and left NUBE and exists as an independent labororganization with a certificate of registration, the former is no longer obliged to pay dues andassessments to the latter; naturally, there would be no longer any reason or occasion for PNB tocontinue making deductions. The obligation of an employee to pay union dues is coterminous



with his affiliation or membership. "The employees' check-off authorization, even if declaredirrevocable, is good only as long as they remain members of the union concerned." A contract between an employer and the parent organization as bargaining agent for the employees isterminated bv the disaffiliation of the local of which the employees are members.

On the other hand, it was entirely reasonable for PNB to enter into a CBA with PEMA.Since PEMA had validly separated itself from NUBE, there would be no restrictions which couldvalidly hinder it from collectively bargaining with PNB.

6. HOLY CHILD V STO. TOMAS (2013)

Facts

Petitioner school assails the petition for certification election filed by private respondent Pinag-Isang Tinig at Lakas ng Anakpawis “ Holy Child Catholic School Teachers and EmployeesLabor union (HCCS-TELU-PIGLAS). There are approximately 120 teachers and employees in

the proposed bargaining unit. Petitioner alleges that respondent violates Art. 245 of the LaborCode and lacks the personality to file a petition for certification elections. The case of Toyota iscited by the petitioner and argues that the members of the union are an inappropriate bargainingunit and lacks mutuality of interest, there being a mixture of rank-and-file and managerial orsupervisory employees.

Among the 120 members, some are vice-principals, department heads, coordinators,supervisors, and other non-teaching personnel along with regular teaching staff. Respondentscounter that petitioner failed to substantiate its claim that some of the members are managerial orsupervisory employees. In any case, the qualifications of the member employees may bethreshed out in an inclusion-exclusion proceeding.

Respondents also state that the teaching and non-teaching personnel have similar workingconditions. Med-Arbiter: denied the petition for certification election on the ground that the bargaining unit sought to be represented is inappropriate. SOLE: set aside the ruling of the Med-Arbiter and directed the conduct of two separate certification elections. Recognized thedifference between the teaching and non-teaching personnel but stated that the inappropriatenessof the bargaining unit is not a ground for a petition for certification election.

Cited the case of University of the Philippines v Ferrer-Calleja, where the SC did notorder the dismissal of the petition of the UP Worker ™s Union composed of academic and non-academic personnel. CA: no grave abuse of discretion on the part of the SOLE. Toyotainapplicable since the vice-principals, department heads, coordinators, and supervisors are notmanagerial employees.While the CA agreed with the petitioner that the work of teaching andnon-teaching personnel do not coincide, they nevertheless found that the SOLE appropriatelyordered the conduct of two separate certification elections based on the ruling in UP v Ferrer-Calleja.

Issue



WON mixture of employees in the same bargaining unit renders the labor organization illegal.

Held

NO. SC first invoked the a€ Bystander Role, that certification elections are the sole concern of

the employees. The employer us merely a bystander that lacks the personality to dispute theelection and has no right to interfere therein. As to the mixture of employees in one bargainingunit, there is no provision in the law that renders the union illegal for having such mixture in the bargaining unit it represents. · The Court looked at the past laws that governed this situation. RA No. 875, Section 3 provided: Individuals employed as supervisors shall not be eligible formembership in a labor organization of employees under their supervision but may form separateorganizations of their own. While Sec. 11, Rule II, Book V of the Omnibus Rules provides: œMembers of supervisory unions who do not fall within the definition of managerialemployees shall become eligible to join or assist the rank and file organization.€ • Art. 245 ofthe Labor Code and Sec. 1 of Rule II, Book V of the Rules meanwhile state: Supervisoryemployees shall not be eligible for membership in a labor organization of the rank-and-file

employees but may join, assist or form separate labor organizations of their own. As part of the petition for certification election, RA 6715 required the (c) description of the bargaining unitwhich shall be the employer unit unless circumstances otherwise require; and provided further,that the appropriate bargaining unit of the rank-and-file employees shall not include supervisoryemployees and/or security guards By that provision, any questioned mingling will prevent anotherwise legitimate and duly registered labor organization from exercising its right to file a petition for certification election. · It was under the last provision that Toyota was decided, prohibiting the certification election of a union that had managerial/supervisory and rank-and-fileemployees as the bargaining unit.· However, after Toyota was decided, DO No. 9, s. 1997 wasissued, which deleted the requirement that petition for certification election should indicate thathe bargaining unit of rank-and-file employees has not been mingled with supervisory employees.It provided:

Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oathand shall contain, among others, the following: (c) The description of the bargaining unit. TheSupreme Court ruled in the later case of Tagaytay Highlands that a labor organization has beenregistered, it may exercise all the rights and privileges of a legitimate labor organization. Anymingling between supervisory and rank-and-file employees in its membership cannot affect itslegitimacy for that is not among the grounds for cancellation of its registration, unless suchmingling was brought about by misrepresentation, false statement or fraud under Article 239(now 245) of the Labor Code. The Court abandoned the ruling in Dunlop and Toyota in thatcase. · Moreover, the employer cannot collaterally attack the legitimacy of the union by prayingfor the dismissal of the petition for certification election. · The determination of whether unionmembership comprises managerial and/or supervisory employees is a factual issue that is bestleft for resolution in the inclusion-exclusion proceedings, which has not yet happened in this caseso still premature to pass upon. There is also a difference between the concept of bargainingunit and œunion; the inappropriateness of the bargaining unit does not remove thelegitimacy of the union. · The Labor Code defines œunion as "any union or association of

employees which exists in whole or in part for the purpose of collective bargaining or of dealingwith employers concerning terms and conditions of employment.€ •



Meanwhile, a bargaining unit is a "group of employees of a given employer, comprisedof all or less than all of the entire body of employees, which the collective interests of all theemployees, consistent with equity to the employer, indicated to be best suited to serve reciprocalrights and duties of the parties under the collective bargaining provisions of the law."

7. GOYA, INC. V. GOYA, INC. EMPLOYEES UNION-FFW

Facts

Petitioner Goya Inc. (Goya) hired contractual employees from PESO Resources DevelopmentCorporation (PESO). This prompted Goya, Inc. Employees Union-FFW (Union) to request for agrievance conference on the ground that the contractual workers do not belong to the categoriesof employees stipulated in their CBA. The Union also argued that hiring contractual employeesis contrary to the union security clause embodied in the CBA. When the matter remained

unresolved, the grievance was referred to the NCMB for voluntary arbitration. The Union arguedthat Goya is guilty of ULP for gross violation of the CBA. The voluntary arbitrator dismissed theUnions charge of ULP but Goya was directed to observe and comply with the CBA. While theUnion moved for partial consideration of the VA decision, Goya immediately filed a petition forreview before the Court of Appeals to set aside the VAs directive to observe and comply with theCBA commitment pertaining to the hiring of casual employees. Goya argued that hiringcontractual employees is a valid management prerogative. The Court of Appeals dismissed the petition.

Issue

Whether the act of hiring contractual employees is a valid exercise of management prerogative?

Held:

The petition must fail. The CA did not commit serious error when it sustained the ruling that thehiring of contractual employees from PESO was not in keeping with the intent and spirit of theCBA. In this case, a complete and final adjudication of the dispute between the partiesnecessarily called for the resolution of the related and incidental issue of whether the Companystill violated the CBA but without being guilty of ULP as, needless to state, ULP is committedonly if there is gross violation of the agreement.

8. MZR INDUSTRIES, MARILOU R. QUIROZ AND LEA TIMBAL vs. MAJENCOLAMBOT

Facts

On Feb. 8, 2000, petitioner Marilou Quiroz, Owner and Vice-President for Finance andMarketing of MZR, hired respondent Majen Colambot as messenger. Colambot's duties andresponsibilities included field, messengerial and other liaison work. However, beginning 2002,



Colambot's work performance started to deteriorate. Petitioners issued several memoranda toColambot for habitual tardiness, negligence, and violations of office policies. He was also givenwritten warnings for insubordination committed, for negligence caused by careless handling ofconfidential office documents, for leaving his post without proper turnover and insubordination.

Petitioners claimed that despite written warnings for repeated tardiness andinsubordination, Colambot failed to mend his ways. Hence, in a Memorandum dated October 25,2004 issued by petitioner Lea Timbal (Timbal), MZR's Administrative Manager, Colambot wasgiven a notice of suspension for insubordination and negligence.Again, in a Memorandum dated November 25, 2004, Colambot was suspended from November 26, 2004 until December 6, 2004for insubordination. Allegedly, Colambot disobeyed and left the office despite clear instructionsto stay in the office because there was an important meeting in preparation for a very importantactivity the following day.

Petitioners claimed they waited for Colambot to report back for work on December 7,2004, but they never heard from him anymore. Later, petitioners were surprised to find out that

Colambot had filed a complaint for illegal suspension, underpayment of salaries, overtime pay,holiday pay, rest day, service incentive leave and 13th month pay. On December 16, 2004, thecomplaint was amended to illegal dismissal, illegal suspension, underpayment of salaries,holiday pay, service incentive pay, 13th month pay and separation pay. Colambot narrated thathe worked as a messenger for petitioners since February 2000. That on November 2004, he wasdirected to take care of the processing of a document in Roxas Boulevard, Pasay City. When hearrived at the office around 6 to 7 o'clock in the evening, he looked for petitioner Quiroz to givethe documents. The latter told him to wait for her for a while. When respondent finally had thechance to talk to Quiroz, she allegedly told him that she is dissatisfied already with his work performance. Afterwards, Colambot claimed that he was made to choose between resigning fromthe company or the company will be the one to terminate his services. He said he refused toresign. Colambot alleged that Quiroz made him sign a memorandum for his suspension, from November 26 to December 6, 2004. After affixing his signature, Quiroz told him that effectiveDecember 7, 2004, he is already deemed terminated. Later, on December 2, 2004, respondentwent back to the company to look for Timbal to get his salary. He claimed that Timbal asked himto turn over his company I.D. Petitioners, however, insisted that while Colambot was suspendeddue to insubordination and negligence, they maintained that they never terminatedColambot's employment. They added that Colambot's failure to report for work since December7, 2004 without any approved vacation or sick leave constituted abandonment of his work, butthey never terminated his employment. Petitioners further emphasized that even with Colambot'sfiling of the complaint against them, his employment with MZR has not been terminated.

Colambot, meanwhile, argued that contrary to petitioners’ claim that he abandoned his job, he claimed that he did not report back to work after the expiration of his suspension onDecember 6, 2004, because Quiroz told him that his employment was already terminatedeffective December 7, 2004. On April 28, 2006, the Labor Arbiter rendered a Decision declaringrespondents guilty of ILLEGAL DISMISSAL and hereby ORDERED to reinstate complainant tohis former position with full backwages from date of dismissal until actual reinstatement andmoral and exemplary damages in the sum of P100,000.00 and P50,000.00.



The Labor Arbiter held that there was no abandonment as there was no deliberate intenton the part of Colambot to sever the employer-employee relationship. The Labor Arbiterlikewise noted that Colambot should have been notified to return back to work, which petitionerfailed to do. Aggrieved, petitioners appealed the decision before the NLRC, which wasGRANTED. Setting aside the judgment of the LA.

The NLRC pointed out that Colambot's complaint was unsupported by any evidence andwas not even made under oath, thus, lacking in credibility and probative value. The NLRCfurther believed that Colambot abandoned his work due to his refusal to report for work after hissuspension. The failure of MZR to notify Colambot to return back to work is not tantamount toactual dismissal.

Colambot filed MR but was denied. Thus, via a petition for certiorari under Rule 65raising grave abuse of discretion as a ground, Colambot appealed before the CA. The CA grantedthe petition and reversed the assailed Decision of the NLRC. The Decision of the LA wasordered reinstated with modification that in lieu of reinstatement, petitioners were ordered to pay

respondent separation pay equivalent to one (1) month pay for every year of service in additionto full backwages. The appellate court ruled that Colambot was illegally dismissed based on thegrounds that: (1) MZR failed to prove abandonment on the part of Colambot, and (2) MZR failedto serve Colambot with the required written notices of dismissal. Petitioners appealed, but wasdenied.

Issue

WON The respondent was illegally dismissed and WON the respondent abandoned his work.

Held

No. the employer bears the burden of proving that the termination was for a valid or authorizedcause, in the present case, however, the facts and the evidence do not establish a prima facie casethat the employee was dismissed from employment. Before the employer must bear the burdenof proving that the dismissal was legal, the employee must first establish by substantial evidencethe fact of his dismissal from service. If there is no dismissal, then there can be no question as tothe legality or illegality thereof. A review of the Notice of Suspension dated November 25, 2004shows that respondent was merely suspended from work for 6 days, there was, however, noevidence that Colambot was terminated from work.

In the instant case, other than Colambot's failure to report back to work after suspension, petitioners failed to present any evidence which tend to show his intent to abandon his work. It isa settled rule that mere absence or failure to report for work is not enough to amount toabandonment of work. There must be a concurrence of the intention to abandon and some overtacts from which an employee may be deduced as having no more intention to work.

Mere absence or failure to report for work, even after notice to return, is not tantamountto abandonment. The burden of proof to show that there was unjustified refusal to go back towork rests on the employer. Abandonment is a matter of intention and cannot lightly be



presumed from certain equivocal acts. To constitute abandonment, there must be clear proof ofdeliberate and unjustified intent to sever the employer-employee relationship. Clearly, theoperative act is still the employee’s ultimate act of putting an end to his employment.Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal isinconsistent with abandonment of employment. An employee who takes steps to protest his

dismissal cannot logically be said to have abandoned his work. the filing of such complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment.

9. ALILEM CREDIT COOPERATIVE, INC., now known as ALILEM MULTIPURPOSE

COOPERATIVE, INC.,Petitioner, vs. SALVADOR M. BANDIOLA, JR., Respondent.

Facts

Respondent was employed by petitioner as bookkeeper. Petitioner's Board of Directors (theBoard) received a letter from a certain Napoleon Gao-ay (Napoleon) reporting the allegedimmoral coaduct and unbecoming behavior of respondent by having an illicit relationship with Napoleon’s sister, Thelma G. Palma (Thelma). This prompted the Board to conduct a

preliminary investigation. Respondent, on the other hand, denied the accusation against him. He,instead, claimed that the accusation was a result of the insecurity felt by some members of thecooperative and of the Board because of his growing popularity owing to his exemplary recordas an employee. Thelma executed an affidavit likewise denying the allegations of extra-maritalaffair.

Issue

WON there was illegal dismissal.

Held

It is undisputed that respondent was dismissed from employment for engaging in extramarital

affairs, a ground for termination of employment stated in petitioner’s Personnel Policy. This

basis of termination was made known to respondent as early as the first communication made by

petitioner. In its June 20, 1997 letter, petitioner directed respondent to explain in writing or

personal confrontation why he should not be terminated for violation of Section 4.1.4 of the

Personnel Policy. Respondent merely denied the accusation against him and did not question the

basis of such termination. When the LA was called upon to decide the illegal dismissal case, it

ruled in favor of petitioner and upheld the basis of such dismissal which is the cited Personnel

Policy. To be sure, an employer is free to regulate all aspects of employment. It may make

reasonable rules and regulations for the government of its employees which become part of thecontract of employment provided they are made known to the employee. In the event of a

violation, an employee may be validly terminated from employment on the ground that an

employer cannot rationally be expected to retain the employment of a person whose lack of

morals, respect and loyalty to his employer, regard for his employer’s rules and application of

the dignity and responsibility, has so plainly and completely been bared.



While respondent’s act of engaging in extra--marital affairs may be considered personal to himand does not directly affect the performance of his assigned task as bookkeeper, aside from thefact that the act was specifically provided for by petitioner’s Personnel Policy as one of thegrounds for termination of employment, said act raised concerns to petitioner as the Boardreceived numerous complaints and petitions from the cooperative members themselves asking

for the removal of respondent because of his immoral conduct. In this case, respondent wasadequately afforded the opportunity to defend himself and explain the accusation against him.

10. PICOP Resources Inc vs Taneca

Facts

Respondents were regular rank-and-file employees of PRI and bona fide members

of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file employees of petitionerPRI. PRI has a CBA with NAMAPRI-SPFL. The CBA contained the following union security provisions:

Article II- Union Security and Check-OffSection 6. Maintenance of membership. 6.1 All employees within the appropriate bargaining unit who are members of the UNION at the

time of the signing of this AGREEMENT shall, as a condition of continued employment by the

COMPANY, maintain their membership in the UNION in good standing during the effectivity ofthis AGREEMENT.

6.3 The COMPANY, upon the written request of the UNION and after compliance with therequirements of the New Labor Code, shall give notice of termination of services of anyemployee who shall fail to fulfill the condit ion provided in Section 6.1 and 6.2 of this Ar ticle

Atty. Fuentes sent a letter to the management of PRI demanding the termination of employeeswho allegedly campaigned for, supported and signed the Petition for Certification Election of theFederation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFLconsidered said act of campaigning for and signing the petition for certification election of FFWas an act of disloyalty and a valid basis for termination for a cause in accordance with itsConstitution and By-Laws, and the terms and conditions of the CBA, specifically Article II,Sections 6.1 and 6.2 on Union Security Clause.

On October 16, 2000, PRI served notices of termination for causes to employees whom NAMAPRIL-SPFL sought to be terminated on the ground of “acts of disloyalty” committedagainst it when respondents allegedly supported and signed the Petition for Certification Electionof FFW before the “freedom period” during the effectivity of the CBA. A Notice dated October21, 2000 was also served on the DOLE, Caraga Region. Respondents then accused PRI of ULP.



Issue

WON respondents were validly terminated.

Held

“Union security” is a generic term, which is applied to and comprehends “closed shop,” “union shop,” “maintenance of membership,” or any other form of agreement which imposes uponemployees the obligation to acquire or retain union membership as a condition affectingemployment. There is union shopwhen all new regular employees are required to join the unionwithin a certain period as a condition for their continued employment. There is maintenance ofmembership shop when employees, who are union members as of the effective date of theagreement, or who thereafter become members, must maintain union membership as a conditionfor continued employment until they are promoted or transferred out of the bargaining unit, orthe agreement is terminated. A closed shop may be defined as an enterprise in which, by

agreement between the employer and his employees or their representatives, no person may beemployed in any or certain agreed departments of the enterprise unless he or she is, becomes,and, for the duration of the agreement, remains a member in good standing of a union entirelycomprised of or of which the employees in interest are a part.

However, in terminating the employment of an employee by enforcing the union security clause,the employer needs to determine and prove that: (1) the union security clause is applicable; (2)the union is requesting for the enforcement of the union security provision in the CBA; and (3)there is sufficient evidence to support the decision of the union to expel the employee from theunion. These requisites constitute just cause for terminating an employee based on the unionsecurity provision of the CBA.

As to the first requisite, there is no question that the CBA between PRI and respondents includeda union security clause. Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2)occasions demanded from PRI, in their letters dated May 16 and 23, 2000, to terminate theemployment of respondents due to their acts of disloyalty to the Union. However, as to the thirdrequisite, we find that there is no sufficient evidence to support the decision of PRI to terminatethe employment of the respondents.

The mere signing of the authorization in support of the Petition for Certification Election of FFWon March 19, 20 and 21, or before the “freedom period,” is not sufficient ground to terminate the

employment of respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing in the records would show that respondents failed to maintain their membershipin good standing in the Union. Respondents did not resign or withdraw their membership fromthe Union to which they belong. Respondents continued to pay their union dues and never joinedthe FFW. Petition denied.



11. Erector Advertsing Sign Group, Inc. v. NLRC, G.R. No. 167218, July 2, 2010 G.R. No.

167218 July 2, 2010

Facts

Petitioner Erector Advertising Sign Group, Inc. is a domestic corporation engaged in the business of constructing billboards and advertising signs. Sometime in the middle of 1996, petitioner engaged the services of ExpeditoCloma (Cloma) as company driver and the latter hadserved as such until his dismissal from service in May 2000

In his Complaint filed with the National Labor Relations Commission (NLRC), Cloma allegedthat he was illegally suspended and then dismissed from his employment without due process oflaw. He likewise claimed his unpaid monetary benefits such as overtime pay, premium pay forworked rest days, service incentive leave pay and 13th month pay, as well as moral, exemplaryand actual damages and attorney’s fees. It is conceded by petitioner that Cloma has beensuspended several times from work due to frequent tardiness and absenteeism, but the instantcase appears to be likewise the result of documented instances of absenteeism without prior

notice to and approval from his superior, and of misbehavior. The former happened betweenMay 12 and May 15, 2000 when Cloma supposedly failed to report for work without prior noticeand prior leave approval[6] which thus effectively prevented the other workers from beingtransported to the job site as there was no other driver available; whereas the latter incidenthappened on May 11, 2000 when allegedly, Cloma, without authority, suddenly barged into the premises of the Outright Division and, without being provoked, threatened the employees with bodily harm if they did not stop from doing their work. This second incident was supposedlynarrated fully in a letter dated May 13, 2000 addressed to the personnel manager and signed byone Victor Morales and Ruben Que. The NLRC pointed out that not only was Cloma dismissedwithout due process but also, that he was dismissed without just cause. The NLRC based itsfinding on the termination letter served by petitioner on Cloma such that with respect to the first

ground of termination Hence, this petition,

Issue

Whether Cloma was dismissed with just cause and with due process of law.

Held

We find no merit in the petition. The validity of an employee’s dismissal from service hinges on

the satisfaction of the two substantive requirements for a lawful termination. These are, first,whether the employee was accorded due process the basic components of which are theopportunity to be heard and to defend himself. This is the procedural aspect. And second,whether the dismissal is for any of the causes provided in the Labor Code of the Philippines.This constitutes the substantive aspect. With respect to due process requirement, the employer is bound to furnish the employee concerned with two (2) written notices before termination ofemployment can be legally effected. One is the notice apprising the employee of the particularacts or omissions for which his dismissal is sought and this may loosely be considered as the proper charge. The other is the notice informing the employee of the management’s decision tosever his employment. 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, therebygiving him ample opportunity to be heard and defend himself with the assistance of hisrepresentative should he so desire. The requirement of notice, it has been stressed, is not a meretechnicality but a requirement of due process to which every employee is entitled. In this case,we find that Cloma’s dismissal fr om service did not comply with this basic precept. Finally,

anent the charge that Cloma had terrorized the staff of the Outright Division and incited a workstoppage, it is clear, from the May 17, 2000 suspension order, that he has already been penalizedwith suspension for this offense and, hence, this act may no longer be added to support theimposition of the ultimate penalty of dismissal from service nor may it be used as an independentground to that end. All told, we find that no error has been committed by the Court of Appeals inruling that Cloma’s dismissal from service was both without just cause and without due processof law.

12. MA. ANA M. TAMONTE and EDILBERTO A. TAMONTE versus HONGKONG

and SHANGHAI BANKING CORPORATION LTD., HONGKONG and SHANGHAI

BANKING CORPORATION STAFF RETIREMENT PLAN, represented by ATTY.

MANUEL G. MONTECILLO, STUART P. MILNE and ALEJANDRO CUSTODIO;

ALEJANDRO CUSTODIO; RTC CLERK OF COURT & EX-OFFICIO SHERIFF and

SHERIFF IN CHARGE CLEMENTE BOLOY and BENEDICTO G. HEBRON

Facts

Petitioner Ma. Ana M. Tamonte was a regular employee of the Hongkong and ShanghaiBanking Corporation Ltd. and a member of the Hongkong and Shanghai Banking CorporationStaff Retirement Plan (HSBC SRP). Petitioner Ana applied for a housing loan with the HSBCSRP. To secure the said loan, petitioners and respondent HSBC SRP entered into a real estatemortgage contract, where petitioners mortgaged their property covered by TCT No. 17169 of theRegister of Deeds of Parañaque. The monthly amortizations of the loan were paid by petitioner

Ana through automatic payroll deductions. In January 1993, a labor dispute arose between the bank and the employees' union, where petitioner Ana was a member thereof, which culminatedin a strike staged on December 22, 1993. Majority of the bank employees, which included petitioner Ana, were dismissed from service for abandonment. The union filed an illegaldismissal case n the labor arbiter, where it was dismissed, stating that the strike was illegal. Thecase is now pending in the US court since they file a petition to review.

On November 28, 1994 HSBC SRP sent a letter to petitioner Ana demanding the payment of her unpaid accounts as of November 25, 1994, which included her housingloan. Petitioners failed to settle their obligation; thus, respondent HSBC SRP effected theforeclosure of petitioners' property subject of the real estate mortgage. The foreclosure

proceeding was conducted on May 28, 1996 with Alejandro L. Custodio, one of the hereinrespondents, emerging as the highest bidder. On October 29, 1997, petitioners filed with the RTCof Parañaque, Metro Manila, a Complaint for Annulment of the Entire Proceedings inForeclosure. In response, Respondents HSBC SRP and Custodio filed a Motion to Dismiss, theystated that petitioners had not made any single payment since December 1993 which made themin default under their mortgage contract. Respondent bank filed a Motion to Dismiss, alleging,among others, that no cause of action existed against it, since it was not a party to the mortgagecontract nor did it participate in the foreclosure proceedings sought to be annulled.



Respondent HSBC SRP filed a Supplemental Motion to Dismiss stating that their casewas anchored on the same facts obtaining in the case of Cadena v. HSBC filed in the RTC whichhad already been dismissed by the RTC after finding that the employee concerned had defaultedin the payment of her monthly amortizations which gave rise to the foreclosure of the mortgaged property Petitioners filed their Consolidated Opposition to the Motion to Dismiss, Petitioners did

not deny that no amortization payments were made after December 1993, but claimed that it wasnot the cause of the foreclosure action but petitioner Ana's termination.

In an Order dated January 8, 1998, the RTC dismissed the complaint. The RTC foundthat petitioners did not pay their monthly amortizations after petitioner Ana's termination inDecember 1993 which was a violation of the terms and conditions of their housing loan and thereal estate mortgage contract they executed as security therefor; that when petitioners defaultedin the payment of their monthly amortizations, respondent HSBC SRP had the right to foreclosethe mortgage property pursuant to their mortgage contract. The RTC also ruled that petitioners'obligation to regularly pay their housing loan was purely a civil obligation which arose from acontract which had the force of law between the parties and should be complied with in goodfaith. Petitioners' motion for reconsideration was denied in an Order dated June 1, 1999. In aDecision dated October 12, 2004, the CA dismissed the appeal and affirmed the RTCdecision. Petitioners filed their motion for reconsideration, which the CA denied in a Resolutiondated January 25, 2005.

Issue

Whether or not the Court Of Appeals committed grave error in sustaining the finding that petitioners had no cause of action

Held

Denied. The decision of the court of appeals dated on January 25, 2005 was affirmed.Respondent HSBC SRP and petitioners agreed in their mortgage contract that HSBC SRP asmortgagee was authorized to foreclose the mortgaged property in the event that the petitioners-mortgagors failed to pay the sum of money secured by the mortgage. After petitioners failed to pay upon demand, the civil obligation of the petitioners under the mortgage contract must beenforced to protect HSBC SRP's interest in the housing loan. The dismissal of petitioners'complaint for the annulment of the foreclosure proceedings is, therefore, valid and proper.

13. Varorient Shipping Co., INC. vs Gil A. Flores

Facts

Petitioners employed respondent for the position of Chief Officer on board M/V Aria perContract of Employmentduly approved by the Philippine Overseas Employment Administration(POEA). He was deployed aboard M/V Aria in Bangkok, Thailand. The master of the vessel sentrespondent to the Centre Medical de Ngodi at Doula, Cameroon, where he was treated for three



days due to the shooting pain in the lower extremities, particularly on his right foot. Respondentwas declared not fit to work. The doctor recommended respondentsrepatriation to the Philippinesfor continuing treatment.

In a Certification dated November 7, 1997, Dr. Copernico J. Villaruel, Jr., attending orthopedicsurgeon at the Philippine General Hospital, stated that respondent has been admitted under hiscare from October 9 to 10, 1997 for hemilaminectomy and foraminotomy of L4-L5 and L5-SI,due to the pain in his right foot, and that respondent is now fit to go back to work. In a letter to petitioner Varorient dated July 29, 1997, respondent, through his counsel, stated that due to thegross and evident bad faith of petitioners in refusing to grant him continued medical assistanceuntil he becomes fit to work, as recommended by their company doctors, he was forced to seekmedical treatment at his own expense. Respondent demanded that petitioners should provide himmedical treatment and pay him sickness wages and disability compensation, within five (5) daysfrom receipt of the letter; otherwise, he would be constrained to institute appropriate legal actionagainst them.

Issues

Whether the petitioner, Varorient, is required to pay the respondent’s medical treatment until he

was declared fit to go back to work.

Whether the “quitclaim” was issued with voluntariness.

Held

Respondent should be reimbursed the amount of P13,579.76, representing the balance of thesickness wages due him, the cost of the prescribed medicines he purchased, and the surgicalexpenses he incurred, as evaluated by the CA.

Quitclaims executed by the employees are thus commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the workers legal rights, consideringthe economic disadvantage of the employee and the inevitable pressure upon him by financialnecessity.Thus, it is never enough to assert that the parties have voluntarily entered into such aquitclaim. There are other requisites, to wit:

(a) that there was no fraud or deceit on the part of any of the parties;(b) that the consideration of the quitclaim is credible and reasonable; and(c) that the contract is not contrary to law, public order, public policy, morals or goodcustoms, or prejudicial to a third person with a right recognized by law.

14. Bright Maritime Corporation vs Fantonial

Facts

A Contract of Employment was executed by petitioner Bright Maritime Corporation (BMC), amanning agent and respondent Ricardo B. Fantonial, which contract was verified and approved by the Philippine Overseas Employment Administration (POEA) on January 17, 2000. The



employment contract provided that respondent shall be employed as boatswain of the foreignvessel M/V AUK for one year, with a basic monthly salary of US$450, plus an allowance ofUS$220. Respondent was made to undergo a medical examination at the Christian MedicalClinic, which was petitioner’saccredited medical clinic. Respondent was issued a Medical

Certificate dated January 17, 2000, which certificate had the phrase FIT TO WORK stamped on

its lower and upper portion. On May 16, 2000, respondent filed a complaint against petitionersfor illegal dismissal, payment of salaries for the unexpired portion of the employment contractand for the award of moral, exemplary, and actual damages as well as attorney’s fees before the

Regional Arbitration Branch No. 7 of the NLRC in Cebu City.

Issue

Whether respondent Ricardo B. Fantonial is entitled to back wages provided there was noemployer-employee relationship and moral and exemplary damages.

Held

Petitioners act of preventing respondent from leaving and complying with his contract ofemployment constitutes breach of contract for which petitioner BMC is liable for actual damagesto respondent for the loss of one-year salary as provided in the contract. The monthly salarystipulated in the contract is US$670, inclusive of allowance. An employment contract, like anyother contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2)concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certainwhich is the subject matter of the contract, and (c) cause of the obligation. The object of thecontract was the rendition of service by respondent on board the vessel for which service hewould be paid the salary agreed upon.

The Court upholds the award of moral damages in the amount of P30,000.00, as the Court

of Appeals correctly found petitioners act was tainted with bad faith, considering thatrespondents Medical Certificate stated that he was fit to work on the day of his scheduleddeparture, yet he was not allowed to leave allegedly for medical reasons.

Further, the Court agrees with the Court of Appeals that petitioner BMC is liable to respondentfor exemplary damages, which are imposed by way of example or correction for the public goodin view of petitioners act of preventing respondent from being deployed on the ground that hewas not yet declared fit to work on the date of his departure, despite evidence to the contrary. Inthis case, petitioner should be held liable to respondent for exemplary damages in the amountof P50,000.00.

15. Lirio vs Genovia

Facts

Respondent Wilmer D. Genovia filed a complaint against petitioner Cesar Lirio and/or CelkorAd Sonicmix Recording Studio for illegal dismissal, non-payment of commission and award ofmoral and exemplary damages. In his Position Paper alleged that he was hired as studio manager



by petitioner Lirio, owner of Celkor Ad Sonicmix Recording Studio (Celkor). Petitionerapproached him and told him about his project to produce an album for his 15-year-old daughter,Celine Mei Lirio, a former talent of ABS-CBN Star Records. Petitioner asked respondent tocompose and arrange songs for Celine and promised that he (Lirio) would draft a contract toassure respondent of his compensation for such services. Respondent alleged that before the end

of September 2001, he reminded petitioner about his compensation as composer and arranger ofthe album. Petitioner verbally assured him that he would be duly compensated. On February 26,2002, respondent again reminded petitioner about the contract on his compensationas composerand arranger of the album. On March 14, 2002, petitioner verbally terminated respondentsservices, and he was instructed not to report for work.

In defense, petitioner stated in his Position Paper that respondent was not hiredas studiomanager, composer, technician or as an employee in any other capacity of Celkor.

Issue

Whether there is an employer-employee relationship when the respondent was hired to allegedly

compose and arrange songs for Celkor and to petitioner’s daughter Celine Lirio.

Held

Before a case for illegal dismissal can prosper, it must first be established that an employer-employee relationship existed between petitioner and respondent. The elements to determine theexistence of an employment relationship are: (a) the selection and engagement of the employee;(b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control theemployees conduct. The most important element is the employers control of the employeesconduct, not only as to the result of the work to be done, but also as to the means and methods toaccomplish it.

It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may beadmitted. In this case, the documentary evidence presented by respondent to prove that he was anemployee of petitioner are as follows: (a) a document denominated as "payroll" (dated July 31,2001 to March 15, 2002) certified correct by petitioner, which showed that respondent received amonthly salary of P7,000.00 (P3,500.00 every 15th of the month and another P3,500.00 every30th of the month) with the corresponding deductions due to absences incurred by respondent;and (2) copies of petty cash vouchers, showing the amounts he received and signed for in the payrolls.

16. Nissan Motors Philippines vsVictorino Angelo

Facts

Respondent Victorino Angelo was employed by Nissan as one of its payroll staff. On April 7 to17, 2000, respondent was on sick leave, thus, he was not able to prepare the payroll for the said period. Again, on April 27 and 28, 2000, respondent was on an approved vacation leave which



again resulted in the non-preparation of the payroll for that particular period. As a consequenceof all these, the manufacturing employees, numbering about 350 people or about 65% of[Nissan's total population], since April 16, have started to decline rendering overtime work. Insum, the company has suffered massive loss of opportunity to sell because of failure to producein the production area due to non-availability of workers rendering overtime, high absenteeism

rate among plant direct workers primarily due to the payroll problem.

Issue

Whether the termination of the respondent is one of the authorized just causes of NLRC.

Held

Yes. It must be emphasized at this point that the onus probandi to prove the lawfulness of thedismissal rests with the employer. In termination cases, the burden of proof rests upon theemployer to show that the dismissal is for just and valid cause. Failure to do so would necessarilymean that the dismissal was not justified and, therefore, was illegal.In this case, both the Labor

Arbiter and the NLRC were not amiss in finding that the dismissal of respondent was legal or fora just cause based on substantial evidence presented by petitioner. Substantial evidence, which isthe quantum of proof required in labor cases, is that amount of relevant evidence which areasonable mind might accept as adequate to justify a conclusion.

One of the just causes enumerated in the Labor Code is serious misconduct. Misconduct isimproper 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 notmere error in judgment. Such misconduct, however serious, must nevertheless be in connectionwith the employee's work to constitute just cause for his separation. Thus, for misconduct orimproper behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the

performance of the employees duties; and (c) it must show that the employee has become unfit tocontinue working for the employer.

Another just cause cited by the petitioner is willful disobedience. One of the fundamental dutiesof an employee is to obey all reasonable rules, orders and instructions of theemployer. Disobedience, to be a just cause for termination, must be willful or intentional,willfulness being characterized by a wrongful and perverse mental attitude rendering theemployees act inconsistent with proper subordination. A willful or intentional disobedience ofsuch rule, order or instruction justifies dismissal only where such rule, order or instruction is (1)reasonable and lawful, (2) sufficiently known to the employee, and (3) connected with the dutieswhich the employee has been engaged to discharge. This allegation of willful disobedience can

still be adduced and proven from the same Letter-Explanation cited earlier. However, althoughthe dismissal was legal, respondent is still entitled to a separation pay as a measure of financialassistance, considering his length of service and his poor physical condition which was one ofthe reasons he filed a leave of absence.

17. ST. PAUL COLLEGE QUEZON CITY vs. REMIGIO MICHAEL ANCHETA II and

CYNTHIA ANCHETA



Facts

Respondents Remigio Michael Ancheta II and Cynthia Ancheta were hired in the School Year

(SY) 1996-1997 by the St. Paul College Quezon City as a General Education teacher with

probationary rank and as a part time Mass Communication teacher, respectively. Their

appointments were renewed for SY 1997-1998. On February 13, 1998, the spouses wrote a letterto SPCQC President, Sr. Lilia Tolentino signifying their intention to renew their contract for SY

1998-1999. College Dean Sr. Bernadette responded through two letters dated March 9, 1998

informing the spouses that the school is extending to them new contracts for SY 1998-1999. On

April 30, 1998, however, Sr. Bernadette wrote a letter to Sr. Lilia, endorsing the immediate

termination of the teaching services of the spouses on the following grounds:

1. Non-compliance with the departmental policy to submit their final testquestions to their respective program coordinators for checking/comments(violating par. 7.1, p. 65 of the Faculty Manual).

This policy was formulated to ensure the validity and reliability of test questionsof teachers for the good of the students. This in effect can minimize if not preventunnecessary failure of students.

2. Non-compliance with the standard format (multiple choice) of final testquestions as agreed upon in the department. Mr. Ancheta prepared purely essayquestions for the students.Well-prepared multiple choice questions are more objective, and develop criticalthinking among students.

3. Failure to encode their modular grade reports as required (violating par. H. 8, p.66 of our Faculty manual).

4. Failure to submit and update required modules (syllabi) of their subject despitereminders (violating D, 1.5, p. 40 of our Faculty Manual).

5. Both spouses have a gross number of failure in their class.

The spouses were given an opportunity to comment. Subsequently, they received their

respective letters of termination on May 14, 1998. Their letter for reconsideration was denied.

Their complaint for illegal dismissal was dismissed by the Labor Arbiter on November 20, 2000

and was affirmed by the NLRC on February 28, 2003. The CA however, in a petition forcertiorari, reversed the decision of the Labor Arbiter and the NLRC. Hence, this petition.

Issue

Whether there was illegal dismissal.

Held



Employment on probationary status of teaching personnel is not governed purely by the Labor

Code. The Labor Code is supplemented with respect to the period of probation by special rules

found in the Manual of Regulations for Private Schools.

The common practice is for the employer and the teacher to enter into a contract,

effective for one school year. At the end of the school year, the employer has the option not torenew the contract, particularly considering the teacher's performance. If the contract is not

renewed, the employment relationship terminates. If the contract is renewed, usually for another

school year, the probationary employment continues. Again, at the end of that period, the parties

may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for

another school year would then be the last year since it would be the third school year of

probationary employment. At the end of this third year, the employer may now decide whether to

extend a permanent appointment to the employee, primarily on the basis of the employee having

met the reasonable standards of competence and efficiency set by the employer. For the entire

duration of this three-year period, the teacher remains under probation. Upon the expiration of

his contract of employment, being simply on probation, he cannot automatically claim security

of tenure and compel the employer to renew his employment contract. Section 91 of the Manual

of Regulations for Private Schools, states that: Section 91. Employment Contract. Every contract

of employment shall specify the designation, qualification, salary rate, the period and nature of

service and its date of effectivity, and such other terms and condition of employment as may be

consistent with laws and rules, regulations and standards of the school. A copy of the contract

shall be furnished the personnel concerned .

It is important that the contract of probationary employment specify the period or term of

its effectivity. The failure to stipulate its precise duration could lead to the inference that thecontract is binding for the full three-year probationary period. Therefore, the letters sent by

petitioner Sr. Racadio, which were void of any specifics cannot be considered as contracts. The

closest they can resemble to are that of informal correspondence among the said individuals. As

such, petitioner school has the right not to renew the contracts of the respondents, the old ones

having been expired at the end of their terms.

Assuming, arguendo, that the employment contracts between the petitioner school and

the respondent spouses were renewed, this Court finds that there was a valid and just cause

for their dismissal. The Labor Code commands that before an employer may legally dismiss an

employee from the service, the requirement of substantial and procedural due process must becomplied with. Under the requirement of substantial due process, the grounds for termination of

employment must be based on just or authorized causes.

The plain admissions of the charges against them were the considerations taken into

account by the petitioner school in their decision not to renew the respondent spouses'

employment contracts. This is a right of the school that is mandated by law and jurisprudence. It



is the prerogative of the school to set high standards of efficiency for its teachers since quality

education is a mandate of the Constitution. As long as the standards fixed are reasonable and

not arbitrary, courts are not at liberty to set them aside. Schools cannot be required to adopt

standards which barely satisfy criteria set for government recognition. The same academic

freedom grants the school the autonomy to decide for itself the terms and conditions for

hiring its teacher, subject of course to the overarching limitations under the Labor Code.

The authority to hire is likewise covered and protected by its management prerogative the right

of an employer to regulate all aspects of employment, such as hiring, the freedom to prescribe

work assignments, working methods, process to be followed, regulation regarding transfer of

employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers.

18. SAN MIGUEL FOODS, INC. vs. SAN MIGUEL CORP. SUPERVISORS AND

EXEMPT UNION

Facts

The Court, in G.R. No. 110399 entitled San Miguel Corporation Supervisors and Exempt Union

v. Laguesma, held that supervisory employees 3 and 4 and the exempt employees of San Miguel

Foods, Inc. are not to be considered confidential employees because the confidential data they

handle do not pertain to labor relations, particularly, negotiation and settlement of grievances,

thus they were allowed to form an appropriate bargaining unit for the purpose of collective

bargaining. The Court also declared that the employees belonging to the three different plants of

San Miguel Corporation Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis,

having community or mutuality of interests, constitute a single bargaining unit. They perform

work of the same nature, receive the same wages and compensation, and most importantly, share

a common stake in concerted activities. Pursuant to such ruling, the DOLE-NCR conducted pre-

election conferences. On September 30, 1998, a certification election was conducted. On the

same date, petitioner filed the Omnibus Objections and Challenge to Voters, questioning the

eligibility to vote by some of its employees on the grounds that some employees do not belong to

the bargaining unit which respondent seeks to represent or that there is no existence of employer-

employee relationship with petitioner.

The Med-Arbiter issued an order, based on the results of the certification election, stating

that respondent is certified to be the exclusive bargaining agent of the supervisors and exempt

employees of petitioner's Magnolia Poultry Products Plants in Cabuyao, San Fernando, and Otis.

The DOLE Undersecretary affirmed the said Order with modification excluding four employees

from the bargaining unit. The CA affirmed the decision of the DOLE Undersecretary with

modification excluding those holding the positions of Human Resource Assistant and Personnel

Assistant from the bargaining unit. Hence, this petition.

Issue



Whether the CA departed from jurisprudence when it expanded the scope of the bargaining unit

defined by the ruling in G.R. No. 110399.

Whether the CA departed from jurisprudence on the Court’s definition of a confidential

employee.

Whether the Employer has personality to question a certification election.

Held

a. In G.R. No. 110399, the Court explained that the employees of San Miguel Corporation

Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis constitute a single

bargaining unit, which is not contrary to the one-company, one-union policy. An appropriate

bargaining unit is defined as a group of employees of a given employer, comprised of all or less

than all of the entire body of employees, which the collective interest of all the employees,

consistent with equity to the employer, indicate to be best suited to serve the reciprocal rightsand duties of the parties under the collective bargaining provisions of the law.

There should be only one bargaining unit for the employees in Cabuyao, San Fernando, and Otis

of Magnolia Poultry Products Plant involved in dressed chicken processing and Magnolia

Poultry Farms engaged in live chicken operations. Certain factors, such as specific line of work,

working conditions, location of work, mode of compensation, and other relevant conditions do

not affect or impede their commonality of interest. Although they seem separate and distinct

from each other, the specific tasks of each division are actually interrelated and there exists

mutuality of interests which warrants the formation of a single bargaining unit.

b. Confidential employees are defined as those who (1) assist or act in a confidential capacity, in

regard (2) to persons who formulate, determine, and effectuate management policies in the field

of labor relations. The two criteria are cumulative, and both must be met if an employee is to be

considered a confidential employee - that is, the confidential relationship must exist between the

employee and his supervisor, and the supervisor must handle the prescribed responsibilities

relating to labor relations. The exclusion from bargaining units of employees who, in the normal

course of their duties, become aware of management policies relating to labor relations is a

principal objective sought to be accomplished by the confidential employee rule.

The CA correctly held that the position of Payroll Master does not involve dealing withconfidential labor relations information in the course of the performance of his functions. Since

the nature of his work does not pertain to company rules and regulations and confidential labor

relations, it follows that he cannot be excluded from the subject bargaining unit.



c. It bears stressing that a certification election is the sole concern of the workers; hence, an

employer lacks the personality to dispute the same. The general rule is that an employer has no

standing to question the process of certification election, since this is the sole concern of the

workers. Law and policy demand that employers take a strict, hands-off stance in certification

elections. The bargaining representative of employees should be chosen free from any

extraneous influence of management. A labor bargaining representative, to be effective, must

owe its loyalty to the employees alone and to no other. The only exception is where the employer

itself has to file the petition pursuant to Article 258 of the Labor Code because of a request to

bargain collectively.

19. INSULAR HOTEL EMPLOYEES UNION-NFL vs. WATERFRONT INSULAR

HOTEL DAVAO

Facts

On November 6, 2000, respondent Waterfront Insular Hotel Davao sent the DOLE, Region XI,Davao City, a Notice of Suspension of Operations notifying the same that it will suspend its

operations for a period of six months due to severe and serious business losses. In said notice,

respondent assured the DOLE that if the company could not resume its operations within the six-

month period, the company would pay the affected employees all the benefits legally due to

them.

During the period of the suspension, Domy R. Rojas, the President of Davao Insular

Hotel Free Employees Union (DIHFEU-NFL), the recognized labor organization in Waterfront

Davao, sent respondent a number of letters asking management to reconsider its decision. After

series of negotiations, respondent and DIHFEU-NFL signed a Memorandum of Agreementwherein respondent agreed to re-open the hotel subject to certain concessions offered by

DIHFEU-NFL in its Manifesto. Accordingly, respondent downsized its manpower structure to

100 rank-and-file employees as set forth in the terms of the MOA. Moreover, as agreed upon in

the MOA, a new pay scale was also prepared by respondent. On June 15, 2001, respondent

resumed its business operations. On August 22, 2002, Darius Joves and Debbie Planas, claiming

to be local officers of the National Federation of Labor (NFL), filed a Notice of Mediation before

the National Conciliation and Mediation Board (NCMB), Region XI, Davao City. In said Notice,

it was stated that the Union involved was DARIUS JOVES/DEBBIE PLANAS ET. AL, National

Federation of Labor. The issue raised in said Notice was the Diminution of wages and other

benefits through unlawful Memorandum of Agreement.

The Respondent maintained that the NCMB had no the jurisdiction over the Notice of

Mediation and manifested its intention to withdraw from the proceedings. The Voluntary

Arbitrator, however, ruled in favor of petitioner. The CA ruled in favor of respondent. Hence,

this petition.



Issue

Whether the NCMB has jurisdiction over the Notice of Mediation.

Held

While it is undisputed that a submission agreement was signed by respondent and IHEU-NFL,

then represented by Joves and Cullo, this Court finds that there are two circumstances which

affect its validity: first, the Notice of Mediation was filed by a party who had no authority to do

so; second, that respondent had persistently voiced out its objection questioning the authority of

Joves, Cullo and the individual members of the Union to file the complaint before the NCMB.

Procedurally, the first step to submit a case for mediation is to file a notice of preventive

mediation with the NCMB. It is only after this step that a submission agreement may be entered

into by the parties concerned.

Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of

preventive mediation, to wit:

Who may file a notice or declare a strike or lockout or request preventive

mediation. -

Any certified or duly recognized bargaining representative may file a notice or

declare a strike or request for preventive mediation in cases of bargaining

deadlocks and unfair labor practices. The employer may file a notice or declare a

lockout or request for preventive mediation in the same cases. In the absence of a

certified or duly recognized bargaining representative, any legitimate labor

organization in the establishment may file a notice, request preventive mediation

or declare a strike, but only on grounds of unfair labor practice.

From the foregoing, it is clear that only a certified or duly recognized bargaining agent

may file a notice or request for preventive mediation. It is curious that even Cullo himself

admitted, in a number of pleadings, that the case was filed not by the Union but by individual

members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the notice filed

before it.

20. PHARMACIA and UPJOHN, INC. vs. RICARDO P. ALBAYDA, JR.

Facts

Respondent Ricardo Albayda, Jr. was an employee of Upjohn, Inc. in 1978 and continued

working there until 1996 when a merger between Pharmacia and Upjohn was created. After the

merger, respondent was designated by petitioner Pharmacia and Upjohn as District Sales



Manager assigned to District XI in the Western Visayas area. During the period of his

assignment, respondent settled in Bacolod City. In December 1999, respondent received a

memorandum reassigning him as District Sales Manager to District XII in the Northern

Mindanao area. In several letters, respondent requested that he be reassigned in Western Visayas

area but such was denied. Later on, he was given an option to be assigned in Metro Manila,

however respondent reiterated the concerns he previously raised in his previous letters.

Due to the failure of respondent to report for work, a memorandum, dated June 15, 2000,

was sent to him directing him to report for work within 5 working days from receipt thereof.

Another Memorandum was sent on June 26, 2000. Respondent was warned that the same would

be a final notice for him to report for work in Manila within 5 working days from receipt of the

memo; otherwise, his services will be terminated on the basis of being absent without official

leave (AWOL). On July 13, 2000 another memorandum was sent to respondent notifying him of

their decision to terminate his services after he repeatedly refused to report for work despite due

notice.

The respondent filed a complaint with the NLRC for constructive dismissal. The Labor

Arbiter dismissed the case. On appeal, the NLRC affirmed the decision of the Labor Arbiter.

Motion for reconsideration was likewise denied. In a petition for Certiorari, the CA ruled in

favor of respondent and denied the motion for reconsideration. Hence, this petition.

Issue

Whether there was valid dismissal.

Held

The petition is meritorious.

On petitioners exercise of management prerogative

Jurisprudence recognizes the exercise of management prerogative to transfer or assign

employees from one office or area of operation to another, provided there is no demotion in rank

or diminution of salary, benefits, and other privileges, and the action is not motivated by

discrimination, made in bad faith, or effected as a form of punishment or demotion without

sufficient cause. To determine the validity of the transfer of employees, the employer must show

that the transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it

involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should

the employer fail to overcome this burden of proof, the employee's transfer shall be tantamount

to constructive dismissal. Both the LA and the NLRC ruled that the reassignment of

respondent was a valid exercise of petitioner’s management prerogative. The rule in our

jurisdiction is that findings of fact of the NLRC, affirming those of the LA, are entitled to great



weight and will not be disturbed if they are supported by substantial evidence. Substantial

evidence is an amount of relevant evidence which a reasonable mind might accept as adequate to

justify a conclusion. Based on the foregoing, this Court rules that the CA had overstepped its

legal mandate by reversing the findings of fact of the LA and the NLRC as it appears that both

decisions were based on substantial evidence. There is no proof of arbitrariness or abuse of

discretion in the process by which each body arrived at its own conclusions. Thus, the CA should

have deferred to such specialized agencies which are considered experts in matters within their

jurisdictions.

On the existence of grounds to dismiss respondent from the service

This Court has long stated that the objection to the transfer being grounded solely upon

the personal inconvenience or hardship that will be caused to the employee by reason of the

transfer is not a valid reason to disobey an order of transfer. Such being the case, respondent

cannot adamantly refuse to abide by the order of transfer without exposing himself to the risk of

being dismissed. Hence, his dismissal was for just cause in accordance with Article 282(a) of the

Labor Code.

Lastly, while it is understandable that respondent does not want to relocate his family,

this Court agrees with the NLRC when it observed that such inconvenience is considered an

employment or professional hazard which forms part of the concessions an employee is deemed

to have offered or sacrificed in the view of his acceptance of a position in sales.

On the observance of due process

In termination proceedings of employees, procedural due process consists of the twinrequirements of notice and hearing. The employer must furnish the employee with two written

notices before the termination of employment can be effected: (1) the first apprises the employee

of the particular acts or omissions for which his dismissal is sought; and (2) the second informs

the employee of the employers decision to dismiss him. The requirement of a hearing is

complied with as long as there was an opportunity to be heard, and not necessarily that an actual

hearing was conducted. While no actual hearing was conducted before petitioners dismissed

respondent, the same is not fatal as only an ample opportunity to be heard is what is required in

order to satisfy the requirements of due process. The reassignment of respondent to another

territory was a valid exercise of petitioners management prerogative and, consequently, his

dismissal was for cause and in accordance with the due process requirement of law.

On the payment of separation pay

An employee who is dismissed for cause is generally not entitled to any financial

assistance. Equity considerations, however, provide an exception. Equity has been defined as

justice outside law, being ethical rather than jural and belonging to the sphere of morals than of



law. It is grounded on the precepts of conscience and not on any sanction of positive law, for

equity finds no room for application where there is law.

In the instant case, this Court rules that an award to respondent of separation pay by way

of financial assistance, equivalent to one-half (1/2) months pay for every year of service, is

equitable. Although respondent's actions constituted a valid ground to terminate his services, thesame is to this Court's mind not so reprehensible as to warrant complete disregard of his long

years of service. It also appears that the same is respondent's first offense. While it may be

expected that petitioners will argue that respondent has only been in their service for four years

since the merger of Pharmacia and Upjohn took place in 1996, equity considerations dictate that

respondent's tenure be computed from 1978, the year when respondent started working for

Upjohn.

21. Bank of the Philippines Islands vs Bank of the Philippines Employees Union MetroManila (case cannot be found)

22. Duty Free Philippines Services, Inc. vs. Manolito Tria

Facts

Petitioner Duty Free Philippines Services, Inc. is a manpower agency that provides personnel toDuty Free Philippines(DFP). Manolo Tria was employed by Petitioner and was seconded to DFPas a Warehouse Supervisor. In an Audit Report it was found out that there were glaring

discrepancies in the documents of its products which indicate a malicious attempt to conceal ananomalous irregularity. It was found to have been fabricated and all signatories therein, namely,Ed Garcia, Stockkeeper; Catherino A. Bero, DIU Supervisor; and Constantino L. Cruz, wereheld accountable for the irregular loss of the unaccounted Marlboro KS Pack of 5.

Garcia disclosed that it was respondent Manolito Tria who ordered him to look for a van for thesupposed direct condemnation of the subject merchandise. Respondent denied his participationin the illegal transaction. DFP Discipline Committee issued a Joint Resolution holdingrespondent GUILTY OF DISHONESTY for (his) direct participation in the fake condemnation

and pilferage of the missing 1,020 Marlboro Pack of 5s cigarettes and orders (his) DISMISSAL

from the service. Petitioner sent respondent a memorandum terminating his employment with

Petitioner. Respondent filed a Complaint against Petitioner for Illegal Dismissal and for paymentof backwages, attorneys fees and damages. Labor Arbiter rendered a Decision finding respondentto have been illegally dismissed from employment. NLRC affirmed the LA decision. When petitioner elevated the case to the CA, it denied for the first time the existence of employer-employee relationship and pointed to DFP as respondents real employer. The appellate court,however, considered said defense barred by estoppel for its failure to raise the defense before theLA and the NLRC. Petitioner elevates the case before the Court in this petition for reviewon certiorari.



Issue

WON the absence of employer - employee relationship cannot be raised for the first time onappeal and is barred by estoppel.

Held

Yes. It is a matter of law that when a party adopts a particular theory and the case is tried anddecided upon that theory in the court below, he will not be permitted to change his theory onappeal. The case will be reviewed and decided on that theory and not approached and resolvedfrom a different point of view.

The review of labor cases is confined to questions of jurisdiction or grave abuse ofdiscretion. The alleged absence of employer-employee relationship cannot be raised for the firsttime on appeal. The resolution of this issue requires the admission and calibration of evidenceand the LA and the NLRC did not pass upon it in their decisions. We cannot permit petitioner tochange its theory on appeal. It would be unfair to the adverse party who would have no more

opportunity to present further evidence, material to the new theory, which it could have done hadit been aware earlier of the new theory before the LA and the NLRC. More so in this case as thesupposed employer of respondent which is DFP was not and is not a party to the present case.

In this case, petitioner insisted that respondent was dismissed from employment for cause andafter the observance of the proper procedure for termination. Consequently, petitioner cannotnow deny that respondent is its employee. While indeed, jurisdiction cannot be conferred by actsor omission of the parties, petitioners belated denial that it is the employer of respondent isobviously an afterthought, a devise to defeat the law and evade its obligations. We agree with theappellate court that DFPDCs conclusions are not supported by clear and convincing evidence towarrant the dismissal of respondent. In case of doubt, such cases should be resolved in favor of

labor, pursuant to the social justice policy of labor laws and the Constitution.

The petition is DENIED for lack of merit. The Court of Appeals Decision is AFFIRMED.

23. ESTATE OF NELSON R. DULAY, represented by his wife MERRIDY JANE P.

DULAY vs. ABOITIZ JEBSEN MARITIME, INC. and GENERAL CHARTERERS, INC.

Facts

Nelson R. Dulay was employed by respondent General Charterers Inc. (GCI), a subsidiary ofAboitiz Jebsen Maritime Inc. since 1986. On August 13, 2000, or 25 days after the completion ofhis employment contract, Nelson died due to acute renal failure secondary to septicemia. At thetime of his death, Nelson was a bona fide member of the Associated Marine Officers andSeaman’s Union of the Philippines (AMOSUP), GCI’s collective bargaining agent. Nelson’swidow, Merridy Jane, thereafter claimed for death benefits through the grievance procedure ofthe Collective Bargaining Agreement (CBA) between AMOSUP and GCI. However, on January



29, 2001, the grievance procedure was "declared deadlocked" as petitioners refused to grant the benefits sought by the widow.

Merridy Jane filed a complaint with the NLRC Sub-Regional Arbitration Board against GCI fordeath and medical benefits and damages. Joven Mar, Nelson’s brother, received P20,000.00 fromrespondents pursuant to the CBA and signed a "Certification" acknowledging receipt of theamount and releasing AMOSUP from further liability. Merridy Jane contended that she isentitled to the aggregate sum $90,000. Merridy Jane averred that the P20,000.00 already received by Joven Mar should be considered advance payment of the total claim of US$90,000.Respondents, on the other hand, asserted that the NLRC had no jurisdiction over the action onaccount of the absence of employer-employee relationship between GCI and Nelson at the timeof the latter’s death.

The Labor Arbiter ruled in favor of private respondent. It ordered the petitioner to pay P4,621,300.00, the equivalent of US$90,000.00 less P20,000.00. NLRC affirmed. Appeal tothe CA. The CA ruled that while the suit filed by Merridy Jane is a money claim, the same basically involves the interpretation and application of the provisions in the subject CBA. As

such, jurisdiction belongs to the voluntary arbitrator and not the labor arbiter. Petitioner contendsthat Section 10 of R.A. 8042 vests jurisdiction on the appropriate branches of the NLRC toentertain disputes regarding the interpretation of a collective bargaining agreement involvingmigrant or overseas Filipino workers. Petitioner argues that the abovementioned Sectionamended Article 217 (c) of the Labor Code which, in turn, confers jurisdiction upon voluntaryarbitrators over interpretation or implementation of collective bargaining agreements andinterpretation or enforcement of company personnel policies. Hence, the instant petition.

Issue

Whether or not the CA committed error in ruling that the Labor Arbiter has no jurisdiction over

the case.

Held

The petition is without merit. It is true that R.A. 8042 is a special law governing overseasFilipino workers. However, a careful reading of this special law would readily show that there isno specific provision thereunder which provides for jurisdiction over disputes or unresolvedgrievances regarding the interpretation or implementation of a CBA. Section 10 of R.A. 8042,which is cited by petitioner, simply speaks, in general, of "claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseasdeployment including claims for actual, moral, exemplary and other forms of damages."

On the other hand, Articles 217(c) and 261 of the Labor Code are very specific in stating thatvoluntary arbitrators have jurisdiction over cases arising from the interpretation orimplementation of collective bargaining agreements. Stated differently, the instant case involvesa situation where the special statute (R.A. 8042) refers to a subject in general, which the generalstatute (Labor Code) treats in particular .5 In the present case, the basic issue raised by MerridyJane in her complaint filed with the NLRC is: which provision of the subject CBA appliesinsofar as death benefits due to the heirs of Nelson are concerned. The Court agrees with the CA

http://lawphil.net/judjuris/juri2012/jun2012/gr_172642_2012.html#fnt5






in holding that this issue clearly involves the interpretation or implementation of the said CBA.Thus, the specific or special provisions of the Labor Code govern.

In any case, the Court agrees with petitioner's contention that the CBA is the law or contract between the parties. Article 13.1 of the CBA entered into by and between respondent GCI andAMOSUP, the union to which petitioner belongs, provides as follows:

The Company and the Union agree that in case of dispute or conflict in the interpretation orapplication of any of the provisions of this Agreement, or enforcement of Company policies, thesame shall be settled through negotiation, conciliation or voluntary arbitration. It is only in theabsence of a collective bargaining agreement that parties may opt to submit the dispute to eitherthe NLRC or to voluntary arbitration.

24. HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA vs.

HOSPITAL MANAGEMENT SERVICES, INC. - MEDICAL CENTER MANILA

EMPLOYEES ASSOCIATION-AFW and EDNA R. DE CASTRO

Facts

Respondent De Castro started working as a staff nurse at petitioner hospital since September 28,1990, until she was dismissed on July 20, 1999. While respondent De Castro and ward-clerkorientee Gina Guillergan were at the nurse station on night, one Rufina Causaren, an 81-year-old patient of petitioner hospital for "gangrenous wound on her right anterior leg and right forefoot"scheduled for operation fell from the right side of the bed as she was trying to reach for the bedpan. Instead of personally seeing the patient, respondent De Castro directed ward-clerkorientee Guillergan to check the patient. The vital signs of the patient were normal. Later, the

physician on duty and the nursing staff on duty for the next shift again attended to patientCausaren.

Chief Nurse Josefina M. Villanueva informed Dr. Asuncion Abaya-Morido, president andhospital director, about the incident and requested for a formal investigation. The legal counselof petitioner hospital directed respondent De Castro and three other nurses on duty, Staff NurseJanith V. Paderes and Nursing Assistants Marilou Respicio and Bertilla T. Tatad, to appear before the Investigation Committee. The committee recommended that despite her more thanseven years of service, respondent De Castro should be terminated from employment for herlapse in responding to the incident and for trying to manipulate and influence her staff to cover-up the incident.

HRD Officer of petitioner hospital, issued a notice of termination for alleged violation ofcompany rules and regulations, particularly:(1) negligence to follow company policy on what todo with patient Rufina Causaren who fell from a hospital bed; (2) failure to record and refer theincident to the physician-[on- duty and allowing a significant lapse of time before reporting theincident; (3) deliberately instructing the staff to follow her version of the incident in order tocover up the lapse; and (4) negligence and carelessness in carrying out her duty as staff nurse-on-duty when the incident happened. Respondent De Castro, with the assistance of respondent



Hospital Management Services Inc.-Medical Center Manila Employees Association-AFW, fileda Complaint7 for illegal dismissal against petitioners with prayer for reinstatement and paymentof full backwages without loss of seniority rights, P20,000.00 moral damages, P10,000.00exemplary damages, and 10% of the total monetary award as attorney's fees.

Labor Arbiter rendered a Decision,8 ordering petitioner hospital to reinstate respondent DeCastro to her former position or by payroll reinstatement, at the option of the former, withoutloss of seniority rights, but without backwages. NLRC reversed the findings of the LaborArbiter. It observed that respondent De Castro lacked diligence and prudence in carrying out herduty when, instead of personally checking on the condition of patient Causaren after she fellfrom the bed, she merely sent ward-clerk orientee Guillergan to do the same in her behalf and forinfluencing her staff to conceal the incident. CA reversed and set aside the Decision of the NLRC and reinstated the Decision of the Labor Arbiter. CA ruled that while respondent DeCastro's failure to personally attend to patient Causeran amounted to misconduct, however, beingher first offense, such misconduct could not be categorized as serious or grave that wouldwarrant the extreme penalty of termination. Hence, this present petition.

Issue

WON deliberate refusal to attend to patient Causaren after the latter fell from the bed justifiesrespondent De Castro's termination from employment due to serious misconduct.

Held

No. Article 282 (b) of the Labor Code provides that an employer may terminate an employmentfor gross and habitual neglect by the employee of his duties.

Neglect of duty, to be a ground for dismissal, must be both gross and habitual.1âwphi1 Gross

negligence connotes want of care in the performance of one's duties. Habitual neglect impliesrepeated failure to perform one's duties for a period of time, depending upon the circumstances.A single or isolated act of negligence does not constitute a just cause for the dismissal of theemployee. Despite our finding of culpability against respondent De Castro; however, we do notsee any wrongful intent, deliberate refusal, or bad faith on her part when, instead of personallyattending to patient Causaren, she requested Nursing Assistant Tatad and ward-clerk orienteeGuillergan to see the patient, as she was then attending to a newly-admitted patient at Room 710.It was her judgment call, albeit an error of judgment, being the staff nurse with presumably morework experience and better learning curve, to send Nursing Assistant Tatad and ward-clerkorientee Guillergan to check on the health condition of the patient, as she deemed it best, underthe given situation, to attend to a newly-admitted patient who had more concerns that needed to

be addressed accordingly. Being her first offense, respondent De Castro cannot be said to begrossly negligent so as to justify her termination of employment.

The Court emphasizes that the nature of the business of a hospital requires a higher degree ofcaution and exacting standard of diligence in patient management and health care as what isinvolved are lives of patients who seek urgent medical assistance. However, in some cases, theCourt had ruled that sanctioning an erring employee with suspension would suffice as theextreme penalty of dismissal would be too harsh.13 Considering that this was the first offense of

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respondent De Castro in her nine (9) years of employment with petitioner hospital as a staffnurse without any previous derogatory record and, further, as her lapse was not characterized byany wrongful motive or deceitful conduct, the Court deems it appropriate that, instead of theharsh penalty of dismissal, she would be suspended for a period of six (6) months without pay,inclusive of the suspension for a period of 14 days which she had earlier served. Thereafter,

petitioner hospital should reinstate respondent Edna R. De Castro to her former position withoutloss of seniority rights, full backwages, inclusive of allowances and other benefits, or theirmonetary equivalent, computed from the expiration of her suspension of six (6) months up to thetime of actual reinstatement.

25. SARGASSO CONSTRUCTION and DEVELOPMENT CORPORATION vs.

NATIONAL LABOR RELATIONS COMMISSION (4th Division) and GORGONIO

MONGCAL

Facts

Respondent Mongcal alleged that on May 7, 1993, he was employed as a payloader operator bythe respondent company. That on June 29, 1995, a dump truck driver of the respondent companyfor truck No. 25, requested respondent to load his dump truck with construction materials at thecrusher site. He willingly obliged to do his job; that it was later on discovered that said AldrinRasote had diverted the delivery of said materials loaded to another person; that as a result of thisincident, complainant was dismissed from his job effective 30 June 1995. Respondent denieshaving a hand nor was he involved in the act committed by truck driver Aldrin Rasote.

Mongcal alleged that his dismissal from work was effected without any valid ground and

violative of the rules on due process; that he was not informed of the reasons for his terminationfrom the service nor was he given an opportunity to explain his side, and hence, he was deprived

of his means of livelihood without due process of law. Hence, he prays for reinstatement,

backwages, and separation pay if reinstatement is no longer feasible.

The Labor Arbiter ruled in favor of petitioner by dismissing the complaint but ordered petitioner

to pay herein private respondent P1,000.00 for failure to observe due process requirements of

law. On appeal, the NLRC overturned the Labor Arbiter's ruling ordering Sargasso Construction

and Development Corporation to pay Gorgonio Mongcal separation pay and backwages. CA

affirmed NLRC with modification: the separation pay should be computed from the date of

private respondent's employment until the finality of this decision while his backwages should becomputed from the time of his alleged dismissal up to the finality of this decision, and in both

cases, using his monthly salary of P3,380.00 as basis of computation

Issue



Whether the Honorable Court Of Appeals committed grave error in sustaining the award of

separation pay and backwages to private respondent.

Held

No. Under Article 279 of the Labor Code, an illegally dismissed employee "shall be entitled toreinstatement without loss of seniority rights and other privileges and to his full backwages,

inclusive of allowances, and to his other benefits or their monetary equivalent computed from the

time his compensation was withheld from him up to the time of his actual reinstatement." In

addition to full backwages, the Court has also repeatedly ruled that in cases where reinstatement

is no longer feasible due to strained relations, then separation pay may be awarded instead of

reinstatement.10 In Mt. Carmel College v. Resuena ,11 the Court reiterated that the separation pay,

as an alternative to reinstatement, should be equivalent to one (1) month salary for every year of

service.12

The Decision and Resolution of the Court of Appeals are affirmed. Petitioner is ordered to pay

respondent Gorgonio Mongcal (a) separation pay in the amount equivalent to one (1) month pay

for every year of service; and (b) backwages, computed from the time compensation of

respondent Mongcal was withheld from him when he was unjustly terminated, up to the time of

payment thereof. For this purpose, the records of this case are hereby REMANDED to the Labor

Arbiter for proper computation of said awards. Costs against petitioner.

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Labor Assign 1

Documents

Transcript of Labor Assign 1